Month: September 2013

By WallStreetDaily.com

We’re just out of the gate of a new month and, like always in the Dividends & Income Daily world, that means it’s time to roll out another round of Dividend Stock Wars.

This time, I’m putting Pfizer (PFE) up against Bristol-Myers Squibb (BMY).

~Round 1: Simple Business

The rule is easy: The simpler the business, the better the investment.

This holds especially true for income investing. The fewer the moving parts, the fewer the risks – and the more likely you’ll be getting that dividend next quarter (and the next, and the next).

Unfortunately, Big Pharma is anything but simple.

Click here to continue reading…

The post Dividend Drug Wars: Pfizer vs. Bristol-Myers Squibb appeared first on Wall Street Daily.

Article By WallStreetDaily.com

Original Article: Dividend Drug Wars: Pfizer vs. Bristol-Myers Squibb

By www.CentralBankNews.info     South Korea’s central bank held its base rate steady at 2.5 percent, as widely expected, saying the country’s moderate economic growth is continuing with exports and consumption improving while inflation should remain low despite the recent rise in oil prices.
    The Bank of Korea (BOK), which cut its rate in May, repeated that it expects the economy’s negative output gap to remain for a considerable time though it will gradually narrow.
    Despite the weak global economy, Korea is starting to pick up with second quarter Gross Domestic Product recording its strongest quarterly growth rate in nine quarters. GDP rose 1.1 percent from the first quarter for annual growth of 2.3 percent, boosted by government spending.
    Economists expect the BOK to maintain its rate through the first half of next year before its starts raising rates. In July the BOK raised its 2013 growth forecast to 2.8 percent.
    The central bank noted that the scale of increases in the number of persons employed has expanded in line with increases in the 50-and-above age group and the service sector.
    But while the BOK expects the global economy to sustain its “modest recovery,” the bank said there were still downside risks, pointing to the uncertainties surrounding the scale of tapering of Quantitative Easing by the U.S. Federal Reserve, fiscal consolidation in major countries, financial instability in some emerging countries and geopolitical risks in the Middle East.

    South Korea’s headline inflation eased to 1.3 percent in August from 1.4 percent in July, and the BOK has forecast average inflation this year of 1.7 percent. It targets inflation of 2.5-3.5 percent.
    Following the launch of the Bank of Japan’s new phase of monetary easing in April, the won rose over 10 percent against the Japanese yen by mid-May, raising alarm bells in Korea over the competitiveness of its exporters. 
    But it fell back from late May through mid-June, in line with most emerging market currencies, before it started rising again as investors returned, trading at 10.88 won to the Japanese yen today, up from 12.26 at the start of the year, a gain of 11 percent.
    “In the domestic financial markets, despite the heightened volatility in the international financial markets and the instabilities in the financial and foreign exchange markets of some emerging economies, stock prices have risen and the Korean won has appreciated, due mainly to the net inflows of foreigners’ stock investment funds,” the BOK said.

    www.CentralBankNews.info

USDJPY remains in uptrend from 95.81, the price action from 100.22 could be treated as consolidation of the uptrend. Another rise could be expected after consolidation, and next target would be at 101.50 area. Initial support is at 98.75, and the key support is located at the lower line of the price channel on 4-hour chart, only a clear break below the channel support could signal completion of the uptrend.

Provided by ForexCycle.com

By www.CentralBankNews.info     New Zealand’s central bank held its benchmark Overnight Cash Rate (OCR) steady at 2.5 percent and repeated that it expects to maintain the rate through the rest of the year but that “OCR increases will likely be required next year.”
    The Reserve Bank of New Zealand (RBNZ), which has held its rate steady since March 2011, repeated that “the extent and timing of the rise in policy rates will depend largely on the degree to which the momentum in the housing market and construction sector spills over into broader demand and inflation pressures.”
    The policy guidance by the RBNZ is slightly more specific than in July when it said a “removal of monetary stimulus will likely be needed in the future,” omitting any mention of when it may tighten.
    Despite the current low level of inflation, partly due to the impact of the strong New Zealand dollar and stiff domestic and international competition, the RBNZ expects inflation to start accelerating toward the midpoint of its 1-3 percent target range next year as economic growth strengthens.
    In addition, house prices continue to rise rapidly in Auckland and Canterbury and the central bank repeated that it “does not want to see financial or price stability compromised by continued high house price inflation.” New rules that restrict the size of loans on residential mortgages that come into effect next month are expected to help slow these house price increases.

    New Zealand’s inflation rate eased to 0.7 percent in the second quarter from 0.9 percent in the first. 
    The central bank also repeated that the exchange rate of its dollar, known as the kiwi, remains high despite a fall on a trade-weighted basis since May and a lower rate would help the country’s exports.
    The kiwi rose steadily against the U.S. dollar from March 2009 and hit US$ 0.83 at the start of this year from $0.49 four years ago. But since early May it had declined, hitting $0.77 at the end of August. But this month it has bounced back, trading around $ 0.81 today.
    New Zealand’s economy slowed in the first quarter with Gross Domestic Product up by 0.3 percent from the previous quarter for annual growth of 2.4 percent, down from 3.2 percent in the fourth.
    But Graeme Wheeler, governor of the RBNZ, said growth was estimated to have increased by 3 percent in year to the September quarter, consumption was rising and reconstruction in Canterbury will be reinforced by a broader national recovery in construction, particularly in Auckland.  
    “This will support aggregate activity and start to ease the housing shortage,” Wheeler said.

    www.CentralBankNews.infowww.CentralBankNews.info

Source: Brian Sylvester of The Gold Report (9/11/13)

http://www.theaureport.com/pub/na/finding-low-risk-miners-in-todays-minefield-adrian-day

Adrian Day is finding that the glass is definitely half full these days. While the founder of Adrian Day Asset Management believes that volatility in precious metal stocks will continue, he also believes that gold’s extreme bottom is behind us and macroeconomic and geopolitical conditions will continue to support gold. In this interview with The Gold Report, Day is downright exuberant on gold stocks and discusses royalty companies, prospect generators, majors and juniors that can mitigate risk.

The Gold Report: Gold had a somewhat remarkable August. What’s your view? Is the bottom behind us?

Adrian Day: I think it’s behind us. The principal reason gold has rallied is the sense that the decline was overdone. We got an extreme bottom, and then gold started to slowly move back up. All Federal Reserve Chairman Ben Bernanke ever said was that there might be a cutback in bond buying later in the year if the economy continued to improve. That’s a rather mild statement, simply saying that additional bond buying might be reduced; nobody is talking about actually reducing the Fed’s balance sheet.

During the last few weeks, gold has really responded to the situation in Syria. Gold declined when the British parliament voted down joining the U.S. strike effort. When the U.S. Foreign Relations Committee approved action, gold went up.

The third factor is short covering. The shorts both in gold and in gold stocks reached record high levels at the end of June and beginning of July. There’s been a significant decline in the shorts since then, from 130,000 short future contracts held by speculators to about 71,000 in the last month, but that is still a very high level of shorts historically.

TGR: You take reasonably high net-worth clients and invest them in individually managed accounts, many of which are anchored by gold assets. How are you managing the risk inherent in gold equities?

AD: If you’re involved in gold, it’s going to be volatile. There is no way around that.

We manage the risk by buying companies that are low risk. For the senior companies, that might mean diverse assets around the world not exposed to one political jurisdiction, or it might mean more royalty companies, which have a low-risk business model by definition and strong balance sheets. We buy companies that don’t have any significant negatives. In the junior space, I’ve always thought that certain well-picked juniors with good balance sheets can be low-risk investments even if the stock price is volatile.

TGR: How does the Fed’s monetary policy factor into your management of gold accounts?

AD: The comments from the Fed that caused gold to go down gave us the opportunity to buy quality gold stocks at much lower prices. The reaction to Fed comments was overdone. The most I’ve heard any analyst mention is Fed bond buying going from $85 billion ($85B) a month to $65B a month. That is still $65B of additional money creation every month, an enormous amount of stimulus for the economy.

TGR: You talked earlier about investing in low-risk or lower-risk gold assets. You’ve had a lot of investment success with precious metal royalty companies. Are these companies still worth the premium investors have to pay for them?

AD: I’d say yes. A company like Franco-Nevada Corp. (FNV:TSX; FNV:NYSE), which with a $6.5B market cap is the largest royalty company, has a very low-risk business model. The royalty companies make an investment, and once they do they’re not responsible for anything going wrong. Just think of all the things that have gone wrong in the mining business over the last few years. When the capital expenditure (capex) on Barrick Gold Corp.’s (ABX:TSE; ABX:NYSE) Pascua Lama went from $2.5B to $8.5B, Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX), which owns a royalty on Pascua Lama, didn’t have to pony up a penny. It’s not responsible for all the court hearings and the capex increases, the additional taxes levied by the local government, the environmental protests, and so on. That’s the beauty of the business model. Essentially, you don’t have the risk of mining, and mining’s a very, very high-risk business.

Take a company like Franco-Nevada. It is the best of this type of company, with an 86% pre-tax margin. It’s got $900 million ($900M) in cash with an unused line of credit and no debt—a beautiful company. Is it worth paying the premium? I say yes.

Franco-Nevada’s major producing assets are all continuing to produce as expected. The company loses the revenue in gold going from $1,700 to $1,300/ounce, but none of its major producers, on which it holds royalties, are in any risk of closing or scaling back. In addition, Franco has lots of potential that is not factored into the company’s projections or the stock price. For example, Franco has an option to buy a royalty on Taseko Mines Ltd. (TKO:TSX; TGB:NYSE.MKT), whose New Prosperity mine has been severely challenged by environmental problems. Once Taseko gets the permits, Franco will buy the royalty. If it doesn’t get the permits, Franco won’t buy the royalty—there’s a lot of upside there.

A lot of senior companies are struggling. They’re closing mines, delaying projects; there are capex overruns and huge write-downs. A lot of juniors are also struggling because they don’t have the cash. A company like Franco, which has the cash, is in a beautiful position to invest in other companies that need the money and to get a royalty in return. It did this with Pretium Resources Inc. (PVG:TSX; PVG:NYSE) on the Valley of the Kings and with Midas Gold Corp. (MAX:TSX) on its Golden Meadows property. Those are small royalties, but they are two very low-cost royalties on good projects.

TGR: You mentioned Royal Gold, which was scheduled to start receiving cash from Mt. Milligan in northern British Columbia. Once it’s operating at capacity, Royal Gold was supposed to be making roughly $100M a year in cash flow from Mt. Milligan. Where’s that asset right now?

AD: Mt. Milligan is one of the reasons that Royal Gold stock declined the way it did. The stock was over $100/share a year ago and is now at around $55/share. Right now, it’s a reasonable value based only on its existing projects. If you think of all of the upside that it has—and the upside comes from the very assets that caused the stock price to go down—then Royal is very inexpensive, in my view. The $100M a year from Mt. Milligan, by the way, is at today’s gold price. At $1,500/ounce gold, it would be over $140M a year, or north of $2 per share.

Royal Gold had a series of mines that had problems and caused the company to have stock problems. As these things are fixed, Royal Gold will have a lot more leverage on the upside in the near term than Franco does.

TGR: Do you see any value left in the gold and silver royalty space?

AD: Royal Gold is definitely a good value. It’s selling at 20 times free cash flow, but these stocks tend to be very high priced. If you add Mt. Milligan, which will be operating next year, you’re probably looking at 10 times its forecast cash flow, which is pretty cheap for this type of company.

I also think there’s a lot of value in some of the smaller royalty companies or companies that are morphing into royalty companies. Virginia Mines Inc. (VGQ:TSX) is one of my long-term favorite companies. It is still essentially an exploration company. It has used the prospect-generator model for many years, meaning it generates prospects and brings in joint venture partners, which is a low-risk exploration model. Then Virginia discovered the Eleonore deposit that it sold to Goldcorp Inc. (G:TSX; GG:NYSE), which is now building that mine. Eleonore will be producing in the last quarter of 2014. That’s going to change Virginia from a pure exploration company to much more of a royalty model because for Virginia this means anywhere from $25–35M a year, for 17 years, in cash flow.

That’s a fairly wide range, but this is a complicated royalty where the maximum royalty doesn’t kick in until about the third full year of production. As the aggregate production increases, the royalty moves up and revenue increases. If you look at the net present value (NPV) of the Eleonore royalty, the discounted value of that future cash flow stream, you’ll see that it’s worth over $300M. That is the entire market cap of Virginia, so everything else you’re getting for free. Virginia has $41M in cash. It has other deposits that are fairly advanced, including a base metal project called Coulon, which is continuing to advance. Most of its projects are gold, but not all of them.

TGR: What do you make of the deal Virginia just signed with Altius Minerals Corp. (ALS:TSX.V) to explore the Labrador Trough, which is famous for its iron ore deposits?

AD: It’s a positive, but it’s not in the immediate term. The project puts together two very entrepreneurial, very strong companies, both of which have strong balance sheets, good exploration teams and excellent reputations. I think we may likely see more of these deals with Altius.

TGR: Does Goldcorp ever get to the point where it says, let’s just buy this project instead of paying out the royalty?

AD: Yes. Virginia could sell that royalty in a heartbeat. A royalty objectively is worth more to the operator of the mine than it is to a third-party royalty company. Will it happen? I think people know full well that Virginia has a very strong and tight shareholder base. The likelihood is that a deal wouldn’t happen unless it was a friendly deal. It’s really a matter of Virginia’s management deciding what makes more sense. I’m sure if it got a great offer it would sell it and if it doesn’t get a great offer it won’t sell it. Virginia doesn’t need to sell it.

TGR: Is there further value in the royalty space beyond those two names?

AD: Callinan Royalties Corp. (CAA:TSX.V) is one of the smaller ones. It is a roughly $90M market-cap company. It’s unusual in the royalty space in that it has a good dividend, 4.5%. Callinan is trading at only eight times earnings. The company does have a lawsuit going on with Hudbay Minerals Inc. (HBM:TSX; HBM:NYSE), but Callinan is a great company and has great management. It was set up by Roland Butler, who was one of the founders with Brian Dalton of Altius. The two founded and built Altius over the years and then when Altius got to a certain stage, I think Roland wanted to get back to his roots as an explorationist, rather than be in the deal-making business. Callinan has no debt and a 4.5% dividend yield. It offers lots of upside.

The other one I like a lot is Gold Royalties Corp. (GRO:TSX.V), which is a tiny company with just a $10M market cap. It’s a great company, but some years off from getting to the size that is needed in this business.

TGR: Any other companies?

AD: We shouldn’t forget that Altius, although it’s not in the gold space primarily, has some gold projects and its progression is very similar in many ways to Virginia’s. It has a royalty on Voisey’s Bay, which pays all of its overhead. Altius also has a royalty on the Alderon Iron Ore Corp.’s (ADV:TSX; AXX:NYSE.MKT) Kami project in the Labrador Trough. If that comes on in 2016, which is expected, at $1.20 iron ore that generates $30M a year to Altius for at least the 25 years.

TGR: We talked about gold royalties as one way of mitigating risk in the gold space. Certainly another way is the major producers, although you wouldn’t think that given their performance over the last couple of years. What are some names you’re bullish on in the majors’ space?

AD: Generally, I’m less favorable toward the major mining companies than I am toward the smaller miners or toward the royalty companies or the explorers. However, there are some good names. I like Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE), for example. Yamana is a company that has grown larger by acquisition, but has also grown by using cash flow to make the acquisitions. It hasn’t gotten ahead of itself by taking on huge amounts of debt or grossly overpaying. It has the lowest cash costs among all of the major miners. It’s politically safe, in South America and Chile, Mexico, Brazil and Argentina, which isn’t the most unsafe country. It’s got a pretty good pipeline of projects. This year Yamana produced about 1.1 million ounces (1.1 Moz) and is looking to produce 1.7 Moz by the end of next year as it develops some of its existing projects.

New Gold Inc. (NGD:TSX; NGD:NYSE.MKT) is an interesting company, as well. Randall Oliphant, the ex-Barrick CEO, is the executive chair, and Pierre Lassonde is on the board. New Gold has four projects producing in Canada, Mexico, U.S. and Australia. By 2018 New Gold will probably have doubled its production. With low cash costs and a good balance sheet, New Gold is attractive.

TGR: What did you make of the takeover of Rainy River?

AD: That was a good deal. New Gold needed a nearer-term project. I don’t think it overpaid. Rainy River is a project that it can probably build and get into production within two years.

TGR: Any other majors you want to talk about?

AD: Agnico-Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) is a great company and is very well run. It has very conservative management and a great balance sheet. I think that it is quite inexpensive right now.

TGR: What are some of the smaller-cap companies that you are bullish on?

AD: I like some of the joint-venture type companies. One I like a lot is Almaden Minerals Ltd. (AMM:TSX; AAU:NYSE), which is essentially a prospect generator, although it has decided to keep 100% of the Ixtaca property, in Mexico. Ixtaca is large and relatively low grade. It’s going to take a long time to build the ounces and develop the project. Every round of drilling has simply built the deposit.

TGR: Is Ixtaca a company-maker asset?

AD: Ixtaca is definitely a company maker. I suspect that Ixtaca is going to get to a certain size soon when one of the large companies operating in Mexico, it could be Newmont Mining Corp. (NEM:NYSE), for example, will decide to buy it. I don’t believe that Almaden is going to build a property itself. But the project will reach a certain size where Almaden will be paid a multiple of its market cap for the project. Almaden has a good balance sheet, about $17M in cash plus about $2M in gold bullion, plus maybe another $1–1.5M of shares in small companies. The company is well financed and has good people.

TGR: What about another name in that space?

AD: Midland Exploration Inc. (MD:TSX.V): It’s located in Québec and is another prospect generator.

TGR: Midland’s also in the Labrador Trough now. What do you make of that?

AD: It’s a continuation of the business plan of generating projects and then looking for joint-venture partners to bring in. Midland has a low spend rate. It’s got about $4M in cash, so it’s going to be around.

The thing about a lot of the joint-venture companies is that there’s not necessarily any trigger to make the stock price go up. We’re not depending on one thing in the near term to make them go up. I think they’re just great companies that are very cheap.

TGR: Do you have another company you would like to talk about?

AD: One that we’ve been looking at is Pretium, which owns the Brucejack and the Snowfield projects. Brucejack has the very rich Valley of the Kings deposit. Snowfield is a very large but relatively low-grade project. The real interest for Pretium is Brucejack and particularly the Valley of the Kings zone, which had some astonishingly high grades. It’s a very nuggety deposit, however, so the company is undertaking a 10,000-tonne bulk sample, which will be released before the end of the year. Assays released so far have shown very good overall grades, which is what we want. If the bulk sample confirms the grades that we’ve seen, then Pretium could move a lot higher, but that is a long way off.

TGR: Any other company that you would like to mention?

AD: I should mention Reservoir Minerals Inc. (RMC:TSX.V). Although it has several gold properties, its big project is copper, a joint venture with Freeport McMoRan Copper & Gold Inc. (FCX:NYSE) in Serbia. The deposit is just getting bigger and bigger. There is a possibility that Freeport will decide to make an offer on Reservoir.

TGR: Do you have any parting words about the space to leave with us?

AD: The reason to be positive on gold right now is, first, I think gold is cheap. The selloff was grossly overdone and it wasn’t only the possibility of the Fed cutting back on stimulus, but at the same time we had concerns about China’s economy. I think both of those concerns had been mitigated to a large extent. China’s economy, looking at the latest manufacturing statistics, seems to have stabilized. Growth at 7.25% with low inflation is still pretty good growth and still translates into ongoing demand for gold from China.

I feel very positive on gold. If the Fed tapers less than expected, that should be seen as a major positive for gold. Even though there has been a mining stock rally, on a historical basis these stocks are just very cheap. On any metric you care to look at: price to earnings, price to cash flow, price to ounces in the ground, price relative to gold, price relative to ounces on production, etc., the major mining companies today are as cheap as they have ever been throughout this entire bull market other than for a few weeks at the end of 2008. In 2009 the gold stocks rebounded dramatically. I feel very positive, not just on gold, but also that the gold stocks are simply not reflecting the positives in gold.

TGR: You seem to be more hopeful than you have been in recent interviews.

AD: Let’s not say hopeful. Let’s say positive, exuberant. I’m very positive about the gold price and at the same time the gold stocks are just extremely oversold in my view, the good ones and the bad ones. I feel very positive about the gold stocks right now.

TGR: Thanks for your insights, Adrian.

Adrian Day, London born and a graduate of the London School of Economics, heads the eponymous money management firm Adrian Day Asset Management (www.adriandayassetmanagement.com; 410-224-2037), where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the new EuroPacific Gold Fund. His latest book is Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks.

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DISCLOSURE:

1) Brian Sylvester conducted this interview for The Gold Report and provides services to The Gold Report as an employee or as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Gold Report: Franco-Nevada Corp., Royal Gold Inc., Pretium Resources Inc., Virginia Mines Inc., Almaden Minerals Ltd., Goldcorp Inc. and Midland Exploration Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Adrian Day: I or my family own shares of the following companies mentioned in this interview: Franco-Nevada Corp., Royal Gold Inc., Altius Mineral Corp., Virginia Mines Inc. and Reservoir Minerals Inc. Clients of Adrian Day Asset Management own Franco-Nevada Corp., Royal Gold Inc., Pretium Resources Inc., Virginia Mines Inc., Altius Mineral Corp., Callinan Royalty Corp., Gold Royalties Corp., Yamana Gold Inc., New Gold Inc., Agnico-Eagle Mines Ltd., Almaden Minerals Ltd., Midland Exploration Inc. and Reservoir Minerals Inc. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.

5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.

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By The Sizemore Letter

We all knew that the Fed’s quantitative easing programs wouldn’t last forever, yet when the Fed first started to discuss the possibility of tapering in May, it took the market by surprise.

As a result, income investments had a less-than-spectacular summer. The price of the 10-year Treasury note slid by more than 12%, and the prices of “bond substitutes” such as utilities and certain classes of REITs fell by significantly more.

It’s frustrating to see a decade’s worth of income disappear in a matter of two months due to capital losses. And the prices of income-paying investments will probably stay volatile until the Fed clarifies its intentions on quantitative easing.

We might get some concrete guidance from Bernanke as soon as this month. But regardless of what the Fed does, we all have retirements to plan for. Today, I’m going to look at four asset classes that all investors need in their retirement portfolios.

Dividend Stocks

Dividend stocks have become almost trendy in recent years, and it’s easy enough to see why. Two major bear markets in less than a decade destroyed the cult of equities and the belief that, given a decent time horizon, stock prices “always” go up.

Regardless of whether prices “always” go up, you still need income to pay your bills. And dividend stocks can be a big contributor to that income.

There are two basic approaches you take here. You can go for stocks with high yields, such as utilities and slower-growth consumer staples. Or, you can focus on stocks with a modest current yield but a high dividend growth rate. For a stock you intend to hold for a while, the high-growth stock can eventually give you a higher yield on cost than the current high yields.

I wrote a short piece in July that broke down the numbers for some of my favorite income stocks. In 2003, Johnson & Johnson (JNJ) and Walmart (WMT) yielded 1.5% and 0.65% in dividends, respectively. A million dollars invested in each would have paid out $15,296 and $6,538. That stacks up pretty poorly in comparison to the $40,000 you could have received in bond interest by investing in Treasuries.

But let’s fast-forward 10 years. Those original million-dollar investments in Johnson & Johnson and Walmart would be paying you $49,244 and $34,144, respectively, in 2013. Walmart’s total cash payout is still a little lower than the payout from the Treasury note, though it rose by more than a factor of 5 — and will likely keep rising at a blistering pace for the foreseeable future.

Bottom line: You need dividend growth stocks in your retirement portfolio. For a nice “fishing pond” of potential buys, check out the holdings of the Vanguard Dividend Appreciation ETF (VIG). Every holding has raised its dividend for a minimum of 10 consecutive years. Also, InvestorPlace’s Dependable Dividend Stocks have each improved their dividends for a minimum of 25 years.

Master Limited Partnerships

Along the same lines as dividend-paying stocks, we have master limited partnerships. MLPs are operating businesses that tend to be concentrated in the oil and gas sector. Like dividend-paying stocks, a large chunk of their total returns come from their cash distributions, but because MLPs are organized as partnerships rather than corporations, they avoid paying federal corporate income taxes.

In nutshell, this means they have 35% more cash at their disposal to distribute. And because many MLPs have large non-cash expenses, such as depreciation, those distributions often end up being tax-free for years at a time. Not bad.

A lot of investors are intimidated by MLPs, and they shouldn’t be. Yes, come tax time, you have to deal with a pesky K-1 form, and no, you can’t hold most MLPs in an IRA account without creating a potential tax nightmare. But most K-1 forms can be uploaded to mainstream tax programs like TurboTax, and if your CPA gripes about them or tries to charge you more to do your taxes … well, perhaps it’s time to find a new CPA.

And as for holding them in a non-IRA account, it’s hardly much of an administrative burden to open a regular brokerage account if you don’t have one.

If you’re bound and determined to hold MLPs in an IRA account, or if you are investing only a modest sum, you could always buy an MLP mutual fund or ETF product, such as the JPMorgan Alerian MLP ETN (AMJ). I use this security in client IRA accounts I manage. But where possible, I prefer to avoid the hefty 0.85% expense ratio and enjoy the favorable tax treatment of holding individual MLPs.

REITs

Next on the list are real estate investment trusts. Like MLPs, REITs are special entities that get preferential tax treatment. REITs avoid corporate-level taxation if they distribute at least 90% of their earnings. The dividends are taxable, and REITs can be held in an IRA account with no tax complications.

There are two types of REITs — mortgage REITs, which buy mortgage securities and related derivatives, and equity REITS, which buy real property ranging from apartments to warehouses and everything in between. I currently invest in both, but for long-term retirement funds I limit myself to equity REITs. Because of their high sensitivity to interest rates movements, I consider mortgage REITs highly speculative and appropriate only for more aggressive strategies.

What makes real estate such an excellent retirement holding? To start, it has a built-in inflation hedge. Assuming they are purchased at reasonable prices and in stable locations, a diversified portfolio of properties should, at a minimum, see their values rise with the overall price level. The same is true of rental income — it’s not often that landlords lower your rent.

Although I use them in certain ETF-only accounts I manage, I’m not the biggest fan of REIT ETFs because they tend to overweight a small handful of REITs that I do not consider particularly attractive.

Where possible, I prefer to buy individual REITs. And in long-term retirement accounts, I’m particularly fond of REITs that specialize in free-standing triple-net-lease properties — things like grocery stores and pharmacies. Two that I own personally — and hope to own for the rest of my life — are Realty Income (O) and National Retail Properties (NNN). Both have a long history of raising their dividends, and both skated through the 2008 meltdown with relatively minor scratches.

Bonds

I hate bonds. I really do. They are most vulnerable to higher-than-expected inflation, and they offer no opportunity for growth. Unless you intend to actively trade it, the yield you secure when you buy the bond is the yield you will get for its entire life.

But this stability is precisely what makes bonds a necessary evil, even in a low-yield world. Bonds play the role of portfolio stabilizer, and they can be used in a dynamic rebalancing strategy.

What do I mean by this? Let’s say your portfolio’s target allocation to bonds is 40% (That’s too high for my liking, but it’s considered the industry standard). If the stock market takes a short-term nosedive, you can sell off a portion your bonds and use the proceeds to buy stocks and rebalance. Likewise, if the market goes on a massive bull run, you can sell off some of your appreciated stock and buy bonds. The result is that you are constantly buying low and selling high.

Of course, this strategy works a lot better when bonds pay a respectable yield. Even after the recent taper scare, the 10-year Treasury still yields less than 3%.

My advice? If you need bonds as a portfolio stabilizer, buy individual bonds if possible and not bond funds. Bond funds are assumed to be perpetual, and returns will be terrible in a prolonged period of rising rates. But an individual bond held to maturity has no interest rate risk.

Also, try to stay shorter-term on the yield curve. If you believe yields are going higher, a bond with a shorter maturity will give you the opportunity to reinvest sooner and at a higher rate.

This article first appeared on InvestorPlace.

Charles Lewis Sizemore, CFA, is the editor of the Sizemore Investment Letter and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he was long AMJ, JNJ, NNN, O, VIG and WMT. Click here to learn about his top 5 global investing trends and get your copy of “The Top 5 Million Dollar Trends of 2013.”

This article first appeared on Sizemore Insights as 4 Asset Classes for Every Retirement Portfolio

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Article by Investazor.com

Apple Inc., as usual, released a new product for 2013. Actually this year there were two products released. Almost everybody expected the 5S to be made known, but there were rumors that a new and cheaper version of iPhone will be also released so that they will have a better leverage in competing with Samsung and others in this business.

The new iPhone 5S, top of the line model, looks identically  with iPhone 5, but it’s got a better camera, a faster processor and Apple added a fingerprint scanner for a faster unlock. For this model customers will have to pay (just as for the last iPhone 5, when it was released) $650, or $199 with contract. They are keeping the same pricing strategy as before. While a new model is released, the price for the older models drops with $100.

The second model released this year is iPhone 5C. Well…this phone is nothing of what we were expecting. It is not a cheaper version for the customers to buy, but most probably it is a cheaper model of the iPhone 5 for Apple Inc. to build. It has practically the same functions as the model released last year, but it is made of plastic and comes in different colors (green, yellow, blue, pink and white). The price for the iPhone 5C it is $550, or $99 with contract.

Apple’s strategy for this year is like always, to maintain the costs and raise their profits. The fact that they did not get on the market a cheaper version of iPhone might be a bet than could cost them some money, but we should wait for the sale results before throwing the rock.

Chart: AAPL, Daily

From the technical point of view, the price of Apple’s stocks was in an uptrend from July. After a short consolidation, today’s opening was with a negative gap that brought the price all the way back to 465$ from 500$ per share. It seems that the new releases did not get the investors trust and confidence. At this point we can say that this drop could be only a corrective move for the prior trend and a retest of the Double Bottom’s base line.

If the price will close, on a daily basis, under 466$ per share, there is a big possibility for the down move to continue all the way to a 0.618 Fibonacci retrace, at 436.67$. On the other hand a bounce from here could end up by covering the gap, or why not trigger a rally that would hit the Double Bottom’s target at 550$ per share.

The post What Happened to Apple? appeared first on investazor.com.

By www.CentralBankNews.info

London Gold Market Report
from Adrian Ash
BullionVault
Weds 11 Sept 08:25 EST

WHOLESALE bullion prices bounced on Wednesday from new 3-week lows as the US cancelled a Congressional vote on Syria, and traders pointed to next week’s expected “tapering” of quantitative easing by the Federal Reserve.

 Oil prices and other commodities also stemmed this week’s drop. World stock markets rose sharply.

 Trading volumes were “thin”, bullion dealers said, with one calling the markets “very quiet” but other reporting “some light physical interest” from Asian stockists as prices fell.

 “Syria for now remains a lingering underlying bullish factor” for gold and silver,” says a note from Swiss refining and finance group MKS.

 “But with each passing day that will play a smaller component in propping the market up.”

 “For the time being at least,” agrees David Govett at brokers Marex, “the Syrian crisis is averted, [so] the ‘war premium’ has gone” from gold prices.

 “Now…most people are looking for some sort of quantitative-easing tapering” at next week’s US Fed meeting.

 Noting that gold “started to decline with the declining probability of a military intervention” in Syria, analysts at investment bank Goldman Sachs now say “The September FOMC meeting, where our economists expect a tapering of QE3, could prove the catalyst to push prices lower.”

Over the next 12 months, precious metals could drop a further 15%, Goldman Sachs says, advising its clients to go “underweight” the entire commodities complex.

 Fellow investment bank J.P.Morgan in contrast recommended going “overweight on commodities” last week, BusinessWeek notes, thanks to rising demand from China, plus better manufacturing data worldwide.

 “There’s ample room for fresh selling [of gold and silver] should Fed tapering of QE be confirmed,” said Swiss investment bank UBS analyst Joni Teves earlier this week.

 “Gold prices would probably fall to $1250 an ounce in the first move,” Teves told CNBC Tuesday. “But I certainly wouldn’t rule out another attempt below $1200 if…the Fed is more aggressive than the market is currently expecting.”

 Major government bonds bounced in price Wednesday morning, edging yields lower from recent multi-month highs.

 Ten-year UK gilt yields held above 3.0% however, and Sterling briefly spiked to $1.58 – its highest level since February – after new data showed a surprise fall in the UK jobless rate to 7.7%.

 The gold price in British Pounds touched a 4-week low of £860 per ounce, reversing almost half of gold’s July-August rally.

 Before raising UK interest rates from their all-time low of 0.5%, Bank of England governor Mark Carney has set “forward guidance” that unemployment must first fall to 7.0%.

 Average UK wages last month rose 1.0% from a year earlier, data showed today. Consumer price inflation was last pegged at 2.8% per year.

 Silver for UK investors today bounced from £14.49 per ounce, the lowest level in 3 weeks and more than 10% beneath end-August’s peak.

Adrian Ash

BullionVault

Gold price chart, no delay | Buy gold online

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich or Singapore for just 0.5% commission.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Canadian Dollar (Forex: USDCAD) is in bearish mode since Friday which means that move from 1.0243 was actually made only in three waves, so this rally is now part of a larger complex correction, either a flat or a triangle. For now we will focus on a triangle but need to see an evidence of a low around 1.0300 zone and rally back to 1.0468 to confirm idea of a contracting triangle.

USDCAD-Triangle

On the other hand, if pair will continue straight down in impulsive fashion toward 1.0250 then we will be looking for a flat correction in red wave B where pair can reach levels beneath 1.0240 and even around 1.0200 before bulls come back in view.

In either case both patterns are corrective and both suggests that USDCAD just stopped in larger temporary pause and that sooner or later pair will turn bullish for 1.0650 maybe even 1.0700.

USDCAD 4h Elliott Wave Analysis

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