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Designing the Appropriate Common Stock Retirement Portfolio: Stock Selection Options Part 1
by Chuck Carnevale of F.A.S.T. Graphs,
What is the best way to design or construct a common stock portfolio? This is a question I am often asked and my short answer is always the same - it depends. The truth is, there is no perfect method or strategy for designing a stock portfolio that is right for every individual investor. However, there are principles of sound investing that every investor can follow and apply when designing a common stock portfolio that’s just right for them.
The 2 Keys to the Magic Formula for Long-Term Investment Success
by Chuck Carnevale of F.A.S.T. Graphs,
Investing in anything comes with a degree of uncertainty because all investing returns happen in the future. And even though the future is unpredictable, the future is what everyone that invests is investing for. These realities present important challenges that every investor must face and deal with in order to succeed.
Understanding Fair Valuation: A Common Sense Approach To Long-Term Investing Success
by Chuck Carnevale of F.A.S.T. Graphs,
In order to understand what the intrinsic value or fair value of a common stock is, you must think like a long-term business owner and not like a stock trader. Additionally, you must think like a business owner that has no intention of selling their business. Put another way, your business generates your livelihood. Therefore, your primary focus and attention is on answering the question: how’s business?
12 Attractive Fast-Growing Dividend Growth Stocks for High Total Return
by Chuck Carnevale of F.A.S.T. Graphs,
The current market environment is presenting many challenges to the conservative retired investor in need of current income. Interest rates are near all-time lows and the valuations of many blue-chip dividend growth stocks have become extended. Consequently, it is becoming very difficult to find quality investment opportunities that can provide safety through sound valuation, attractive yield and the potential to fight inflation.
I Own Southern Company and AGL Resources – Now What Do I Do?
by Chuck Carnevale of F.A.S.T. Graphs,
Utility stocks are generally low-growth high-yield investments. As I will soon illustrate, both Southern Company (SO) and AGL Resources Inc (GAS) neatly fall into that category. These low-growth and above- average dividend yield characteristics have led me to only invest in utility stocks when two important conditions are met.
In Today’s Overheated Market Control Risk in Your Retirement Portfolios with Sound Valuation
by Chuck Carnevale of F.A.S.T. Graphs,
Investing money in anything is never without risk. When investing in liquid investments, prices can and do fluctuate daily. Importantly, all liquid investments can fluctuate in price, and that includes both stocks and bonds. I mention this because price volatility, especially when investing in common stocks, represents one of the biggest risks that investors focus on, some to the point of obsession.
Was Warren Buffett a True Value Investor When He Bought Precision Castparts?
by Chuck Carnevale of F.A.S.T. Graphs,
When I first got interested in investing in common stocks some 50 years ago, I thought it would be wise to research and then study the investing behaviors and philosophies of the recognized investor greats. My efforts first led me to Ben Graham, and from there to many other famous value investors such as Philip Fisher, Walter Schloss, William J. Ruane, Irving Kahn, Peter Lynch, and of course the venerable and perhaps most famous of all, Warren Buffett.
10 Dividend Growth Stocks for Your Retirement Portfolios Aggregate Yield 4.3%: Part 2
by Chuck Carnevale of F.A.S.T. Graphs,
After an exhaustive search of the dividend growth stock universe I identified 20 dividend growth stocks that I felt were currently worthy of consideration for retirement portfolios based on valuation. In part 1 of this 2-part series found here I discussed the current level of the S&P 500, and offered some important principles about valuation. Additionally, I offered the first group of 10 of what I consider the highest quality members of the 20 screened research candidates I uncovered.
20 Dividend Growth Stocks To Buy Today For Your Retirement Portfolios: Part 1
by Chuck Carnevale of F.A.S.T. Graphs,
Assuming an equal investment in each of the 20 research candidates provides an average aggregate dividend yield of 3.66%. Although each candidate was primarily suggested based on the merit of fair or attractive valuation, the 10 research candidates in this article was primarily focused on quality. In part 2, the 10 candidates presented were focused primarily on either yield or total return.
Retired Investors Don’t Buy Bonds Until?
by Chuck Carnevale of F.A.S.T. Graphs,
The primary attractions supporting investing in bonds or other fixed income instruments have traditionally been high income and safety. People invest their principal in bonds and receive a stated interest rate (coupon) over the life of the bond and are given the promise of having their principal returned at maturity. Under normal times, bonds would typically pay a higher rate of interest than the dividend rate on stocks. Consequently, bonds have acquired the reputation as low risk and high income instruments.
Market Timing Is Not Appropriate for Retired Investors
by Chuck Carnevale of F.A.S.T. Graphs,
Any discussion on the appropriateness of any “investment” strategy should start with a discussion on the important differences between investing versus speculating. Although these are radically different concepts, it is all too common in finance jargon to ubiquitously reference all financial activity as investing, even when speculating would be the more precise term. I believe it is vitally important for people to understand the distinctions between investing and speculating, and it’s even more important to be cognizant of which you are engaging in.
How Much Bond Duration Could You Endure?
by Chuck Carnevale of F.A.S.T. Graphs,
In my most recent article titled “Designing a Retirement Portfolio That’s Just Right for You” I opined that a retirement portfolio should be designed to meet the individual investor’s specific goals, objectives and risk tolerances. I also suggested that the highest total return is not always the best approach because if the investor needs income to live off of, a focus on a consistent rising income stream makes more sense.
Designing a Retirement Portfolio That’s Just Right For You
by Chuck Carnevale of F.A.S.T. Graphs,
No one knows your own personal financial situation better than you do. Every individual possesses their own unique investment goals, objectives, needs and risk tolerances. At first glance this may seem simple and straightforward to the point of stating the obvious. However, I contend that the reality that individuals have different financial situations, goals and objectives is profoundly important as it relates to designing an appropriate retirement investment portfolio.
The Best Way to Judge Past Performance: Part Two
by Chuck Carnevale of F.A.S.T. Graphs,
On virtually every financial website on the planet there is a never-ending daily stream of stock tips and recommendations. Consequently, the investing public is literally flooded with information and advice regarding what stock to buy today or not to buy. Some of what is offered is supported by factual information and logic, but unfortunately, much of what is offered is merely based on the opinion of the author. This presents quite a challenge to the prudent prospective investor seeking sound advice or guidance.
“Ye Of Little Faith” What Has It Cost You? Part 1
by Chuck Carnevale of F.A.S.T. Graphs,
I believe that one of the most important attributes that a successful investor must possess is optimism. Any serious student of financial history would recognize and acknowledge that economically speaking, things are good much more often than they are bad.
4 Healthcare REITs For A Healthier Retirement Portfolio
by Chuck Carnevale of F.A.S.T. Graphs,
To be considered prudent investors we must recognize and accept the undeniable reality that all true investing is done in future time. Consequently, the key to long-term investment success is to forecast the future as accurately as we possibly can. Of course, we must simultaneously recognize and accept that forecasting the future can only be accomplished within a reasonable degree of accuracy. Forecasting the future, and investing for that matter, can never be a game of perfect. Nevertheless, our investing success will ultimately be achieved based on how good our forecasts turn out to be.
Retired With Money To Invest? Consider Playing Defense With Utilities
by Chuck Carnevale of F.A.S.T. Graphs,
Prudent investors might consider investing in fairly valued utility stocks if they need income, and if they are concerned about safety and capital preservation. Utility stocks can also serve as a viable alternative for parking cash. This last point is especially relevant when the valuations of other equity options are extended as they are today.
What The Great Recession Taught Me About Dividend Growth Investing
by Chuck Carnevale of F.A.S.T. Graphs,
Ever since I first got interested in investing in stocks circa 1965 I have been confronted with a constant and persistent admonition about the next pending market crash. In those early days I contributed much of the negativity toward stocks to a lingering overhang from the Great Depression. Many of the people I was talking with had been literally traumatized by stern warnings from their parents or grandparents about the risk of investing in the stock market. Stocks were too risky for prudent people to invest in and serious money should never be invested there.
My Top 3 Fabulous Pharma Stocks
by Chuck Carnevale of F.A.S.T. Graphs,
I am a fervent believer that investment decisions should be made based on the relative merits of each individual investment under consideration. However, my anecdotal observations and experience suggests that many investors do not embrace that approach. This is especially true regarding investment decisions on common stocks. Instead of focusing on the opportunities and valuations available from select individual businesses, many investors are obsessed, and I allege blinded by generalized views or beliefs about the overall market and/or the economy.
10 Reasons Why Growth Stocks Can Be Appropriate for Retired Investors
by Chuck Carnevale of F.A.S.T. Graphs,
In recent weeks I received several questions and comments from readers regarding my views on the appropriateness of investing in growth stocks in retirement portfolios. Additionally, and on a related topic, I have also come across numerous discussions, sometimes quite heated, about whether it’s best to invest for total return or growth of dividend income. Consequently, I thought it would be interesting to share my views and provide my perspectives on both the appropriateness of growth stocks, and/or whether it’s best to invest for total return or income growth.
Three Keys Why Retired Investors Should Put Maximum Focus and Weight On Dividends
by Chuck Carnevale of F.A.S.T. Graphs,
In today’s low interest rate environment, prudent long-term investors, especially those in retirement, are best served by putting maximum weight and focus on dividends. There are important reasons why I support this position, and those reasons will be the focal point of this article. However, putting maximum weight and focus on dividends does not simultaneously mean at the exclusion of other important fundamental metrics.
The Great Beta Hoax: Not an Accurate Measure of Risk After All
by Chuck Carnevale of F.A.S.T. Graphs,
Beta is a rearview mirror statistic that is based solely on an analysis of its price history. To the prudent fundamental oriented value investor, statistics can never substitute for serious analysis and due diligence. Comprehensive research based on fundamentals will serve investors far better in the long run.
The Great Beta Hoax: Not an Accurate Measure of Risk After All
by Chuck Carnevale of F.A.S.T. Graphs,
Every investor is concerned with risk at some level. Arguably investors in retirement are and should be concerned with risk the most. However, not every investor looks at or defines risk in the same way. In truth and fact, there is a wide gap between how various segments in the financial community define and view the complex subject risk.
Can We Really Trust Nike’s Stock Price?
by Chuck Carnevale of F.A.S.T. Graphs,
One of the most common mistakes that I see common stock investors make is failing to formulate the important distinction between a company and its publicly traded stock. There are many great companies out there with fabulous stories surrounding their wonderful businesses. As a result, it can be very easy to fall so much in love with a great company that you can’t resist investing in the stock even when the valuation is extreme.
Warning: Don’t Let Market Hype Cause You to Miss This Total Return Opportunity
by Chuck Carnevale of F.A.S.T. Graphs,
Since the Great Recession of 2008 came to an end, the stock market, as measured by the S&P 500, is almost midway through the 7th year of a strong bull run. This marks today’s bull market as the third longest in US history. Considering how traumatizing the Great Recession and the accompanying stock market collapse was for most investors, this should be good and comforting news. But unfortunately, the length and level of our current bull market seems to be conjuring up more worry and angst than comfort.
The Shocking Truth About Share Buybacks
by Chuck Carnevale of F.A.S.T. Graphs,
The value and benefits, or lack thereof, of share buybacks to the future fortunes of a company and their shareholders is one of the most hotly debated subjects on popular financial blogs such as Seeking Alpha. Unfortunately, at least based on my own personal experience, most of the arguments are predicated on opinions and beliefs in lieu of the facts.
Hope Is Not A Strategy, Before Investing Have A Precise Calculation Of Return In Mind
by Chuck Carnevale of F.A.S.T. Graphs,
Many people make the mistake of investing in a stock simply with the hope or belief that it will or might go up in value. However, there is a very popular mantra that states “Hope is not a strategy.”
Attractively Valued Ameriprise Financial: a Long-Term Total Return Opportunity Raises Dividend 16%
by Chuck Carnevale of F.A.S.T. Graphs,
Ameriprise slightly missed their earnings estimates for the first quarter of fiscal 2015, and the stock has dropped over 3%. However, their return on equity increased to a record high 23.1 % and operating earnings were up 7%. Management appears to remain confident about the future as evidenced by the raising of their quarterly dividend 16% to $0.67 per share. Consequently, I consider the recent weakness an excellent opportunity for long-term oriented investors desirous of earning an above-average total return.
Mr. Valuation Disagrees with Henry Blodget: "It's a Market of Stocks" is not a Meaningless Phrase
by Chuck Carnevale of F.A.S.T. Graphs,
The meaningful phrase “it’s a market of stocks, not a stock market” stands as a continuous reminder to me to focus on what’s important while ignoring what’s not. Since I do not invest in the entire market, I spend no time worrying about it. Instead, I spent all my time and effort evaluating the specific investments that I am actually invested in.
Is Dow 17,000 Dangerously High? This Comprehensive Review May Surprise You!
by Chuck Carnevale of F.A.S.T. Graphs,
The Dow Jones Industrial Average recently closed above 17,000, a historical record and milestone. Consequently, the question at the forefront of every investors mind has understandably been raised. Has the market now become dangerously high and therefore destined for a crash? The truthful answer to this important question is that nobody can know for sure what the stock market might do over the short run.
Stocks for 2014: Fairly Valued Dividend Growth Stocks with an Emphasis on Dividends - Part 4
by Chuck Carnevale of F.A.S.T. Graphs,
I am a firm believer that common stock portfolios should be custom-designed to meet each unique individuals goals, objectives and risk tolerances. With that said, I believe it logically follows that in order to create a successful portfolio, the individual investor must first conduct some serious introspection to be sure that they truly "know thyself." Therefore, I believe the first, and perhaps most critical step, towards designing a successful equity portfolio is to ask your-self, and honestly answer several important questions.
Stocks for 2014: High Yield and Fairly Valued Dividend Stocks for High Current Income ? Part 5
by Chuck Carnevale of F.A.S.T. Graphs,
Retired investors seeking high income to live off of during retirement, face greater challenges today than almost ever before. The days of high yields available from bonds and other fixed income vehicles are long gone. Consequently, generating an adequate level of current income on retirement portfolios is difficult to say the least. This is especially tricky for those investors with a low tolerance for risk.
Stocks for 2014: Growth and Income For Total Return - Part 3
by Chuck Carnevale of F.A.S.T. Graphs,
When investing in common stocks, there is no one strategy that fits all investors. Some investors are focused on investing for income, some for capital appreciation and others for various combinations of both. Additionally, there is the issue of risk tolerance. Some investors are willing and capable of assuming greater risk if they believe it will lead to greater returns, while others are more risk adverse. These are just but a few of the many variations that apply to the individual investors own unique goals and characteristics.
Stocks for 2014: Fairly Valued Dividend Growth Stocks with an Emphasis on Dividends - Part 4
by Chuck Carnevale of F.A.S.T. Graphs,
I am a firm believer that common stock portfolios should be custom-designed to meet each unique individuals goals, objectives and risk tolerances. With that said, I believe it logically follows that in order to create a successful portfolio, the individual investor must first conduct some serious introspection to be sure that they truly "know thyself." Therefore, I believe the first, and perhaps most critical step, towards designing a successful equity portfolio is to ask your-self, and honestly answer several important questions.
Stocks for 2014: Growth and Income For Total Return Part 3
by Chuck Carnevale of F.A.S.T. Graphs,
When investing in common stocks, there is no one strategy that fits all investors. Some investors are focused on investing for income, some for capital appreciation and others for various combinations of both. Additionally, there is the issue of risk tolerance. Some investors are willing and capable of assuming greater risk if they believe it will lead to greater returns, while others are more risk adverse. These are just but a few of the many variations that apply to the individual investors own unique goals and characteristics.
Stocks 2014: Investing for Growth - The Power and Protection of High Compounding Earnings Growth
by Chuck Carnevale of F.A.S.T. Graphs,
As I become more mature (translate: gotten older), my investment philosophy has slowly evolved into a more conservative posture. When I was a younger investor I felt I had time on my side, and therefore, was willing to take on greater risk as long as I believed that greater rewards could follow. In other words, if I made a mistake by investing in an aggressive and more risky growth stock that went badly, I felt I had adequate time to overcome or recover my losses. Consequently, as a younger investor I relished a good growth stock.
Stocks for 2014: Something for Everyone: Part 1
by Chuck Carnevale of F.A.S.T. Graphs,
My biggest pet peeve regarding common stock investing is how so many people have a tendency to over-generalize this asset class. Commonly held beliefs such as investing in stocks is risky, or that the stock market is overvalued, or that the fed is driving stock prices, etc., are just a few examples illustrating my point. In truth, common stocks are as individually different as people are individually different. When dealing with human beings, most reasonable thinking people would reject prejudicial statements. Personally, I believe we should have the same attitude about common stocks.
How I Explain Amazon's Stock Performance
by Chuck Carnevale of F.A.S.T. Graphs,
Amazon (AMZN) is a stock that seems to defy conventional wisdom about how a stock is, or should be, valued. Fundamental investors, like yours truly, recognize and respect the importance of the earnings and price relationship. Moreover, I will be so bold as to emphatically state that in the long run profitability (earnings) will be the primary determinant of a businesses fair value, any business. However, my bold statement is predicated on the longer run. In the short run it is often a truth that all bets are off.
For Maximum Total Return Go for Growth
by Chuck Carnevale of F.A.S.T. Graphs,
Not all investors are the same. Therefore, not all investors share the same goals and objectives. Consequently, there are numerous strategies and investing methods available to choose from. Moreover, it also goes without saying that the investment strategy thats right for me may not be right for you. For that reason, its imperative that each individual looks for the strategy that is right for their own individual goals, objectives, risk tolerances and status. By status, Im referring to how many years you have left before retirement.
Trying To Beat The Market Is A Fool's Errand
by Chuck Carnevale of F.A.S.T. Graphs,
Proponents of indexing as the best investment strategy seemed to take great delight in reporting how the vast majority of professionally managed portfolios (mutual funds, separately managed accounts, hedge funds, ETFs, etc.) fail to outperform the S&P 500. Therefore, they argue, it is best not to even try. Investors should simply invest in index funds and forget about it.
What Is Due Diligence? Here's How I Do It
by Chuck Carnevale of F.A.S.T. Graphs,
The lexicon of the financial world is full of phrases and jargon that are often tossed about without considering that there may be those who are not exactly familiar with the true meaning of the terms. It recently came to my attention that due diligence may be one of those idioms. In my own writings, I routinely recommend that readers conduct their own due diligence and/or comprehensive research. However, I recently had a reader ask me exactly what due diligence was and how to do it?
What Is The Correct Discount Rate To Use? Part 2B
by Chuck Carnevale of F.A.S.T. Graphs,
One of the most widely-accepted and utilized methods of valuing a business in todays world of modern finance is discounted cash flow (DCF) analysis. Obviously, in order to calculate valuation, practitioners must rely on mathematical formulas. However, the challenge with utilizing mathematical formulas to determine the net present value (NPV) of a future stream of income is in determining the proper inputs. Consequently, the accuracy of our result is subject to the principle garbage in garbage out.
Calculating A Stock's Fair Value Based On Future Growth Expectations: Part 2A
by Chuck Carnevale of F.A.S.T. Graphs,
In part one of this two-part series I focused primarily on calculating the intrinsic value of a common stock based on an analysis and review of historical information and data. Although I strongly believe that there is much that investors can learn by studying the past, I even more strongly believe that since we can only invest in the future, that it is also implicit that we embrace a rational method of forecasting.
How To Calculate The Intrinsic Value Of Your Common Stocks: Part 1
by Chuck Carnevale of F.A.S.T. Graphs,
Every investor in common stocks is faced with the challenge of knowing when to buy, sell or hold. Additionally, this challenge will be approached differently by the true investor than it would by a speculator. But since I know very little about speculation (trading or market timing), this article will be focused on assisting true investors desirous of a sound and reliable method that they can trust and implement when attempting to make these important buy, sell or hold investing decisions.
Invest In Stocks With A Margin of Safety To Reduce Risk And Enhance Returns
by Chuck Carnevale of F.A.S.T. Graphs,
Of all of the many sound investing principles that legendary teacher and investor Ben Graham put forward, he believed that his concept of margin of safety was the most important of all. This investment lesson was so deeply ingrained into the mind of Ben Grahams most famous student, Warren Buffett, that he created his two most important rules of sound investing. Rule number one: Never lose money. Rule number two: Never forget rule number one. Clearly, both of these renowned sages understood the importance of minimizing risk, especially when investing in equities.
Utilities - Today's Best Bond Alternative
by Chuck Carnevale of F.A.S.T. Graphs,
To refer to any stock or equity as an alternative to bonds or fixed income is sure to stir up the ire and consternation of many professional and individual investors alike who deem themselves prudent. Frankly, under normal circumstances I would tend to agree.
The Telecommunications Services Sector Untethered and Poised to Grow
by Chuck Carnevale of F.A.S.T. Graphs,
Suffice it to say that the Telecommunications Services sector of today is not your grandfathers Telecommunications Services sector. The explosion, and rapidly becoming ubiquitous implementation, of wireless technologies have been disruptive and game changing. As a result, the very nature of the established stalwarts within this industry have gone through an extraordinary metamorphosis.
Is The Financial Crisis Over For Financial Stocks?
by Chuck Carnevale of F.A.S.T. Graphs,
The cause of the financial crisis of 2007 -2008, also known as the Great Recession of 2008, is attributed to many different theories. However, one of the most common theories is an easy money regulatory environment that led to an abundance of subprime loans, which in turn inflated real estate prices to bubble levels. Additionally, many blame the Financial sector, predominantly the money center banks, for exploiting the lax lending requirements with reckless and greedy behavior.
For A Healthier Portfolio - Look Here
by Chuck Carnevale of F.A.S.T. Graphs,
The Health Care sector is comprised of many diverse companies, as can be seen from the list of subsectors provided below. Historically the Health Care sector has been comprised of a significant number of companies with above-average growth rates of earnings. Consequently, a majority of the companies comprising the Health Care sector could be thought of as growth stocks over dividend growth stocks.
Are Blue-Chip Consumer Staples Worth Today's Premium Valuations?
by Chuck Carnevale of F.A.S.T. Graphs,
The Consumer Staples sector consists of companies that provide essential products. In other words, Consumer Staples are products that people cannot or are unwilling to do without. As a result of the essential nature of Consumer Staples, there are several attributes that distinguish this sector from most others. First of all, the essential nature of the products that Consumer Staples companies produce, are for the most part, non-cyclical. Second, Consumer Staples tend to be very insensitive to economic cycles.
Results 401–450
of 529 found.
