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Investors Looking For Dividend Opportunities Need To Look Beyond Dividend Yield (BMO Capital Markets)
Brian Belski has a S&P 500 2013 price target of 1,575 that projects a 10 percent return for the year. And for investors looking to tap dividend growth themes, Belski recommends incorporating other factors in addition to dividend yield for instance cash levels and earnings growth. "Trends in these factors make dividend yields more believable."
In using their dividend growth screen Belski says his team screens the S&P 500 for 6 key things. 1) Dividend increases in each year in the last decade 2) Dividend yield greater than the S&P 500 3) Free cash flow yield that exceeds the dividend yield, ex-utilities 4) Modest EPS growth in each of the prior two completed years 5) Modest expected EPS growth in each of the next two years 6) Forward P/E multiple less than 20x. Some of the 26 Dividend Growth Theme Screen Stocks include Abbott Laboratories, Caterpillar, McDonald's, Lockheed Marting and Norfolk Southern Corp.
FINRA To Monitor Dark Pool Trading More Closely (The Wall Street Journal)
The Financial Industry Regulatory Authority (FINRA) is broadening its oversight of dark pool trading i.e. an electronic platform where institutional investors can trade hidden from the market.
"Richard Ketchum, chief executive of Financial Industry Regulatory Authority, said in an interview Tuesday that the regulator is expanding its oversight of the dark-trading venues, with an eye on whether orders placed in public exchanges are "trying to move prices or encourage sellers that may advance their trading in the dark market.
The regulator is also boosting its surveillance of high-speed trading and is increasingly looking at rapid-fire trading across exchanges, he said. "You're going to see more [enforcement] in those areas in 2013," Mr. Ketchum said."
The Stock Market Has Tracked The Population Of 35-39 Year-Olds For 112 Years (Business Insider)
Citi's Tobias Levkovich thinks the 'echo boom' i.e. the expectation that baby boomer's will have more children than the boomers is a bullish trend for stocks.
"The baby boom echo or children of the baby boomers are beginning to enter their savings years based on Bureau of Census data and are thus likely to buy stocks as a means to do so in order to build retirement nest eggs and saving for their children’s education.
…This group of savers would mirror their parents buying stocks approach of the 1980s after a paltry prior decade for equity markets. Thus, a poor previous 10-year record is not an argument for not buying shares since those losses were borne by an earlier generation and behavioral economics suggests that one who does not experience personal loss cannot internalize the feeling that would prevent action. Indeed, the past 112 years of market history implies that after a lousy decade for stocks, the future looks far brighter."
Jeff Volmer of Hyde Park Wealth Management says as investors continue to reel from the financial crisis and have lost faith in advisors, there are some protection strategies that investors can use.
First, he recommends individual equity positions and actively traded index funds that "allow you to set a sell stop, a predetermined price at which you will automatically sell an investment. The benefit of sell stops is that they can limit your losses in the event of a precipitous market selloff." Second, they can use put options which act as a great insurance policy and because they "rise in value when the underlying holding goes down".
Goldman Sachs's top 2013 income idea is to "recommend self-help stories that offer a 'social contract' to their shareholders; i.e., returns outside of capital appreciation, via a combination of dividend yields and accretive, share-reducing buybacks".
In that light they pick 23 stocks that should offer returns of 5 percent in 2013 through the social contract. The stock picks include Pfizer, JP Morgan, Lowe's Companies, Marathon Petroleum Corp, and Comcast.
Marc Faber publisher of The Gloom Boom & Doom Report said he expects gold to correct about 10 percent before rising. But he continues to own gold because he expects governments to continue to print money and wants gold as a hedge.
In terms of currencies he likes the U.S. dollar and Singapore dollar. In the beauty contest over the ugliest currency, the U.S. dollar is not winning. [but] I'd rather be in dollars at the present time than say, euros."
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