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Here's What President Obama's Win Means For Your Money

By , Chief Investment Strategist, Money Map Report - • Print | Email

Bitter, negative, expensive…I am hard pressed to find any positive adjectives describing this year's presidential campaign.

Evidently, the markets are struggling, too.

As was widely expected leading up to the election, all of the major averages got slammed in early trading on news of President Obama's victory. Just over an hour into yesterday's session, the Dow dropped 262.51, the S&P 500 tumbled 27.58 and the tech- laden Nasdaq fell 59.55. Oil tanked 2.95% and $2.62 per barrel to $86.08 while 10-year bonds saw yields plummet 6.20% to 1.63%.

O-bummer.

There is a bright side, though. Now that all the hoopla is over, investors can get down to business.

Here's what I'm expecting:

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How to Find High-Yield Investments in a ZIRP World

By , Money Morning - • Print | Email

Frankly, thanks to the U.S. Federal Reserve, it's surprising we have not seen a savers revolt in the United States.

We can debate how effective the Fed's Zero Interest Rate Policy (ZIRP) has been, but one thing is unquestionable: Those who rely on income from investments that are cautious and conservative have been brutally punished.

Traditional safe income havens like Federally Insured Certificates of Deposit and Treasury bills offer a minuscule return. It is not possible to retire and live off the interest earned on your savings unless you have several millions stashed away. Even then the return from conservative savings options will not provide a very luxurious retirement.

And according to Fed Chairman Ben Bernanke this condition will exist until at least 2015.

That's why in a ZIRP environment, savers must become investors.

To earn a decent return you have had to consider investments like stocks, bonds and real estate that require a deeper knowledge and risk tolerance than savings-oriented accounts. People with little or no investment experience or knowledge have turned to the stock market to earn the return necessary to fund their lifestyle and living expenses.

That idea might be frightening to life-long savers, but it doesn't have to be. Here's a strategy for finding high-yield investments in the Fed's ZIRP world.

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Can Google's (Nasdaq: GOOG) Nexus Dethrone the Apple iPad?

By , Contributing Writer, Money Morning - • Print | Email

When Google Inc. (Nasdaq: GOOG) launched its new line of Nexus tablets a couple weeks ago, it was a shot across the bow of Apple Inc.'s (Nasdaq: AAPL) dominant iPad.

Even though Hurricane Sandy forced Google to cancelan event planned to show off the new gadgets, it went ahead and launched its new products anyway.

The timing was no coincidence.

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How an Obama Win Affects Investments

By , Money Morning - • Print | Email

Now that U.S. President Barack Obama has secured a second term, how will his win affect your investments?

In terms of monetary policy, U.S. Federal Reserve Chairman Ben Bernanke's "grand experiment" with quantitative easing will continue at least until Bernanke's second term expires in 2014. We can expect the Fed to continue to expand its balance sheet through asset purchases-primarily mortgage backed bonds- and to keep overnight interest rates near zero.

The Fed currently expects GDP growth of 3% in 2013. Unemployment is expected to continue to decline through 2013 but the unemployment rate may move in fits and starts as more discouraged workers move back into the labor force as conditions improve.

Unless there is an unexpected improvement in the employment situation and housing prices, investors can expect quantitative easing and zero interest rates to remain in place through 2013.

Here are the other ways a President Obama win will affect your investments.

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There's More than Election 2012 Moving the Stock Market Today

By , Money Morning - • Print | Email

The stock market today is trading higher as investors await the results of Election 2012. By the end of tonight, barring legal battles that could delay a winner, the uncertainty surrounding the election will be over.

But there's more than the election that's affecting markets today.

As voters head to the polls, it's only fitting that the one economic report released today is on jobs.

  • Job openings continue sluggish trend- How Americans view the job market and what they expect it to be like under each candidate will be one of the deciding factors in this election. The Labor Department reported on Tuesday that job openings in the U.S. hit a five-month low in September, indicating that the recent drop in unemployment is not an accurate portrayal of the labor market. The number of available jobs fell by 100,000 to 3.56 million and it wasn't because more positions were filled – during September fewer people were hired, as well as fired. If you go back to December 2007, the start of the recession, there were about 1.8 people vying for each position and now that number has almost doubled to 3.4 people. "Hiring is the most costly expense for a business," Kurt Rankin, an economist at PNC Financial Services Group Inc. in Pittsburgh, told Bloomberg News. "Until a framework for policy can be determined, which will come with the election and the resolution of the fiscal cliff, businesses are not likely to ramp up hiring."

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Execs Keep Selling Their Facebook Stock - Time to Worry?

By , Money Morning - • Print | Email

The market has been buzzing about the fact that three top executives of Facebook have taken their first opportunity to sell some of their stock in the social networking company.

The sales were part of 230 million shares awarded to top executives and employees prior to the IPO that were subject to lockup until last week.

According to Forbes, another 777 million shares awarded to Facebook employees will come off of lockup next week. It is expected that Facebook employees will continue to sell shares for the rest of the year.

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Stock Market Today: Strong Earnings Fuel These Huge Gains

By , Money Morning - • Print | Email

The stock market today is down slightly, but two companies are soaring on great earnings and upgraded forecasts. Along with those two stocks, check out another company that has returned to profitability – but one leading energy company that's sending warning sings. Starbucks Corp. (Nasdaq: SBUX) surges on confidence- The Seattle, WA-based company posted a […]

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How to Know When to Sell Apple Stock (Nasdaq: AAPL)

By , Associate Editor, Money Morning • @DavidGZeiler - • Print | Email

Trying to figure out when to sell Apple stock (Nasdaq: AAPL), particularly given its spectacular performance over the past several years, is a major dilemma.

If you're long on AAPL, you're no doubt trying to sort through a lot of conflicting signals.

With AAPL down about 16% from its high of $702.10 on Sept. 19 amid a wave of negative news, some financial pundits are calling a top and urging Apple investors to sell Apple stock.

Trouble is, they've done this many times before during Apple's long climb. Sometimes it's after AAPL hits a new high, and sometimes (like we're seeing now) it's after the stock dips in reaction to some bad news.

But investors who opted to sell Apple stock in years past lived to regret it.

Back in 2010, for example, when AAPL breached the $300 mark, plenty of bears urged shareholders to rush for the exits.

Any who followed that advice missed out on a 100% gain.

At the same time, Apple stock can't keep rising forever. No company can maintain the sort of exponential growth necessary to fuel the kind of gains Apple has enjoyed over the past few years.

But the big question is when this will happen. Now? Next quarter? Next year? 2015?

And as if that weren't enough to make an Apple investor's head spin, there's the added stress of volatility.

From late November to early April, AAPL soared $270, an astounding 75% increase in just four and a half months. Then it fell $100 in the next five weeks.

With turbulence like that, retail investors easily can get heartburn trying to figure out when to sell Apple stock.

That's why we put together some guidance.

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The Hottest 2013 Natural Gas Story You've Never Heard

By , Contributing Writer, Money Morning - • Print | Email

The story for natural gas companies in 2013 is an improving one.

As Money Morning Global Energy Strategist Dr. Kent Moors explained last month, he believes natural gas prices in the U.S. will come back strong next year.

But the natural gas story is not just an American one.

Ask the average energy executive what region he or she is really excited about today and the answer you will get is one that was not even on many companies' radar a few short years ago – and one of which many investors are unaware.

2013 could be the year when investors become aware of the vast potential of the prolific natural gas fields in this region, potential that will be unlocked when gas from those fields is someday turned into liquefied natural gas (LNG) and sold to the energy-hungry markets of Asia.

I'm talking about the offshore waters of East Africa.

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Why Hurricane Sandy May Not Be All That Stimulating

By , Money Morning - • Print | Email

Invariably, every major disaster comes with the pundits who promise it brings a silver lining.

With a price tag of $50 to $70 billion, some economic forecasters are already rejoicing about the economic "stimulus" that rebuilding from Sandy will bring. If only it were so.

In fact, this paradox is well worn since it involves one of the central conflicts of economics itself. You may recognize it as a battle between Maynard Keynes vs. Frederic Bastiat.

It involves Bastiat's famous "Parable of the Broken Window".

You see, according to Bastiat (1801-50), the glazier who fixes the broken shop window earns money from it, and so he regards the broken window as economically beneficial. However, that's only half of the story.

It doesn't take into account what the shopkeeper might have done with the money he used to pay the glazier to fix the broken window.

As Bastiat points out there is a "hidden cost" within the broken window itself. The broken window made the shopkeeper that much poorer.

What's more, if the glazier secretly paid the boy who broke the window to generate the "new" business, he would be effectively engaging in theft from all the town's shopkeepers.

On a net basis, it's a no win ballgame.

Yet that is the effect of such misguided policies like the "cash for clunkers" scheme of 2009, which paid consumers to junk their still-usable automobiles long before their time.

Likewise, it's found in the same line of argument that somehow World War II rescued the United States from the Great Depression because it fails to properly account for the immense destruction of wealth (admittedly, mostly outside the U.S.) the war caused.

It seems easy enough—unless you're a Keynesian economist.

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