Archive for ND&S Updates

Searching For Income

April 21, 2014 


With short-term yields and money markets yielding practically nothing, most investors find themselves looking for ways to increase their current returns. One way, of course, is to look to higher yielding common stocks; it is possible to find dividends ranging from 2 ½-4%. The caveat here is to not rely heavily on higher yielding stocks to the exclusion of more growth-oriented stocks.

Within the fixed income portion, preferred stocks offer yields in the 6-7% area. Well managed bond funds that are sensitive to the rate environment should also work out well. Typically you might find yields of 4½-5% available on these funds. High yield bond funds also add diversification and hold up better than expected when rates go up. Also desirable are emerging market bond funds and Real Estate Investment Trusts.

In sum you should not be discouraged by the low short-term rates you see at the banks and brokers. It is feasible to construct an income-oriented portion of your portfolio with a substantial current return.

“In youth we learn; in age we understand.”
-Marie von Ebner-Eschenbach

Spring Thaw

April 14, 2014 


Last week stocks sold off as investors continued to take profits in biotech and technology shares. The DJIA was down 2.6% for the week and the tech heavy Nasdaq was down 3.2% for the week and 8.2% from its peak March 5.

This week earnings’ reports for the first quarter begin in earnest with reports from Bank of America, Citigroup, Intel, Google, and GE. Earnings overall for the quarter are expected to be 1.2% lower than last year’s quarter due, at least partly, to the bad winter weather.

This morning some good news as U.S. retail sales rose a strong 1.1% in March. This was the largest increase in sales since Sept. 2012. Gains were widespread and particularly strong were auto sales which were up 3.1%. In another bit of good news February sales were revised to a gain of 0.7% up from 0.3%. Consumers seem to like the warmer weather.

“Change your thoughts and you change your world.”
-Norman Vincent Peale

Three Yards and a Cloud of Dust …

April 8, 2014 


The markets mostly produced a grinding ~0.5% advance last week, although the Nasdaq fell by -0.7%. Early-week advances were reversed by mixed action on Thursday, but then Friday produced steady declines throughout the day. This was in reaction to retreats by former bellwether sectors [biotech, medtech and IT tech] and uninspiring payroll data.

The Friday jobs report painted a mixed picture of the economy. Unemployment claims continue to suggest ongoing monthly payroll growth of ~200,000. The private sector is producing most of this growth [up 192,000] despite ongoing regulatory drag. Severe weather impacted New England and Mid-Atlantic USA early this year, but steady growth in construction employment [+19,000 in March v. +18,000 in Feb] doesn’t show any country-wide weather-related employment recovery. Note that hours-worked did fall to 34.3 in Feb before rebounding to 34.5 in March.

Sweet April showers

Do spring May flowers – Thomas Tusser