One portion of your investments does need to go into areas which are high risk and high reward.
According to research conducted by CNBC-TV18 across various cities with police officers, of various carders and ranks, it was found that 71% of the police officers were not at all comfortable investing in the stock markets.
While 23% were somewhat comfortable and this is something, which is affecting their risk profile is the fact that most of them were single-income families, which means that our target groups were the only earning members of that family having three or more dependents.
It was also found that half of those who were surveyed preferred to invest in bank FDs and about a quarter of them opted for investments in insurance products as well. So, Informed investor not only focused on just their financial fitness, but some tips on physical fitness were also provided.
Here are some investment strategies.
Q: It is not surprising that the participation in the equity markets is so low, but I am surprised that out of all the communities that we meet with and interacted so far this is one community, which does not even invest in mutual funds or any investments of that matter. For a single-income family I realised that they wouldn't want to invest in equities per se. How can equities or mutual funds incentivise for people with this kind of a risk profile?
Anand: It is about budgeting. You have an income, you have your expenses, you have EMIs, you should buy insurance and after that is really what you have is savings. Most Indians - they put their money away in fixed deposits. Yes, capital is absolutely safe; no bank has ever gone bust in India. However, savings and fixed deposit is getting killed by two factors the return is taxable and it is not even beating inflation.
In that context, this is not necessarily to this group, but to the larger audience as well that it does make sense to move some money away from fixed deposits into slightly more riskier assets. There is a myth that mutual funds are for the rich. You can actually buy a mutual fund for as little as Rs 1,000 today. So, you can start investing even Rs 1,000 per month over a period of time and that will in a sense start to build a corpus, which if not anything else will at least help you start beating inflation.
Q: You have dealt with a lot of people with the similar risk profile. What's the one common investment mistake that you have seen and how can it be rectified?
Roongta: When you look at an investor profile, you will have people with all kind of preferences which they have basically been inherited with - there are some things which come through generations into their culture.
So, we do hear people saying that equities, my family has never invested, so I am not going to venture out into it. My forefathers told me equity is not for people like me. So, what is important is that once a person is living in a particular century if I may put so, he needs to understand that there are certain things which he needs to do which are relevant to present times.
In India, we have had situations wherein there were a lot of scams if I may put that word, 'a lot' but things are changing now. Regulatory things are turning around, we are seeing stringent norms. There needs to be confidence that needs to be coming in at this point keeping in mind that regulatory environment has changed.
Coming back to this specific group - we know that there are a large number of people who are earning less than Rs 5 lakh - that's the data that we have. A majority of them are less than 29 years of age. So, average age of the group that we see is about 30 years of age. So, if age is to your side and if you are comfortable understanding what kind of products are available today in the industry, listen to it with an open mind, accept it with an open mind.
If they can allocate some funds out of their total corpus, it does work for them. Another reason why it is even more necessary if I may put so, we are seeing that the large numbers have an annual income of less than Rs 5 lakh.
Secondly, if you are going to invest into a product which does not even beat inflation then you are really going to be struggling very hard to meet your goals. So, with that less corpus that you have, you need your money to work harder.
Unless you do that, it is going to be very difficult to achieve your targets. So, one portion of your investments does need to go into areas which are high risk and high reward, but as long as you have restricted it to a small portion of your total corpus, it should not be a cause of concern.
Abidi: It doesn't matter the amount of investment that you are making but a percentage of that needs to go into assets that will work for you, give you much higher returns than other assets would. So, it may not be a very large percentage but a percentage for sure.
Rajiv raised a very interesting point, he said invest in the century that you live in. There is a myth about bank fixed deposits (FD) being safe when they are not even safeguarding the value of your capital.
Anand: Absolutely, I think bank FD is saving and you have to differentiate between saving and investing. Yes, in a bank FD, your capital is safe but the return that is pretty much worthless as you go into time. The other is, ofcourse, taxes and there is nothing much that we can do about taxes. Every rupee of income that we have, we have to pay taxes on and I think we must look at investment as a return on post tax basis. What are the most efficient tools that are available such that I am able to mitigate or minimize the tax that I am paying? I am already paying a fairly large amount of my salary as tax, I certainly don't want to pay too much more on the interest or investment income that I am making and there are numerous tools there.
Section 80C is available which gives you tax breaks. Use those instruments, public provident fund, which gives you tax free income. Utilize those to the maximum and in that sense at least your post tax income is beginning to go up. It's a subsidy which the government is giving back some of the taxation that is taken from you. Utilize all that and then start to use some of the market instruments that are available.
Abidi: So, like they say debt and taxes are the only certainty so I suppose one of the certainties atleast we can try and minimize and till we arrest inflation, let's try and beat that.
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We expect technology licensing company Rambus Inc. (RMBS) to beat expectations when it reports second quarter 2013 results on Jul 18. Why a Likely Positive Surprise? Our proven model shows that Rambus is likely to beat earnings because it has the right combination of two key ingredients. Positive Zacks ESP: Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is at +9.09%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares. Zacks Rank #1 (Strong Buy): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement. The combination of Rambus' Zacks Rank # 1 (Strong Buy) and +9.09% ESP makes us very confident in looking for a positive earnings beat on Jul 18. What is Driving the Better Than Expected Earnings? We believe that Rambus has had a great quarter. Rambus has signed a two-way licensing agreement with European chip-making company STMicroelectronics. Both the companies will use each other's patented technologies for excelling in their core areas. Apart from this, the deal puts an end to the decade-long legal battle between the two companies and also keeps the doors open for further collaborations. Apart from STMicro, Rambus settled legal disputes with South Korean memory chip-making company SK Hynix and signed a patent licensing agreement. Also, Rambus is adding features to its LED (light emitting diodes) portfolio and is on its way to capitalize on the growing popularity of energy-efficient lighting. Rambus has surpassed estimates in the past four trailing quarters, which resulted in an average positive surprise of 176.85%. Other Stocks to Consider Apart from Rambus, we also expect earnings beat ! from the following stocks. SanDisk Corp. (SNDK), Earnings ESP of +4.55% and Zacks Rank #1 (Strong Buy). Huron Consulting Group Inc. (HURN), Earnings ESP of +1.64% and Zacks Rank #2 (Buy). Gartner Inc. (IT), Earnings ESP of +1.96% and Zacks Rank #2 (Buy).
Stocks overcame early pessimism to end higher Friday, another day of records. The Dow Jones Industrial Average gained 30.34 points, or 0.2%, to 15,658.36, topping yesterday's all-time high of 15,628.02. The Nasdaq rose 13.84 points, or 0.4% to 3,689.59, another new 52-week high. The S&P 500 added 2.8 points, or 0.2% to 1,709.44, edging out its previous 1,706.87 high. Bucking the trend, the Russell 2000, which logged a record close yesterday, fell a fraction of a point. It's the second day in a row of record closings, although Thursday's moves were much bigger. For the week, the Dow is up 0.6%, the Nasdaq climbed 2.1%, and the S&P added 1.1%. For the Dow, it was its longest winning streak since the week ending August 17, 2012, when the market rose for six straight weeks. Stocks shrugged off early concerns about a disappointing jobs report. Still, most big news makers were in the red. Chevron (CVX) lost ground on its second-quarter report, as did Alpha Natural Resources (ANR). J.C. Penney (JCP) ended lower despite reports that CIT had lifted its credit restrictions, while Weight Watchers (WTW) sank on its disappointing guidance and the departure of its CEO.
On Wednesday, Finisar (NASDAQ: FNSR ) will release its latest quarterly results. With the stock having traded down sharply from its highs in early 2011, investors are hoping that the company can finally pull off a long-awaited turnaround and send shares higher. Finisar and many of its rivals have faced the difficulty of weak demand for its optical-networking products. But a few signs point to a reversal of that trend, potentially pointing the way to better times for the company. Let's take an early look at what's been happening with Finisar over the past quarter and what we're likely to see in its report. Stats on Finisar | Analyst EPS Estimate | $0.17 | | Change From Year-Ago EPS | (19%) | | Revenue Estimate | $242.95 million | | Change From Year-Ago Revenue | 1.3% | | Earnings Beats in Past 4 Quarters | 2 | Source: Yahoo! Finance. Can Finisar keep its earnings up?
Analysts haven't budged in their views on Finisar's earnings over the past few months, making no changes to their consensus figures for the April quarter. But they've reined in their fiscal 2014 estimates by $0.02 per share, and the stock has responded negatively, falling about 3% since mid-March. Finisar has been under pressure for some time, with factors including slowing growth in China and the ongoing slump in Europe hurting its prospects. Finisar relies on orders from telecom companies and data-network operators, so when business conditions in those industries are poor, the pessimism tends to flow through to Finisar's results as well. But recent good news from Ciena (NASDAQ: CIEN ) has Finisar investors looking for better times ahead. Earlier this month, Ciena's stock jumped 17% after the company reported a 6% increase in sales, pointing to a revival in spending on network infrastructure. Comments from Ciena CEO Gary Smith suggest strength not just for his own company but also for the industry as a whole, and that sent both Finisar and larger rival JDS Uniphase (NASDAQ: JDSU ) higher on the news. JDS Uniphase issued a fairly weak earnings and outlook early last month, needing to temper expectations for a revival in its own sales during the current quarter. As a result, Ciena's news came as a pleasant surprise for the industry, and with Finisar counting Ciena as a customer, Ciena's success reflects directly on Finisar. Finisar can point to several catalysts that could boost its prospects. For instance, Cisco (NASDAQ: CSCO ) , which is also a Finisar customer, has had to respond to challenges from rivals to its networking dominance, and Cisco has also tried to branch out into broader areas of the big data trend. Greater investment from Cisco and its peers could lead to more orders from them for Finisar products, given Finisar's emphasis on makers of storage systems, networking, and telecommunications equipment. In Finisar's quarterly report, watch for commentary about what recent good news from industry peers like Ciena means for the company going forward. If times are indeed getting better, Finisar needs to capitalize rather than letting its competitors grab all the glory. It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading. Click here to add Finisar to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
After slipping yesterday on fears that the Federal Reserve would temper the pace of bond-buying, Wall Street reversed its position, gaining ground as poor economic indicators made continued Fed intervention more likely. The S&P 500 Index (SNPINDEX: ^GSPC ) tacked on 6 points, or 0.4%, to end at 1,654. Not only did the following three companies fail to recover from Wednesday's market decline, but they also ended as the three worst performers in the entire 500-company index. Weyerhaeuser (NYSE: WY ) , which also earned a spot on this ignominious list yesterday, fell 2.9% today. Shares in the company -- which grows and harvests trees, as well as provides end-products such as beams, framing products, decking, insulation, rebar, and plywood -- have fallen four of the past five days. As you can imagine, the company is sensitive to changes in the housing market, and with April's pending home sales growth trailing estimates by 1.2%, investors may be concerned with growth expectations. Plum Creek Timber (NYSE: PCL ) , which, like Weyerhaeuser, is also a REIT with a main focus on -- you guessed it -- timber products, fell 2.5% today. The uber-short-term performance of Plum Creek has also been dismal, with shares slumping more than 8% in the past five days alone. But just last week, shares reached a 52-week high, and why shouldn't they have? A recovery in the housing market is well under way; as the resurgence continues, companies such as Plum Creek Timber and Weyerhaeuser will be there to benefit. Lastly, Kraft Foods (NASDAQ: KRFT ) slipped 2.3% Thursday. The food giant has refocused its business since last year, spinning off the snack-foods division, Mondelez into a company of its own. The split was intended to give each company a more entrepreneurial spirit, and since the decision, Kraft shares have doubled the returns of the Dow. With a well-established brand, a dividend that stands at 3.5%, and a new strategy that seems to be working, Kraft actually doesn't have any major problems threatening its future. Kraft Foods Group is entering a new era after its recent corporate breakup. Its brand power is indisputable and its market share dominates, but Kraft's growth potential is limited, and its heavily commoditized categories face massive pressures. In The Motley Fool's premium report on the company, we guide you through everything you need to know about Kraft, including the key opportunities and threats facing the company. To get started, simply click here now.
International media and marketing shop Arbitron (NYSE: ARB ) announced yesterday its second-quarter dividend of $0.10 per share, the same rate it's always paid since 2005 The board of directors said the quarterly dividend is payable on July 1 to the holders of record at the close of business on June 17. Arbitron is in the process of merging with Nielsen Holdings. If the transaction is completed before June 17, the dividend will be pro-rated at a rate of $0.001063829787234 per share per day for each day after March 15, the record date for its previous dividend. The merger agreement ensures that, regardless of when the deal is consummated, stockholders will receive a dividend at the current rate. The pro rata dividend will be payable within 30 days after the merger closes to shareholders of record at the close of business on the day before the merger is completed. The regular dividend payment equates to a $0.40-per-share annual dividend, yielding 0.9% based on the closing price of Arbitron's stock on May 22. 
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The following commentary was originally posted on FoolFunds.com, the website of Motley Fool Asset Management, LLC, on May 8, 2013. With permission, we're reproducing it here in its original form "To understand is difficult. To act is easy."
-- Attributed to Sun Yat-sen It was just another day at the office. I took the subway downtown, bought a cup of coffee at Starbucks, and walked the remaining few blocks to work. The security guard greeted me from the front desk as I walked onto the elevator. It was just another day -- except I wasn't heading into Fool HQ in Alexandria, Va. -- I was heading to my temporary desk in Taipei, Taiwan. I'm halfway through a 10-week stay in Taiwan, which is quite unusual for me. I feel like less of a Wandering Fool and more of a Lingering Fool. A typical business trip involves a few days at a hotel, meetings with high-interest companies, and perhaps a few minutes to enjoy the culture of a particular city. In the years since Motley Fool Asset Management first launched the Independence Fund, I have taken several trips, and written about a few of them here, but I've never had much time to experience the daily life in another city. My not-so-glamorous job
Visiting companies is great. Talking to management adds value to our investment process. But it's not my entire job. Most of what I do -- probably more than 95% of my time -- is sitting at a computer and reading. Then I think about what I've read, perhaps build an Excel spreadsheet -- and then read some more. On a daily basis, it may appear that all the hours I spend working are producing no tangible output. I really must thank Bill Mann and Motley Fool Asset Management for allowing me to behave in this manner. As Warren Buffett has said numerous times, knowledge is cumulative. The more threads I can pull, the more time I can spend learning, the better decisions I can make for shareholders now and in the years to come. But I really do spend countless hours staring at my computer screen. And so now I am sitting in Taiwan. On a typical day, you will find me at a desk reading exactly the same materials I would have read back in Virginia. The Internet has made gathering information a bit too easy; there is no shortage of material available for my perusal, and I spend most of the day sifting through it. And then I step outside. I wander around the markets in Taipei, observing which goods are most popular, which selling techniques seem to be most effective. I sample the foods and talk to the vendors. I go out for coffee and listen to complaints about corporate bureaucracy. I go to the pub and listen to an American businessman pine for the multinational contract he is about to sign. I don't necessarily know what conclusions this information will help me reach, but I continue to store it away in my mind, collecting knowledge about various topics as an investor collects a diverse basket of stocks. Enough of that; tell us about Taipei
Taipei is an efficient city. As you walk down the street, looking into shops that spill onto the sidewalks, it is difficult to find any wasted space. The city is home to more than 2 million people, but the metropolitan area is closer to 7 million. The subway linking everything is among the most efficient I have seen, and a high-speed train connects the entire country, enabling you to travel from Taipei to Kaohsiung in about two hours. And when you venture outside the city, you will be treated to natural surroundings whose splendor is difficult to overstate. There are plenty of tourist activities in Taipei. There is the world's fourth tallest building, Taipei 101; a bevy of temples and parks; the Taipei Zoo; and a few of the world's most famous night markets. Also, the food is pretty good. As much as I enjoyed seeing those sites, I learned to appreciate the city after I settled in and experienced the daily life. Many office workers are at their desks from 9 a.m. to 6 p.m.; if their bosses work late, they will typically stay as well, whether there are tasks to complete or not. The freedom I am given to set my own hours is unheard of among Taiwanese workers -- to be fair, it is unusual even by American standards. Learning as I go
One of the misperceptions I had a month ago is that America is a better place for fostering entrepreneurship. It turns out there are plenty of entrepreneurs in Taiwan. But instead of launching tech start-ups or seeking venture capital, they manage to open a restaurant, a food stall, or a boutique shop. The people I see at these stores work incredibly long hours and are dedicated to their craft. So entrepreneurs do exist, but it seems more difficult to go from moderate success to the exponential success that we have seen from companies like Google and Facebook in the U.S. Perhaps the opportunity is there, and I must keep searching. Luckily, I have a few more weeks to explore. A visitor's guide
Taipei is a fun city in which to wander aimlessly, letting serendipity be your guide. But if you want a few pointers, here's a start: Best restaurant: Din Tai Fung. Most famous for its xiao long bao, or soup dumplings. There are now several locations in Taiwan, as well as in many other cities around the world. Best foreign restaurant: Persian Heaven. Featuring Iranian cuisine. No. 6 Nanjing East Road Section 5, Songshan District. Best snack: Bubble tea. This drink is now available worldwide, but it originated in Taiwan. Best shopping: Shida Night Market. You'll also do well with the Shilin Night Market, which is one of the largest of its kind in the world, but Shida has plenty of recent college grads trying to create a niche for themselves. During the day, the Ximending neighborhood is also good for people-watching. Best view of the city: Maokong Gondola. Yes, the observation deck at Taipei 101 is worth a visit, but if you take public transit out to the zoo, you can ride a glass-bottomed gondola up into the mountains for less than $2. At the top, you'll be treated to winding paths through tea plantations. Best libations: This is difficult to find since there is no exterior signage, but if you like whiskey, then the MoD Public Bar is an absolute must. Amazing selection, and the prices can't be beat. No. 40, Alley 4, Lane 345, Ren'ai Road Section 4, Da'an District. Editor's note: Tony Arsta is not able to engage in discussion on the boards or in the comments section below. Tony does not own shares of the companies mentioned in this article. The Motley Fool recommends Facebook, Google, and Starbucks. The Motley Fool owns shares of Facebook, Google, and Starbucks. The Motley Fool has a disclosure policy. link
On Wednesday, Ford (NYSE: F ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move. Ford's comeback over recent years has been nothing short of spectacular, as the automaker managed to regain its footing without government assistance to turn the tables on its competitors both in the U.S. and abroad. But how can the company keep its momentum going forward? Let's take an early look at what's been happening with Ford over the past quarter and what we're likely to see in its quarterly report. Stats on Ford | Analyst EPS Estimate | $0.38 | | Change From Year-Ago EPS | (2.6%) | | Revenue Estimate | $33.78 billion | | Change From Year-Ago Revenue | 10.6% | | Earnings Beats in Past 4 Quarters | 4 | Source: Yahoo! Finance. Will Ford keep driving its earnings ahead this quarter?
In recent months, analysts have toned down their enthusiasm about Ford's earnings prospects, cutting their estimates for the just-finished quarter by $0.04 per share and more aggressively reducing full-year 2013 earnings-per-share estimates by $0.07. The stock has gotten stuck in reverse as a result, losing almost 10% of its value since mid-January. Ford has seen dramatic successes in its U.S. market lately, with pent-up demand for new vehicles finally starting to work its way through to new sales. New models in its small fuel-efficient-vehicle segment and strength in its core truck division have bolstered growth, helping Ford take advantage of improved economic conditions for buyers. But internationally, Ford has a tougher road to follow. On one hand, Europe has been problematic for automakers everywhere, as the weak economy there, combined with the challenges of the European labor markets, has caused losses not only at Ford but also its competitors. In China, though, Ford has lagged behind General Motors (NYSE: GM ) , which got a head-start in pushing into the emerging-market country. GM sold six vehicles in China last year for every one that Ford sold, even though Ford's new Focus has been a huge hit in the emerging-market country and could help the company catch up to GM. The other area for Ford to address is gaining a bigger presence on the luxury end of the market. Toyota's (NYSE: TM ) Lexus and GM's Cadillac have both made huge names for themselves for high-end buyers, but Ford has largely missed out on that end of the demographic spectrum. Efforts to reinvigorate its Lincoln division haven't gone as well as many hoped, threatening to leave Ford without an obvious strategy to keep its share of the luxury market. In Ford's quarterly report, be sure to look beyond the sales figures that we've already gotten to focus instead on whether the company remains on track to score big improvements in profitability, especially overseas. Sales are important, but producing more income from them is the key to future gains for Ford investors, both in the form of further dividend increases as well as share-price increases. Find out more about Ford's turnaround and its big growth opportunities ahead by joining the Fool's premium Ford research service. Inside, our top analysts look at the automaker's prospects for the future, with freshly updated guidance on Ford's potential both now and in the long run. Click here to get started now. Click here to add Ford to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
Just one month after alerting investors to the possibility, Broomfield, Colorado-based Level 3 Communications (NYSE: LVLT ) is under new management today. The global voice and data carrier announced Thursday that company President and Chief Operating Officer Jeff K. Storey has been promoted to Chief Executive Officer, replacing outgoing CEO James Q. Crowe. A five-year veteran of the company, and 30-year veteran of the industry, Storey was said to have been "the clear and unanimous choice of the Board" to replace Crowe. In addition to the new job, Storey also gets a new and improved pay package. In a filing with the SEC Thursday, Level 3 described how Storey will receive: A 46% increase in salary to $950,000 a year An increase in his annual long-term incentive awards from 75,000 outperform stock appreciation rights (essentially, virtual stock options), to 100,000 A similar increase in his allotment of restricted stock units from 75,000, to 100,000 The balance of Storey's compensation will remain "at the award levels originally granted to him."
 The S&P 500 Index (SNPINDEX: ^GSPC ) ended modestly higher on Friday, ending the week on a bullish note as the end of the second quarter approaches. Wall Street and Main Street alike are hoping that the second, third, and fourth quarters of 2014 will see higher growth than the first quarter, when the U.S. economy actually contracted at a 2.9% annualized rate. Dollar General (NYSE: DG ) , VeriSign (NASDAQ: VRSN ) , and DuPont (NYSE: DD ) investors weren't too optimistic about growth today, as those three stocks ended as the worst performers in the entire S&P index. The S&P, for its part, tacked on three points, or 0.2%, to end at 1,960. Dollar General lost 7.3% today after the company's Chairman and CEO, Richard W. Dreiling, surprised the stock market by announcing his retirement. Investors have plenty of reasons to like Dreiling, 60, who took control of the company at the beginning of 2008. Under his guidance, the dollar store went public in 2009, increased sales by more than 80%, and expanded its store count to more than 11,000 locations. The silver lining is that Dreiling could stay on at Dollar General for nearly another year -- until May 30, 2015 -- as the board searches for a successor. VeriSign, which offers domain name registry, network intelligence, and other domain name-related services, shed 3.9% on Friday. A downgrade from Wells Fargo is behind today's drop, as the bank lowered its rating from outperform to market perform, noting that overall domain name registrations in the second quarter are trending lower than the company's midpoint expectations. Google's announced entry into the domain name market earlier this week also threatens to hurt VeriSign's business, especially if Google decides to offer domains at steep discounts, or even give them away for free.  DuPont is seeing farmers switch to soybeans as corn prices drop. Image Source: DuPont. Finally, shares of chemicals giant DuPont slumped 3.3% today, giving the stock the ignominious distinction of being the Dow Jones Industrial Average's worst daily performer. The company warned investors late yesterday that it expects full-year 2014 earnings to come in between $4.00 and $4.10 per share, notably less than the $4.20 to $4.45 in per-share operating earnings it previously projected. In an industry that increasingly relies on genetically modified and patented seeds for a leg up on competition, DuPont is still subject to the whimsy of Mother Nature and Mr. Market, and challenging weather and falling corn prices combined to put the company in a tough position to grow substantially this year. Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!
DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility. Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors." Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock. With that in mind, let's take a look at several stocks rising on unusual volume recently. KEYW Holding KEYW Holding (KEYW), through its subsidiaries, provides mission-critical cybersecurity, cyber superiority, and geospatial intelligence solutions to the U.S. Government defense, intelligence, and national security agencies, and commercial enterprises. This stock closed up 5.5% to $10.70 in Monday's trading session. Monday's Volume: 1.27 million
Three-Month Average Volume: 601,773
Volume % Change: 108% From a technical perspective, KEYW ripped higher here right off its recent low of $9.98 with above-average volume. This stock has been downtrending badly for the last two months and change, with shares sliding lower from its high of $23.09 to its recent 52-week low of $9.98. During that downtrend, shares of KEYW have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of KEYW are now starting to rebound off its 52-week low of $9.98 with strong upside volume flows. This move could be signaling a trend change is in the cards for KEYW in the short-term. Traders should now look for long-biased trades in KEYW as long as it's trending above Monday's low of $10.31 or above its 52-week low of $9.98 and then once it sustains a move or close above Monday's high of $11.15 to some more near-term overhead resistance at $11.50 with volume that hits near or above 601,773 shares. If that move kicks off soon, then KEYW will set up to re-test or possibly take out its next major overhead resistance levels at $13.35 to its 200-day moving average of $14.37. InterMune InterMune (ITMN), a biotechnology company, focuses on the research, development, and commercialization of therapies for pulmonology and orphan fibrotic diseases in North America and Europe. This stock closed up 13.4% at $38.92 in Monday's trading session. Monday's Volume: 11.92 million
Three-Month Average Volume: 3.56 million
Volume % Change: 350% From a technical perspective, ITMN gapped sharply higher here right above its 50-day moving average of $32.38 with heavy upside volume. This monster spike higher on Monday pushed shares of ITMN into breakout and 52-week-high territory, since the stock took out some near-term overhead resistance levels at $36.71 to its former 52-week high of $38.73. Market players should now look for a continuation move to the upside in the short-term if ITMN manages to clear Monday's intraday high of $39.90 with strong volume. Traders should now look for long-biased trades in ITMN as long as it's trending above $37 or above Monday's low of $35.85 and then once it sustains a move or close above $39.90 with volume that this near or above 3.56 million shares. If that move starts soon, then ITMN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $45 to $50. Guidewire Software Guidewire Software (GWRE) provides system software to the property and casualty insurance industry primarily in the U.S., Canada, Australia, the United Kingdom, and internationally. This stock closed up 4.6% at $37.57 in Monday's trading session. Monday's Volume: 1.14 million
Three-Month Average Volume: 673,646
Volume % Change: 96% From a technical perspective, GWRE ripped higher here right above its recent 52-week low of $33.66 with strong upside volume flows. This stock has been downtrending badly for the last two months and change, with shares moving lower from its high of $58 to its 52-week low of $33.66. During that move, shares of GWRE have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of GWRE are now starting to rebound off its 52-week low of $33.66 with bullish upside volume flows. This spike higher on Monday could be signaling that shares of GWRE are ready to enter a new uptrend in the short-term. Traders should now look for long-biased trades in GWRE as long as it's trending above Monday's low of $35.68 and then once it sustains a move or close above Monday's high of $37.84 to some more near-term resistance at $39.91 with volume that hits near or above 673,646 shares. If that move begins soon, then GWRE will set up to re-test or possibly take out its next major overhead resistance levels at $43.30 to its 50-day at $43.85, or even its 200-day at $46.58. To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr. -- Written by Roberto Pedone in Delafield, Wis. RELATED LINKS: >>5 Stocks Set to Soar on Bullish Earnings >>5 Stocks Ready to Break Out >>5 Rocket Stocks Ready for Blastoff Follow Stockpickr on Twitter and become a fan on Facebook. At the time of publication, author had no positions in stocks mentioned. Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.
 Daniel Acker/Bloomberg via Getty ImagesBillionaire Seth Klarman. Among the tattered cookbooks and celebrity biographies at thrift stores and yard sales, you might find financial books whose advice on investing once seemed relevant but now just seems silly. However, the next time you find yourself in this situation, take a closer look, because you might also find the Holy Grail of investment books. Boom and bust cycles in the economy and the stock market often give rise to short-sighted investing theories which financial writers try to exploit. Perhaps the best example is "Dow 36,000," written by Harvard-educated journalist James K. Glassman in 1999 at the height of the dot-com bubble, which predicted a 300 percent rise in the market within 10 years. We're still waiting, James. 'Margin of Safety' It is very rare to find an investing book that stands the test of time, and perhaps the rarest of the rare in that category is "Margin of Safety," written in 1991 by billionaire investor Seth Klarman. Long out of print, less than 5,000 copies of this hardback book exist, and used copies regularly go for $2,500 or more online. The book is divided into three sections: "Where Investors Stumble," "Value Investing Philosophy" and "The Value-Investment Process." He explains his motivation in the introduction:
Investors adopt many different approaches that offer little or no real prospect of long-term success and considerable chance of substantial economic loss. Many are not coherent investment programs at all but instead resemble speculation or outright gambling. Investors are frequently lured by the prospect of quick and easy gain and fall victim to the many fads of Wall Street. My goals in writing this book are twofold. In the first section I identify many of the pitfalls that face investors. By highlighting where so many go wrong, I hope to help investors learn to avoid these losing strategies. For the remainder of the book I recommend one particular path for investors to follow -- a value-investment philosophy. Warren Buffett Is a Fan If you think that some of this sounds familiar, you might be right. Klarman, 56, is often called the "Warren Buffett of his generation," and Buffett is said to have a copy of "Margin of Safety" on his desk. But the connection between Klarman and Buffett doesn't stop there. Both run multibillion-dollar funds; both use the concepts pioneered by legendary value investor Benjamin Graham when evaluating their investment portfolios; and Klarman's name has long been floated by Berkshire Hathaway shareholders as a potential successor to the Oracle of Omaha. Klarman has had an impressive financial career which, unlike Buffett's, has largely gone unnoticed by the public and financial media. A product of Cornell and Harvard, where future CEOs, GE's (GE) Jeff Immelt and Jamie Dimon of JPMorgan Chase (JPM), were among his classmates, Klarman initially worked for Franklin Templeton Funds before starting Baupost Group in 1982. Baupost manages more than $25 billion in client funds and has an astounding performance record, averaging 20 percent annual returns since its inception. Numbers like that consistently rank Klarman in the top 25 highest-earning fund managers by Forbes, with his total compensation for 2013 coming in at $350 million and net worth estimated to be $1.3 billion. How much of that net worth is comprised of unsold copies of "Margin of Safety" is unknown, but fortunately, you don't have to have big bucks in order to read it, as it's available online in PDF version for free.
Ex-dividend dates are very important to dividend investors, since you must purchase a stock prior to its ex-dividend date in order to receive its upcoming dividend payout. For more information, check out Everything Investors Need to Know About Ex-Dividend Dates. Below we highlight seven big-name stocks going ex-dividend on Friday, April 11. 1. AbbVie Inc. AbbVie Inc. (ABBV   ) offers a dividend yield of 3.32% based on Wednesday's closing price of $50.63 and the company's quarterly dividend payout of 42 cents. The stock is down 2.6% year-to-date. Dividend.com currently rates ABBV as “Recommended” with a DARS™ rating of 3.5 stars out of 5 stars. 2. Abbott Labs Abbott Labs (ABT) offers a dividend yield of 2.34% based on Wednesday's closing price of $37.63 and the company's quarterly dividend payout of 22 cents. The stock is down 1.57% year-to-date. Dividend.com currently rates ABT as “Neutral” with a DARS™ rating of 3.4 stars out of 5 stars. 3. Trinity Industries Trinity Industries (
HONG KONG (MarketWatch) -- Hong Kong stocks opened lower Tuesday, after China's central bank reportedly drained 48 billion yuan ($7.9 billion) from the money market on Tuesday through bond-repurchase agreements. The Hang Seng Index (HK:HSI) moved lower by 0.3%. Banks retreated, as China Merchants Bank Co., (HK:3968) (CIHHF) declined 2.2%, Bank of Communications Co. (HK:3328) (BKFCF) fell 1.6%, China Minsheng Banking Corp. (HK:1988) (CMAKY) lost 1.4%, and China Citic Bank Corporation (HK:998) (CHCJY) dropped 1.2%. China's Dongfeng Motor Group Co. (HK:489) , currently in negotiations to buy a stake in PSA Peugeot Citroen, suspended trading of its H-shares in Hong Kong markets. The state-owned car maker didn't clarify the reason in the announcement. On Monday, the company said in a filing that its commercial-vehicle unit has been served with a request for arbitration by a Brazilian firm, which is seeking damages of approximately 1.67 billion Brazilian reals ($700 million) for Dongfeng's failure to establish a joint venture with the firm. On the mainland, the Shanghai Composite Index (CN:SHCOMP) gave up 0.5% to 2,125.54.
The bad news: Major stock indexes finished lower today. The good news: The damage was not as bad as it could have been, as Walt Disney (DIS), International Business Machines (IBM), 3M (MMM), Walgreen (WAG) and Genworth Financial (GNW) rose.  Bloomberg The S&P 500 fell 0.2% to 1,751.64 today after falling by as much as 1% earlier in the day. The Dow Jones Industrial Average, meanwhile, finished little changed at 15,440.23 after falling by as much as 0.7%. Instinet’s Frank N. Cappelleri assesses the half empty/half full trading day: …it was good seeing 1740 hold, but I would have like to have seen yesterday’s high broken on this afternoon’s strength, as well…The more times the market fails at leveraging this oversold condition, the higher the likelihood that this current pattern turns into another bearish flag formation, in my opinion. We’ll just have to see of the bulls can follow through on the demand that did appear today. U.S. Bank Wealth Management’s Terry Sandven isn’t worried by the market’s recent weakness: In our view, equities seem likely to continue to trend higher in 2014, but at a more moderate pace compared to 2013. Following the recent price decline, the risk/reward profile has arguably improved. The extent to which the extreme cold weather conditions have negatively impacted the economy near term is not likely to be determined until after another round of readings are released between now and early March. This may imply a generally sideways-trending market in February as investors maintain a wait-and-see approach. Shares of Walt Disney rose 1% to $71.76 ahead of this evenings results (it beat), while International Business Machines gained 0.8% to $174.24 and 3M advanced 0.5% to $127.36 after announcing a new plan to buy back its stock. Walgreen gained 3.4% to $57.85 after its same-store sales rose 2.9%, beating analyst forecasts, while Genworth Financial advanced 2.8% to $14.93 after beating earnings.
The economy abounds with hopeful signs as the new year arrives, enough that the Federal Reserve will begin to put its easy-money punch bowl on a higher shelf by trimming its bond purchases this month. But after five years of crisis, recession and an aren't-we-there-yet recovery, we don't fully trust the signs. And that's why Mesirow Financial economist Diane Swonk sums up the outlook in a nutshell: "2014 could be the breakout year,'' she says. "This is the year when we're going to find out.'' Find out what? • Whether young adults who have put off forming households finally move out of Mom and Dad's, giving housing construction a needed boost. • Whether the economy can really grow at an annual pace of 3% to 3.5%, generating 250,000 jobs a month and pushing unemployment to near 6% of the workforce, once freed of the drag from higher federal taxes and spending cuts that depressed 2012 and much of 2013. • Whether the torpor of the last few years, in other words, was simply a bad hangover from an especially nasty, debt-fueled recession — or whether the economy has entered a sluggish New Normal, where 2% to 2.5% annual growth and a 7%-ish unemployment rate are as good as it gets. 2014 STOCK OUTLOOK: Can mighty Wall St. bull keep charging in the new year? 5 RISKS: Potential problems that could derail the bull market For the first time in years, forecasters got the U.S. economy basically right in 2013. The consensus outlook said the private economy would grow 3% or more, while a shrinking government would cut as much as 1.5 percentage points off growth, either directly or indirectly, leaving the overall economy growing 2% or so. That's what has largely happened, at least until a fall surge in spending and hiring raised hopes before the final numbers are calculated. November data were better-than-expected across the board, with hiring and retail sales beating forecasts and unemployment dropping to 7.0% for the first time in five years. And! a big upward revision in data on the economy's third-quarter growth, announced Dec. 20, to 4.1%, suggests the push began sooner. The optimism, as always, is qualified. The bull case depends on a sustained upturn in housing, as prices that are rising, if more slowly than in early 2013, spur significantly more construction to match the ongoing surge in auto sales. That's an especially big factor in the South, where half of new homes are built. But to get there requires better wage gains to support home payments and consumer confidence as interest rates rise to more normal levels — and those wage gains have only recently begun. Here are four reasons to expect growth to pick up — and four more to worry that it won't. 1. The housing recovery seems real this time. The top reason the recovery feels different this year is that housing is on more solid footing. The big question is, exactly how solid is it? The biggest missing gap in the job market is that construction employment is down 1.9 million from 2007, including 1.4 million in home building and related categories. With total private-sector employment only about 700,000 below the peak — and manufacturing output back to setting all-time highs — the importance of housing is clear. 2014 forecasts for housing starts run from just under 1 million to as high as 1.35 million, up from about 950,000 in 2013. Moody's Analytics estimates each extra start is worth about 4.5 jobs, though rival consulting firm IHS says it's closer to three (Moody's includes more of the workers in ancillary industries, such as home-improvement stores). A housing market near the high end of forecasts could generate a million new jobs, pushing unemployment down by 0.7 of a percentage point or more. 2. State and local governments have healed. One of the biggest changes in 2013 was that state and local governments went from firing people to hiring again, adding 127,000 workers through November on a base of about 19 million. That's! because ! their spending turned slightly higher in the second and third quarter, the first two-quarter gain since the recession. Coming out of the last three recessions, state and local governments added 150,000 to 200,000 jobs a year, on a smaller base. The state and local government recovery has room to grow more. Outgoing Fed Chairman Ben Bernanke pointed to one reason in his final press conference Dec. 18 — in the last three recessions or their immediate aftermath, government employment actually rose. This time, governments have shed about 1.1 million workers since 2010. 3. Falling energy prices and slower increases in health care costs are keeping inflation low. The collapse in medical inflation since 2007, and the containment of total health spending it helps to enable, is one of the best things the economy has going for it. Medical inflation is at a 50-year low, with prices rising just 2.2% in the last 12 months. With the most important cost-containment measures in the Affordable Care Act just beginning to be implemented, it stands to stay low. That lessens a key cost pressure on businesses — and may free up more money to pay higher wages. Also, energy prices have fallen 4.8% in the last year, the government says, helping both household budgets and corporate income statements. 4. Washington has shut up — mostly. Economist Joel Naroff's favorite political joke is that "the only thing we have to fear is Washington itself.'' And Washington's actions did cut growth nearly in half in 2013 by many estimates. But budget cuts coming this year are much smaller, shrunk even farther by the budget deal reached in December that reworked automatic spending cuts mandated by a 2011 law. Plus, no major tax increases are planned. Compared with 2013, less Washington drag on the economy could mean an additional percentage point or more in growth. Four reasons why the economy won't break out: 1. Washington is not that good — and we still have the debt ceiling. Federal! spending! cuts will still shave a few tenths of a point off GDP growth this year — reducing the growth rate about 0.3 percentage points, Naroff said. The main risk from D.C. early in 2014 is that there may be another showdown over the debt ceiling. House Budget Committee Chairman Paul Ryan said Republicans want concessions for raising the borrowing limit before March — but haven't decided what. 2. Capital investment is low. Growth in spending on business equipment, the category of investment most closely tied to boosting productivity, plunged to near zero by the third quarter from a double-digit pace in 2010 and 2011, helping to fuel a $2.2 trillion "investment gap,'' of money not spent since 2007, according to the Progressive Policy Institute. Next year, it's expected to grow just 3.1%, the Equipment Leasing & Finance Foundation says. That's versus double-digit percentage gains in 2010 and 2011. This problem may evaporate by the second half of the year, especially if consumer spending sustains its recent pickup into early 2014, Goldman Sachs economist Jan Hatzius argues. Historically, capital spending has depended on consumer spending and credit availability — and both are improving, he says. 3. Interest rates will rise this year, which may slow the housing recovery. As the Federal Reserve reduces and eventually ends its $85 billion of monthly bond purchases, mortgage rates are likely to rise — just as they did in the summer, when the Fed first hinted at the so-called "taper.'' In 2013, that blip caused momentum in the housing recovery to stall briefly. With the average rate for 30-year mortgages now 4.48%, up from 4.1% in late October, and the National Association of Realtors projecting that they will rise another percentage point next year, it's too soon to know whether higher rates will slow the hoped-for construction boom. New-home sales and construction data from the fall suggest not. But it's a risk that bears watching. 4. Wage growth is still tepid! , and a r! ecent improvement is not well-established. After a long decline, wages and personal income have turned higher in late 2013. The hope is that workers will get better raises as unemployment falls toward 6%. But the average gain in the last 12 months is just 2% — enough to offset the expiration of the payroll tax holiday last January, but no more than that. If employers keep the upper hand in wage talks, that hurts consumer spending and home buying — and risks another year of sluggish growth. Goldman's Hatzius says consumer spending can sustain its recent gains with inflation-adjusted wage gains around 2%, because rising household wealth and an improving jobs market let consumers save less without taking a risk. If wages rise faster, that would be the icing on the cake, Hatzius says. Higher wages and more plentiful jobs might also prove key to people forming more households, buying more homes, and even having more babies and spending more on diapers and clothes, Swonk said. The recession and its aftermath didn't just change how people shopped — it changed how they lived, she said. A lot depends on whether young people who have struggled to build careers and begin families amid the post-2008 mess move on with their lives, she says. We'll find out beginning this week.
HONG KONG (MarketWatch) -- Oil futures pulled back on Tuesday as investors await weekly data on U.S. crude supplies. Crude oil for January (CLF4) fell 20 cents, or 0.2%, to $97.28 a barrel in electronic trading. Oil prices on Monday rose 88 cents, or 0.9%, to settle at $97.48 a barrel, on the prospect of tighter supplies after Libyan rebels refused to open three oil ports . The American Petroleum Institute will release its weekly inventory report later Tuesday, at 4:30 p.m. Eastern, followed on Wednesday by weekly data from the U.S. Energy Information Administration.  Shutterstock.com The mix of plant chemical fertilizer and manure on farmer hands. U.S. crude oil stocks are expected to have fallen 4 million barrels during the week ended Dec. 13, according to oil analysts surveyed by the Platts. Crude supplies have fallen more than 16 million barrels during the past three reporting weeks. Meanwhile, U.S. distillate stocks are expected to have fallen 1 million barrels last week, while gasoline stocks are estimated to have increased 1.4 million barrels, the Platts survey said. In other trading on Tuesday, Brent crude for January delivery (UK:LCOF4) climbed $1.63, or 1.5%, to $110.46 a barrel. January gasoline (RBF4) inched up less than 1 cent to $2.65 a gallon, while January heating oil (HOF4) was unchanged at $2.99 a gallon. January natural gas (NGF14) added 1 cent, or 0.3%, to $4.29 per million British thermal units.
Author and former financial planner Frank Maselli tells a story of a man who retired and went home to spend his days with his wife. It didn't take long for him to become a major intrusion in his wife's world. He told her the way she did everything was wrong, even the garden she had tended for 25 years. "She had to kick him out of the house," he said. "She made him get involved with a charity group and start going to the gym." It's a huge adjustment to shift from spending two or three hours a night to spending all day together, says author and psychologist Robert Bornstein. "It happens all at once. It would be nice to go from full-time to half-time to quarter-time, but that's not how it works." "Take the normal stress of a transition into retirement," says Maselli, "and throw in the fact that your wife can't stand seeing you all day." People are working with financial planners to make sure that they will have enough money to retire. But what they are not doing, retirement experts say, is preparing psychologically for retirement. And as a result, three big problems are popping up. First, retirees without any kind of a plan are just going home to their spouses with nothing to do and causing stress in their marriages. "We are the first generation who is going to live 30 years in retirement," says Maselli, who is based in Raleigh, N.C. "We are not prepared financially or emotionally. It will be a major issue." Second, people who have been working for 30 or 35 years are suddenly home with absolutely nothing to do. "You lose a ready-made social network," says Bornstein. "We don't think about it that much. Much of your daily social contact comes from the office. When you are no longer going into the office, it's not uncommon for people to discover that they have few or no friends." Third, says Bornstein, people underestimate the loss of status and self-esteem that comes from working. "So many people identify with their career or the company they own," he says. "Their pr! ofession and their identity are intertwined. The two are one and the same, So when they retire and separate, it is a loss from an emotional standpoint." All three issues could be contributing to a record divorce rate among Baby Boomers. But the resulting stress can easily be avoided if people retire with a plan, retirement experts say. And foremost in that plan, set a schedule and make plans to do something ... anything. Just do not sit around with the TV remote. "Most couples don't prepare well psychologically for retirement because they are so focused on financial and housing issues, which makes sense," Bornstein says. Joe Heider, managing principal for the Ohio region for Rehmann Financial, says the issue reminds him of the Chevy Chase vacation movies. "It's kind of like being on a permanent family vacation. There is a lot of stress being with each other 24/7. All those things that were annoying suddenly became difficult — if they don't have hobbies." "A big depression sets in with a lot of guys," Maselli says. "It's a major problem. You've worked for years. They give you a gold watch. Then what? What happens to that emotional intensity? It goes into me arranging my wife's spice drawer." Heider says it can be a dangerous time. "I have seen clients who have developed serious drinking problems because they're bored," says Heider. "Happy hour used to start at 5:30; now it starts at noon. Retirement can be a wonderful thing. But depression, drinking, drug issues — they are all symptomatic of people bored and their lives have lost meaning for them." Financial planner Brad Zucker, president of Safe Money Advisors in Las Vegas, says before people retire they need to find their passions. "Retirement could last 25 years," he says. "You want to be certain you have some kinds of interests and passions to make it through those years." Zucker says he has one client who turned his love of baseball into becoming an assistant coach for a high school baseball team — at 71. Mase! lli teaches a program he calls "Never Retire," which deals with the psychological transition into retirement. "We actively tell people and teach people how to restructure their lives — not to retire," he says. "Start a business. Don't think about slowing down. "You want to relax," he says. "That goes away in a week." He says retirees should think about mentoring, teaching, board memberships ... anything to keep busy. And make those necessary contacts before you retire. Heider says retirees should also consider volunteering as an option. "Volunteer your expertise to whatever you were doing," he says. "Spend time mentoring a young entrepreneur. It gives them something meaningful to do with their time." Retiree George Milonas, 84, of Las Vegas says he gets up every morning on schedule. "It's like going to a job," he says. His passions are sports, horse racing and playing the slots. And that works for him because he has the funds to do that, he says. Janet Taylor, psychologist and a consultant with AARP's Life Reimagined program, says the success and well-being of couples in retirement depends on their pre-retirement planning. "Plan early; communicate expectations; and recognize what the existing demands are," she says. "Initially, retirement might involve understanding and accepting changes in your personal privacy," Taylor says. "After a few months there is some normalcy and some understanding. But give yourself time to adjust to that." But start planning early. "Rule No. 1 is to start thinking about this now," says Maselli. "What are you going to do? What kinds of things will you be doing together? How much time can you stand each other together? How will you structure your day so that you are out of the house?" And how did it end for the husband who got kicked out of the house? "He learned to stay active, and his wife learned to be patient with him," Maselli said. "The charity work led to more community involvement. But the gym thing never caught on."!
It takes a true optimist to think that Congress in its current state could accomplish anything worthwhile. The recurring government shutdown threats when it's time to pass a budget or raise the debt ceiling hardly inspire confidence. Nor do the lawmakers' inability to pass even relatively modest gun control legislation in the wake of an appalling series of mass murders, or to enact desperately needed immigration reform. But that's no excuse to give up. As the great Pink taught us, you've got to get up and try. And so four senators, led by Ron Wyden, D-Ore., last week introduced legislation that would rein in the National Security Agency's rampant surveillance campaign revealed in documents leaked by former NSA contractor Edward Snowden. Good for them. The bill would: • End the bulk collection of telephone records of American citizens, the overwhelming majority of whom have no ties to terrorism or other nefarious deeds. • Scale back the PRISM program, under which the government can obtain people's digital records from major Internet companies such as Google, Facebook and Microsoft. • Make the supersecret Foreign Intelligence Surveillance Court somewhat less secret, declassifying its major opinions and for the first time creating an independent advocate who could serve as a counterweight to government demands. • Allow private companies to be more open about instances when they are asked to share information about the communications of American citizens. Of course, I wouldn't advise you to bet the rent money that the bill will become law anytime soon. But the sheer fact that it is on the table shows how much the climate has changed in the wake of the Snowden tsunami. Even die-hard supporters of the surveillance, like Sen. Dianne Feinstein, D-Calif., chairman of the Senate Intelligence Committee, are jumping on the reform bandwagon. Feinstein and Sen. Saxby Chambliss, R-Ga., are also drafting legislation, although their proposal is likely ! to nibble around the edges rather than be as far-reaching as Wyden's. RIEDER: Snowden affects House vote on phone records We've come a long way since June, when Feinstein said Snowden was guilty of treason and House Speaker John Boehner, R-Ohio, labeled him a "traitor," while commentators who should know better were dismissing him as a slacker and a loser. Public opinion surveys have shown real concern on the part of the American people about the extent of the government snooping. There's no doubt Snowden broke the law by releasing classified information. And if he ever tires of his Russian redoubt and returns to the U.S. — don't wager heavily on that, either — he would and should face prosecution. But I give him credit for the way he released information, not via a massive, indiscriminate document drop but by working with respected news organizations, including Britain's Guardian newspaper, The Washington Post and The New York Times. On Sunday the Times had another Snowden special, on the NSA's efforts to track the social connections of U.S. citizens. We live in a dangerous world, and it's obviously important that intelligence agencies do their utmost to protect us. But it's also vital that they do it, well, intelligently — and ethically. The wholesale collection of the communications records of ordinary citizens, authorized without their knowledge, is just not the way to go in a free society. Spy away on the bad guys, sure, but with appropriate safeguards. And it's not clear what, if anything, we have gotten in return for the erosion of our privacy. As The New York Times reported last week, "Officials have struggled to identify terrorist attacks that would have been prevented by the call log program, which has existed in its current form since 2006." Sadly, there are some who remain in denial about this troubling episode. At a Senate Intelligence Committee hearing last week, defenders of the surveillance fell back on that time-dishonored stra! tegy of b! laming the messenger. NSA Director Keith Alexander and Sen. Dan Coats, R-Ind., said the furor was due to shoddy reporting by the news media. But most people know better. And let's hope, ultimately, pressure will build for meaningful reform. As Wyden said in a speech in July, "If we do not seize this unique moment in our constitutional history to reform our surveillance laws and practices, we will all live to regret it."
NEW YORK (TheStreet) -- This week marks the fifth anniversary of when the banking regulators finally realized that the Great Credit Crunch was a real and current danger to the banking system and hence the U.S. economy. Today, the National Association of Home Builders, or NAHB, reports its Housing Market Index for September. The reading for August was a multi-year high of 59, well above the neutral 50 reading. This reading was just 17 and on the way to a record low of 8, in January 2008. Five years ago, the federal funds rate was at 2%, lowered to that level on April 30, 2008. On Oct. 8, the rate was cut to 1.5% then to 1% on Oct. 29, and then to 0% on December 16, where it remains today. In my opinion, this rate should never have been taken below 3%, as savers have been pinched for five years now. In mid-September 2008, initial jobless claims were 488,000 and this statistic did not peak until March 2009, at 651,000. Last week, this reading was below 300,000. The four-week moving average was 321,250, below the recessionary threshold of 350,000. The "too big to fail" money-center banks began to get bigger in January 2008, when Bank of America (BAC) bought Countrywide Financial. Then in mid-September, it took over Merrill Lynch. Next week, the company gets booted from the Dow Jones Industrial Average, despite being up 56.2% over the last 12 months. [Read: Our 401(k)s Show We're Not Taking Investor Confidence Seriously ] JPMorgan Chase (JPM) took over Bear Stearns in March 2008, after the Federal Reserve stripped out the toxic assets. Then in late-September, it added Washington Mutual. JPMorgan is the only money center and major regional bank with a buy rating, according to ValuEngine, but it appears to be on the cusp of a downgrade to hold. Today the banking giant faces a fine of up to $800 million in settlement of the legal issues associated with the $6 billion loss from the "London Whale" trade. Citigroup (C) appeared to have added Wachovia in an FDIC-led merger on Sep. 29, 2008, but was left at the merger altar when Wells Fargo (WFC) bought Wachovia with a much better bid on Oct. 3, 2008. Last week, on Sept. 9, I wrote JPMorgan Upgraded as Banking System Heals, where I showed that the "too big to fail" banks continue to get bigger. As a foursome, JPMorgan, Citigroup, Wells Fargo and Bank of America control about 44% of the $14.41 trillion total assets in the banking system. Also on Sept. 9, I wrote, Housing Bubble Is Re-inflating and on Wednesday morning, we will get the latest reading on single-family housing starts, which is the key statistic for the homebuilders. Higher home prices, higher mortgage rates and continued tight lending standards for C&D loans for builders and mortgage loans for home buyers could result in a slowdown in the housing market. On Sept. 10, I wrote, Bank Earnings Rise, but Not Real Estate Lending and on the same day we learned that the "too big to fail" banks were experiencing a significant drop-off in mortgage originations, and the foursome announced significant job cuts in this business line. [Read: Wall Street's Concerns on Apple Are Misplaced] A key statistic that has been ignored on Wall Street and in the media is the fact that the FDIC Quarterly Banking Profile for second-quarter 2013 showed a mark-to-market loss of $51.1 billion in fixed-income securities in the "available for sale" category. So far in the third quarter, U.S. Treasury yields have moved even higher, so this mark-to-market is likely growing. On Sep 11, I wrote, Community Banks With CRE Loan Exposures, where I showed 90 publicly traded banks that were still overexposed to CRE loans. I followed up this story on Sep. 13 in, Umpqua Holdings Buys Sterling Financial; Sterling Financial (STSA) was on my list of 90 that I profiled in this post. Sterling had a buy rating, according to ValuEngine. Last Friday, the FDIC closed First National Bank, Edinburg, Texas, using their bank failure procedures. This bank was not publicly traded, but it illustrates the problems that remain in the banking system. First National had $3.28 billion in assets at the end of the second quarter, with $341 million in C&D loans on its books. Its C&D to risk-based capital ratio was 314.4%, well above the 100% regulatory guideline. Its CRE to risk-based capital was 1,214.1%, well above the 300% regulatory guideline. The CRE loan commitments were 94.3% funded. This failure cost the FDIC Deposit Insurance Fund $637.5 million. [Read: Behind the Ethanol Scandal ] At the end of fourth-quarter 2010, First National Bank had $3.83 billion in assets with $622 million in C&D loans on its books. Its risk ratios at the end of 2010 were 181.0% and 492.7%, respectively, with a pipeline 90.7% funded. Clearly an overexposure to CRE loans caused its demise. The FDIC has slowed down the bank failure process. Only 25 in 2008, 140 in 2009, 157 in 2010, 92 in 2011, 51 in 2012 and only 22 so far in 2013. That's a total of 487 bank failures, with more to come. My ongoing prediction has been that at least 500 failures would occur before the Great Credit Crunch comes to an end. An ignored victim of the Great Credit Crunch has been Main Street USA. We see a higher cost of living as the costs of home and health insurance rise, while family incomes slip. Even with a five-year U.S. Treasury yield up to 1.6%, most big banks offer savers only 0.8%. The big banks have also raised rates on loans to small businesses. The best rate you can get on a credit card is about 12%. Explain that, given a 0% federal funds rate. At the time of publication the author held no positions in any of the stocks mentioned. Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage. Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.
The IRS announced Thursday that the annual contribution limit for 401(k)s will remain unchanged at $17,500 for 2014, but it’s not likely to affect participants’ contributing behavior. The son-to-be-released Mercer Workplace Survey found that the average participant believes the deferral limit is $8,532, almost half the actual limit. That gives them the dangerous perception that they’re close to the maximum contribution when they’re actually far from it. Mercer found that respondents expect to contribute just under $7,500 to their 401(k) plan in 2014. “Plan sponsors need to do a better job of communicating the total opportunity employees have when contributing to their 401(k) plan,” Dave Tolve, U.S. leader of Mercer’s defined contribution administration business, told ThinkAdvisor on Monday. “When you start to dig into it further and start to think about the different demographics, it’s important for plan sponsors to communicate specific to their different employee demographics.” Tolve blamed automatic features for at least some of the problem. “Automatic enrollment is pretty pervasive in 401(k) plans today. It’s great for getting employees to start contributing, but it often leads to inertia where many employees say, ‘This is great. I’m enrolled in my 401(k) and I don’t need to do any more.’” Tolve referred to past Mercer research that shows people who contribute at the default level tend to contribute less than people who actively make a decision to contribute. “Automatic enrollment has its place,” he said, “but it’s important to communicate to employees that there’s a lot more room to contribute beyond the default.” Automatic escalation isn’t a perfect solution, either. “It’s a great feature, but it alone is not enough," he said. "A lot of plans will start someone at 3% and increase by 1% per year. That’s better than that employee not enrolling at all, but there’s an additional step that a lot of plan sponsors ignore, and that’s letting them know that there’s a much greater opportunity in 401(k) plans and they should be saving more.” Another contributing factor is sponsors overemphasizing the company match as a target deferral rate rather than encouraging them to contribute as much as they can, regardless of the level their employer will match, Tolve said. Tolve acknowledged that for some participants, saving the maximum allowable contribution just isn’t realistic. “Someone who makes $30,000 a year, it might not be feasible to contribute $17,500, but it would benefit higher-paid employees for plan sponsors to communicate to them the much greater opportunity to contribute to their plans.” There was little difference in expected contributions by age group. The 18 to 34 age group anticipate contributing $7,535; 35- to 49-year-olds said they would contribute $7,667, and 50- to 64-year-olds expect to contribute just $6,673. “It’s surprising to see among older employees, especially among those over 50 who can add in the catch-up contributions as well,” Tolve said. Another drawback to small contributions, Mercer noted, was that participants aren’t taking advantage of the tax efficiency 401(k) plans provide. More than a third of respondents said they would increase the contributions they made in the last year if they could, even though most respondents are saving in other plans as well as their 401(k). “Our historical survey shows us that people who work with financial advisors have much higher levels of confidence in their ability to retire when they want to, their ability to maintain their lifestyle in retirement and their ability to leave money for their heirs,” Mercer said. --- Check out 4 Things for Fiduciaries to Consider With IRA Rollovers on ThinkAdvisor.
There are dramatic differences of opinion in which way the economy is truly headed. This leads to many investors being skeptical about potential investments. The good news for the company discussed in this article is that it doesn't matter what happens throughout the broader economy. Leading by example
Dollar General (NYSE: DG ) is the largest discount retailer in the United States when measured by store count -- currently 10,866. More importantly, Dollar General opened 375 new stores in the first half of the year while only closing 15 locations. This is telling. In the current economic environment, with a cautious consumer negatively impacting sales, many retailers are looking toward divestments as a way to cut costs and grow the bottom line. It's extremely rare to see a retailer open this many more stores than it closes. The point here is that Dollar General is clearly confident in its future potential, and this makes sense. If the economy recovers, Dollar General will still attract low-income, middle-income, and fixed-income consumers. If the economy suffers, then Dollar General might attract even more consumers, especially middle-income consumers who are looking for better values than where they currently shop. Dollar General recently noted that the 2% payroll tax increase, as well as government cuts over the next several years, could impact results, but this is likely more about Dollar General hedging its own potential. If you look at this from a logical perspective, people need to shop for goods, especially consumables. That being the case, consumers who are required to budget more than in the past are likely to opt for a dollar store to shop for those consumables. And Dollar General is looking to grow in the consumables area since it's seeing higher demand for consumables than in its other product areas. While consumables have lower margins, this increased demand should help the top line. A glance behind and a look ahead
In addition to Dollar General opening 375 new stores in the first half of the year, it also remodeled and relocated 377 stores. By updating and moving under-performing stores, margins are likely to improve. To increase traffic, transaction amount, and sales per square foot, Dollar General has undertaken several initiatives: Optimize space in mature stores Improve merchandise in-stock levels Offer more coolers for refrigerated and frozen foods Add tobacco products Expand roll-out of beer and wine As far as traffic and transaction amount, these initiatives would lead to further improvement. In the second quarter, comps jumped 5.1% year-over-year, primarily due to improved increased traffic and increased average transaction amount. The shiniest dollar
Many investors and analysts like to debate which dollar store offers the best investment opportunity. The truth is that Dollar General, Dollar Tree Stores (NASDAQ: DLTR ) , and Family Dollar Stores (NYSE: FDO ) are all likely to be quality long-term investments. All three companies benefited from the Great Recession, when consumers became more value-conscious. These consumers are likely to remain loyal to the dollar stores, even with the upcoming threat of Wal-Mart's small-store roll-out. Put simply, people don't like change unless it's necessary. While Wal-Mart's small-box stores have the potential to steal market share away from neighboring dollar stores, it's too early to consider these stores to be a considerable threat. Getting back to dollar-store comparisons, let's take a look at top-line performance for the three aforementioned companies over the past five years: 
Dollar Tree revenue trailing-12 months data by YCharts And bottom-line performance over the past five years: 
Dollar Tree EPS diluted trailing-12 months data by YCharts Though these three companies tend to perform similarly, Dollar General looks impressive. It's also trading at 15 times forward earnings, versus 17 and 18 times earnings for Dollar Tree and Family Dollar, respectively. However, some other key metrics favor Dollar Tree: Net Margin ROE Dividend Yield Debt-to-Equity Ratio | Dollar General | 5.90% | 19.73% | N/A | 0.55 | | Dollar Tree | 8.35% | 38.35% | N/A | 0.15 | | Family Dollar | 4.12% | 29.81% | 1.40% | 0.48 | Dollar Tree turns the most revenue and investor dollars into profit, and its debt management is superior to Dollar General and Family Dollar. However, this isn't to say that any of these companies have debt concerns. They all generate enough cash to cover debt obligations. And Family Dollar's halfway decent yield is a bonus if you're looking for dividend payments. All of that said, Dollar General is still solid across the board. Checkout
If you're looking for an investment in a company that's capable of growing in all economic environments, consider Dollar General, or one of its peers. The only concerns for Dollar General are higher demand for lower-margin products (consumables) and Wal-Mart's roll-out of small-box stores, which are specifically designed to steal market share from the dollar stores. Most Dollar General customers, however, are likely to remain loyal. For Dollar General, as well as its peers, upside potential outweighs downside risk. Other high-potential investments
The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.
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