Press Esc to close

Welcome to Money Morning - Only the News You Can Profit From.

Close

How to Profit From Wall Street's Biggest Gaffe in Decades

I was perusing the newswires a few weeks ago when the following Reuters news story headline all but physically grabbed my attention.

It stated: “Exclusive: Morgan Stanley Rebuilds in Commodities Trading.”

Most folks probably looked at this and tossed it off as just another of the endless machinations of Wall Street.

But I knew better…

  • Featured Story

    Recession 2013: Prepare Your Portfolio with These Rock-Solid Dividend Payers

    Successful investing is a bit like connecting the dots. Put enough of them together and they begin to form a picture.

    Unfortunately, today's dots are pointing towards a recession.

    With first-quarter GDP growth under 2% and a whole host of indicators moving in the wrong direction, it looks as though the U.S. economy has stalled.

    That leaves income investors like us faced with a very important question: how do we best protect our portfolios from the stock price declines and dividend cuts that a recession would bring?

    One simple answer is to invest in those countries that are not suffering recession. That opens up a world of possibilities.

    For instance, you might consider investing in Japan, which grew at over 4% in the first quarter. Orix Corporation (NYSE: IX) is a name I like.

    Or better yet you could invest in emerging markets where growth continues to sizzle.

    That makes stocks like the Aberdeen Chile Fund (NYSE: CH) a good buy-especially considering the fund offers a dividend yield over 10%. The fund is attractive to me for two reasons.

    First, it's because Chile is a well-run country, standing higher than the U.S. on several international business surveys. But more importantly, its dependence on copper and other commodities is not a problem unless the global economy as a whole goes into recession, which I don't expect.

    With assets in primarily Chilean securities, the fund also offers investors a nice measure of diversification from the U.S. economy, since they can expect Chile to keep on growing-- even if the U.S. economy takes a step backwards.

    But that doesn't mean you need to avoid the U.S. altogether, either.

    In fact, there is a key indicator I'll discuss in a moment which will allow you to preserve your income and the value of your investments through all but the deepest recessions.

    First though, you'll need to avoid a few pitfalls. As always, it's never just a matter of picking the stocks with the highest dividend yield. It's just not that simple.

    To continue reading, please click here...
    Read More...
  • us economic recovery

  • What Do You Think Are the Biggest Threats to the U.S. Economic Recovery? A handful of factors threaten the strength of the U.S. economic recovery this year, leading many to wonder just how well the country's economy will fare in 2011.

    The U.S. Commerce Department last week reported that U.S. gross domestic product (GDP) growth slowed in 2011's first quarter to 1.8%, down from 3.1% at the end of 2010. High gasoline prices and rough winter weather combined to drag down GDP.

    The news came a day after U.S. Federal Reserve Chairman Ben Bernanke held the first-ever Fed press conference and said he expects the U.S. economy to grow at a rate of 3.1% to 3.3% this year (down from the 3.4% to 3.9% range previously projected).

    "Coming in at 1.8, to get to where Fed's forecast is, you're going to need some robust growth in [quarters] two, three and four," Bob Andres, chief investment strategist and economist at Merion Wealth Partners told Reuters. "In my mind, the Fed's forecast and the Street's forecast are more than likely a little too optimistic going forward."

    Read More...