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Investment News Briefs

Even on the Brink of a Government Shutdown, Congress Still Doesn't Get it

At the risk of sounding trite, let me just say that "here we go again."

Overnight budget talks failed to lead to a federal budget agreement, and now we're just a few hours from the first U.S. government shutdown in 15 years. The shutdown could put 800,000 federal employees out of work, while creating a nightmare for U.S. taxpayers who are regular users of government services.

As bad as that all sounds, the shutdown threat isn't the worst thing I see here – not by a longshot.

The worst thing is that – with a $14.2 trillion national debt – the part of the budget the two sides are squabbling over is miniscule. Democrats have agreed to $34.5 billion in spending cuts, while the Republicans have agreed to $39 billion for the fiscal year that ends Sept. 30.

It's a rounding error.

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Three Investments to Consider for Your Retirement Portfolio

Americans used to ride a "three-lane highway" into retirement: a traditional pension, Social Security, and individual savings plans, like 401(k)s.

But the recent economic downturn packed a devastating punch to many 401(k) accounts, U.S. households have dipped into savings to make ends meet, and debt-laden federal, state and local governments will have trouble meeting pension and Social Security obligations.

The 2011 Retirement Confidence Survey released last week by the Employee Benefit Research Institute showed 27% of workers are "not at all confident" about their retirement, up 5% from a year ago.

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Special Report: How to Buy Silver

Forecasting prices for anything can be tricky. And a precious-metal commodity such as silver is no exception.

With gold holding the leash on its "lapdog" – silver – the performance of the so-called "yellow metal" holds the key to silver prices in the New Year.

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Economic Aftershocks of the Japan Earthquake 

The 8.9 magnitude earthquake and resulting tsunami that hit northeastern Japan today (Friday) had an immediate impact on financial markets all over the world. However, the effects of the damage and rebuilding will reverberate through the Japanese economy for months, if not years.

In the immediate aftermath of the earthquake, which struck in midafternoon, factories shut down, railways stopped running and roads, ports and airports closed. Markets remained open, but a lack of power and a disruption of the mobile networks curtailed trading after the temblor struck.

Some of Japan's biggest companies were affected:

  • Nissan Motor Co., Ltd. (PINK: NSANY) halted production at four factories in the area hit.
  • Toyota Motor Corporation (NYSE ADR: TM) closed two assembly plants and a parts factory.
  • And Sony Corporation (NYSE ADR: SNE) closed six factories.

"This is certainly the worst thing that can happen in Japan at the worst time," economist Nouriel Roubini told BloombergTelevision, noting that Japan's deficit is 10% of its gross domestic product (GDP) and repairing the damage from the quake will cost the country tens of billions, if not hundreds of billions of dollars.

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Investing in Cotton: With Prices at a New Record, Here's the Move Investors Should Make Now

Cotton prices reached an all-time record yesterday (Monday), due to continued fears that global supplies will far short of the soaring needs in China, which remains the world's biggest consumer and producer. Cotton for May delivery closed at a record $2.1414 a pound in New York, an increase of 1.44 cents, or 0.70%. It earlier […]

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Netflix Inc. (Nasdaq: NFLX): The Red Envelope Gets the Green Light From Investors

Netflix Inc. (Nasdaq: NFLX) stock is up more than 300% over the past year, making it a surprise leader in the technology sector and a media darling. And while it may be overvalued, it should continue to perform well throughout the year.

I've long respected Netflix's business model. In fact, I've been a customer for several years now. However, the company's stock has suddenly become very controversial, as many analysts and fund managers think it overpriced and overhyped.

That case is certainly there to be made, considering Netflix has a Price/Earnings (P/E) ratio of about 72.5 – compared to 19 for Apple Inc. (Nasdaq: AAPL).

But here's the deal: Netflix reported a blow-out fourth quarter after the market closed last Wednesday.

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Hot Stocks: Steve Jobs Health Concerns No Reason to Bail on Apple Inc. (Nasdaq: AAPL)

Apple Inc. (Nasdaq: AAPL) stock is set to plunge today (Tuesday) due to growing concerns about Chief Executive Officer Steve Jobs' health. But rather than retreat from the tech heavyweight, investors might be better served to load up as the stock pulls back.

No doubt, Steve Jobs represents the soul of Apple. He guides the company's general direction – driving its innovation and expanding its global profile. But even without Jobs, Apple is a strong fundamental company with a stockpile of cash, a rock solid product line and mainstream brand.

Jobs, a 55-year old cancer survivor, said yesterday (Monday) that he would take a medical leave of absence to focus on his health.

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2011 Manufacturing Outlook: Slow, but Steady Growth Could Win Profits for Investors

It's often said that a little bit goes a long way, and that will certainly be the case for U.S. manufacturing growth in 2011. Although most projections still call for slower improvement in the sector than in 2010, the estimates have been characterized as "less bad" than originally expected -and that could translate into increased profit prospects for investors.

The market gave evidence of that just last Tuesday (Jan. 4) when the major indexes shrugged off other concerns and moved nicely higher in response to a larger-than-expected 0.7% rise in November factory orders, which had been forecast to fall by 0.1% according to a Thomson-Reuters survey of economists. Orders excluding the volatile transportation sector also posted their biggest gain in eight months.

Analysts characterized the numbers as "pointing to underlying strength in manufacturing." That bodes well for the greater economy, since U.S. manufacturers employ nearly 12 million people, or 9% of America's work force, and add $1.6 trillion annually to the U.S. economy, roughly 11% of gross domestic product (GDP).

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Bond Investing: Inflation, Interest Rate Risk Weaken Corporate Bonds and TIPS

To cushion the recession's financial blow and safeguard against shaky global markets, investors over the past few years retreated from stocks and poured billions of dollars into bonds.

From January 2008 through June 2010, outflows from equity funds totaled $232 billion, while inflows to bond funds hit a staggering $559 billion, according to the Investment Company Institute (ICI).

But as 2010's bull market continued climbing, and the U.S. Federal Reserve maintained its loose monetary policy, bonds' safe haven status faded in the second half of the year. Now analysts are warning investors to escape the investment in 2011, as inflation and interest rates are likely to rise and the bond market is headed for a downturn.

But as 2010's bull market continued climbing, and the U.S. Federal Reserve maintained its loose monetary policy, bonds' safe haven status faded in the second half of the year. Now analysts are warning investors to escape the investment in 2011, as inflation and interest rates are likely to rise and the bond market is headed for a downturn.

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