Saturday, July 20, 2013
Ben Bernanke spoke again this week...
The Federal Reserve Chairman testified before Congress on Wednesday. Once again, he said nothing new. Bernanke reiterated that the Fed would taper its bond purchases at the end of the year. But everything still depends on how the economy performs.
A few sound bites from his testimony...
"With unemployment still high and declining only gradually, and with inflation running below the Committee's longer-run objective [of 2%]," he said, "a highly accommodative monetary policy will remain appropriate for the foreseeable future."
"We anticipated that it would be appropriate to begin to moderate the monthly pace of [bond] purchases later this year," Bernanke said. He said the plan is not "a preset course."
The Fed's manipulation of the money supply has kept stocks in a bull market since 2009. Its actions have boosted stocks and bonds. (Never mind that the U.S. government essentially forced its own citizens out of cash and into riskier assets.)
Now the Fed's monetary experiment is getting long in the tooth... It has shown its hand. And we all know how it will end. We're just not sure when.
Predicting this market is a fool's game. We enjoyed the recent comments from billionaire trader Stanley Druckenmiller. Druckenmiller used to work with legendary investor George Soros before founding his own firm, Duquesne Capital. And he recently spoke out about "fighting the Fed"...
We agree with Druckenmiller. All we know is that an unprecedented amount of money has been pumped into the economy. In the meantime, we'll continue holding our higher-quality positions and minding our trailing stops.
The Fed is targeting 7% unemployment. It currently sits at 7.6% (down from a high of 9.6% in 2010). But many folks question where those jobs are, including Mort Zuckerman, chairman and editor in chief of U.S. News & World Report.
Zuckerman recently wrote an op-ed in the Wall Street Journal titled "A Jobless Recovery is a Phony Recovery." Here's an excerpt from his piece...
When the future is uncertain, entrepreneurs and businesses pull back. The U.S. Chamber of Commerce recently surveyed small businesses to see how they're reacting to the news. According to the report...
One of the best ways to protect yourself – and profit – through any economic environment is to own shares of high-quality companies that pay large (and often increasing) dividends.
The world's largest asset manager, BlackRock, agrees this is a winning strategy. It just released a report showing the benefit of owning these types of companies...
In his 12% Letter newsletter, Dan Ferris calls these businesses World Dominating Dividend Growers (or "WDDGs"). But the market's rally has sent Dan's WDDG stocks out of buy range, and for good reason. Buying world-class companies at good prices is one of the best – and safest – ways to get rich in the stock market.
But our colleague Frank Curzio says that if you only focus on blue-chip companies, you'll miss out on a large group of elite, small-cap dividend-payers that boast many of the same characteristics as the WDDGs.
These small-cap companies have great brand names... strong competitive advantages... steady cash flows... and impressive track records of growing their dividends. And better still, they're cheaper than most blue-chip dividend-payers.
Over the past seven months, Frank has added three of these companies to his Small Stock Specialist portfolio. They're already up an average of 11%. And in the July issue, published earlier this week, he added another elite, small-cap dividend-payer to the portfolio.
Frank believes this company could double over the next seven years... And thanks to its growing dividend and the power of compounding, your returns could be much, much more than that over the next decade or two.
Learn how to gain access to Frank's latest pick – and get started with a risk-free subscription to Small Stock Specialist – by clicking here.
Date Range:7/11/2013 to 7/18/2013
Date Range:7/11/2013 to 7/18/2013