Assuming most everyone in the United States had a nice Thanksgiving holiday weekend, now it's back to business as usual for Wall Street, the business of making money. The week ahead is packed with fresh data for investors to digest beginning with the release this morning of Construction Spending for October (+0.8% versus the +0.3% consensus) and the ISM Index for November (57.3 versus 55.5), the highest reading since November 2011.
Bond prices fell on these two reports with the 10-year Treasury yield rising to 2.80%. Stocks initially sold off, the idea once again being that the Fed will move up its schedule to taper QE. Don't count on it. U.S. consumers spent an estimated $57.4 billion during the Thanksgiving weekend, down 2.7% from last year, the National Retail Federation has estimated. The U.S. consumer accounts for two-thirds of GDP growth.Read
Investors are giving a big year-end thumbs up to the latest round of economic news, which is increasing confidence that financial assets deserve higher valuations even after a 25% run up for the S&P 500 this year. Stronger PMI, ISM and GDP figures are drawing cash out of money markets and into 'risk-on' assets in a manner that hasn't been seen since late 2000 and late 2007.
That statement alone probably raises some eyebrows, knowing full well how ugly the treatment of stock portfolios was in 2001 and 2008. But the market isn't dealing with the same kind of bubble conditions that marked the dot-com era, or the real estate hype that preceded the nasty downturns that followed when those bubbles popped. This market remains fairly well unloved by Main Street investors and underperforming hedge funds that have held out in cautious portfolios, fearful of the unknowns surrounding quantitative easing where there is no historical precedent.
In this month's issue of Cash Machine, I'll explain why I expect further upside ahead for stocks, but also why further inflation is also in the cards. I'll update you on our holdings and on my latest Watch List, and I'll answer several subscriber questions in my latest Ask Bryan section.Read
The compare and contrast feature includes a table of guaranteed yields reflecting current yields as a way to compare risk-free investments versus recommendations within the Cash Machine service. Having a handle on what Jumbo Certificates of Deposit, Treasury Bills, Treasury Notes, Ginnie Maes and Money Markets are paying provides important reference points for investors stepping outside these traditional and ultra-safe investments.
Yields determined as of 11/11/13.
I'm always looking for new investment opportunities to add to our portfolios. Here's what I'm researching right now. I'll let you know if any of these companies meet my buy criteria.
"Four years ago, I found myself abruptly and permanently disabled. I probably had about ten years of lucrative working life taken from me, but my pension was not yet where I needed it to be for retirement and I still had two of my five children to send to college. I could not longer afford a roller coaster market, so I became a high-yield investor."
— H. Floch, North Carolina
For more than five years, Bryan has brought his expertise on high-yielding investments to the Cash Machine service. His main goal is to help income investors craft a portfolio that will pay a reliable income even during the worst of times. Read