Don't Give Up on Small Stocks

These days, it seems that nearly everyone is recommending large- company stocks. The big boys, according to many analysts, have attractive valuations, and the recovering economy should improve their prospects. But some pros are loath to dump the group of smaller stocks that have trounced the broader market for years. Indeed, while the Standard & Poor's 500 index was up 13 percent in 2010, small and midsize stocks gained nearly twice that. Over the past two decades, small- and midcap stocks have produced an average annual return of 14 percent, while the S&P 500 has returned an average of 11 percent annually, according to FactSet Research Systems. And some portfolio managers say there's still plenty of opportunity in the small and midsize outfits. Smaller stocks tend to outperform...

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Where Checking Is Still Free

Following the path of the pneumatic tube and the passbook savings account, the cheap checking account is on its way to banking history. In its place, customers are finding the more-expensive checking account, with charges and fees at every turn. But even as costs rise – and checks become increasingly obsolete – there are still some cheap ways to bank by check. Free checking accounts were a big sell over the last decade, as WaMu -- remember them? -- pushed other banks to drop their monthly fees and minimum balance requirements. But WaMu is gone, and less than half of all checking accounts are now free, according to MoneyRates.com. In July, Wells Fargo added fees to its formerly free checking account; this month, Chase also doubled some of its monthly fees. Now the total bill for a year's worth...

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A Portfolio to Keep Income Flowing

While pension funds are increasingly seen as relics from a bygone age, they can still teach investors a thing or two about managing money during retirement. Pension funds and retirees have similar goals. A retiree is trying to maintain a certain standard of living, including the basics of having enough money to pay the bills for the rest of his or her life. A pension fund, meanwhile, has to ensure it can make the payouts it owes to participants for the rest of their lives. In both cases, the primary goal isn't to make as much money as possible or "beat the market." Instead, it's to create a portfolio of investments that will allow you to meet specific obligations -- no matter what happens in the markets. This may seem like a distinction without a difference. But it requires a fundamentally...

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Why Stocks Are Tanking (It's Not Just Libya)

IT'S NOT JUST ABOUT Libya. There's another reason the stock market just took a hit. Everyone had become way too bullish and way too complacent. Pride, as they say, goeth before a fall. When everyone's bullish, who is left to come in? We're slap-bang in the middle of another mania. How crazy have people become? Last week a portfolio manager I know told me about a conversation he'd just had with one of his clients. This manager runs a conservative practice. His clients are solid, sensible types—some old money, and some new money that thinks a bit like old money. One of his clients, a partner in a small private firm, had called him up and said, casually, that he and his partners were discussing this year's bonus pool. "We're thinking about putting it all in Apple ( AAPL: 353.13*, +4.97,...

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6 Ways Conventional Wisdom Wastes Money

Updated guidelines, better ways to save. Most of us learned the basic tenets of budgeting, housekeeping and auto maintenance from our parents. But times have changed, and some of the things you believed to be true are not the case anymore. Following are several examples of conventional wisdom that may cause you to needlessly waste money. Dig in and learn how to effortlessly save money by thinking outside the box. Change Your Oil Every 3,000 Miles The little sticker placed on the car windshield reminds you to change a car's oil every 3,000 miles -- regardless of make, model or scenario. But many experts now say the 3,000-mile oil change is dead. Why? New car engines and oil quality have advanced to the point where cars can go 5,000 to 10,000 miles without a change. "Generally speaking,...

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Putting Consumer Debt Into a Bigger Perpsective

One thing you could be sure of in pre-Great Recession America was that U.S. consumer debt would rise pretty consistently. The chart below from a Federal Reserve Bank of New York report titled Quarterly Report on Household Debt and Credit depicts the trend: In the 10-year period from 1999 to 2008, debt dipped significantly only once, in mid-2001. Considering that 2001 was a recessionary year marked by 9/11, that's all the more remarkable. Then came the recent downturn. The expansion of debt peaked in mid-2008 and then began a steady decline as the recession took hold. Though the slump officially ended in mid-2009, consumer debt continued falling...

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Will Silver Outshine Gold Again in 2011?

Everybody knows gold had a great year in 2010, rising 27% and beating most other investments. But silver actually did much better, climbing a breathtaking 83%. Can the "poor man's gold" continue to outperform its more expensive big brother? Many analysts think so. Adrian Day, an asset manager and author of a recent book on commodities, Investing in Resources, says that for 25 years silver stockpiles were so huge that its price didn't move. But in recent months, the stockpiles have been exhausted. "Supply-demand has been pretty tight" Day says. "I think silver could continue to go up." But he also cautions that the recent large jump, particularly since last August, means that "clearly the downside has increased." Favored Ways of Investing Peter Schiff, CEO of Euro Pacific Precious Metals...

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Bucking a Trend: Why the Dollar Could Rally in 2011

Despite a likely third straight year of $1 trillion U.S. budget deficits, and the U.S. Federal Reserve's controversial quantitative easing program, the U.S. dollar has basically remained flat against the world's other major currencies. Compared to the British pound, it has barely budged over the past year, going from $1.6153 to $1.6093. At the same time, it fell a relatively small 4% against the Canadian dollar and went up 5% against the euro. Admittedly, the dollar lost a substantial 10% of its value against Japan's yen, but unless you're willing to "park" your money in Japan's famously low-interest banks for almost no return, the yen is not a worthwhile option. By extension, that same drive for yield/return will probably discourage many institutional investors from trading in their dollars...

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Silver Near a 31-Year High

Back in the late 1970s, the Hunt brothers from Texas tried to corner the silver market. That drove prices to $48 an ounce. Now, 31 years later, silver is shooting higher again. The March silver futures contract closed at $32.296 per ounce, up 72 cents. Since gold is expensive, investors are turning to silver to hedge against inflation. Many fear that the Federal Reserve will not be able to control the spike in commodity prices. The Fed is buying $600 billion of treasuries and keeping interest rates near zero. Silver is an industrial metal as well as a precious metal. With industrial production picking up, silver is more in demand. It is used in a host of products, mainly in electronics. Some miners are hedging their silver production. They are selling forward contracts against their estimated...

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Further Deflation of the Housing Bubble

The Washington Post, which completely missed the $8 trillion housing bubble whose collapse wrecked the economy, is still having a hard time understanding house prices. It notes that the Case-Shiller 20-City index is a moving average of sales closings for the prior three months. And, there is typically a 6-8 week period between when a contract is signed and when it closes. It therefore tells readers that the December data to be released on Tuesday: should reflect the autumn lull in the economy. The question is whether the improved economic outlook over the past few months will translate into a firming up of home prices in early 2011. Actually no. Short-term ups and downs in the economy will not be reflected in house prices. The main factor pushing house prices lower right now is the end of...

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Why Are India ETFs in a Rut?

After a stellar year, India ETFs are lagging the broader market as economic problems weigh on the country. Though this might just be a short-term phase that will run its course, you’ve got options. The recent weakness in India’s economic growth may just be temporary since the potential for monumental growth is still there, says Ron Rowland for Money and Markets. But right now, it’s got problems: The biggest threat to India ETFs is inflation. It is especially evident when taking a look at the rise in India’s food costs since a large proportion of income for the pool of low-income workers is mostly spent on food. Analysts cite that the macro-economic conditions and negative political sentiments do not favor the Indian equity market. High inflation, increased crude prices and a series of corruption...

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Is Apple the 'Short of the Century'?

Former Wired columnist and CEO of ADVFN Clem Chambers came onto CNBC Friday and called Apple (AAPL) the short of the century. The main premise of his argument is that Apple is a large cap stock and should be valued like other large cap companies. He says, If we value this company (Apple) as a normal large cap company, it should trade at $200 a share and no more. He goes on to say that other large cap names within the sector trade at a 14 P/E while Apple trades above a 20 P/E ratio. Chambers argues that Apple's chart is a huge bubble, that Apple cannot function without Steve Jobs, and that "the dynamic with apple is everyone expects this story continue. One hiccup and the stock is back down to $200 a share." You can see his segment here. Well...this guy is going to be unpleasantly surprised...

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The Top 3 Ways to Play Uranium

Uranium prices have gained more than 70% from their recession bottom. And that's only the beginning. The element is bracing for a super-surge, and we've found three ways to profit from this uranium bull market that could continue to rise through the rest of the decade and beyond. Uranium is heading back toward its historic highs. And prices could still double before they reach pre-recession levels. That's a potential 100% gain, or more, if prices continue to increase. And they will. Global superpowers are fast-tracking nuclear energy and combing the globe for more uranium. And hundreds of nuclear reactors are being designed and built as you read this. Alone, that's enough to drive uranium prices higher. But it's not the whole story. Since the late 80s, the world has been making do...

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South Korea: Emerging Market Exposure at a Discount

When we hear about gaining exposure emerging markets, most people immediately think of the BRIC countries (BKF). That should make sense, right? Well, not really since the MSCI lists a total of 21 emerging market countries, while the Dow Jones lists 35 emerging market countries. The takeaway here is that there are more than four emerging market countries. Still, we can’t blame the average investor for not knowing more since so much media hype over the years has been focused solely on Brazil, Russia, India, and China. In our personal opinion, the emerging market with substantial economic trade ties to all the big names which remains under the “media radar sweep” is South Korea. There are three primary reasons why iShares South Korea ETF (EWY) is the “smarter” way to gain diversified exposure...

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The Federal Reserve Vs. The Budget

Ben Bernanke does not like deficits and increases in the national debt. He also believes that the economy needs to be stimulated which is why he continues to maintain his faith in QE2. The new Budget is not likely to pass Bernanke’s test. The deficit this year will be $1.6 trillion, to some extent because of tax cuts. Next year it will be $1.1 trillion. The national debt will rise by $7.2 trillion over the decade which the Budget forecast covers. The tension between the Fed and the Budget cannot be seen more clearly than in a recent presentation by NY Fed chief William Dudley. He expresses only modest optimism about the recovery. The “headwinds” that face GDP improvement have hardly abated. Job creation of the sort that the Budget assumes may not be attainable. Dudley remarked in his Quarterly...

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The Big American Retailers With The Worst Service

Customer satisfaction in the retail and online e-commerce industries is getting worse. There is no single reason for this, but it is likely that the recent economic downturn is one of the biggest factors. A recession often cuts into retail payrolls, and so full-time workers are replaced by part-time ones. Anxiety among people who are not laid off rises. The employees in the stores who are the spokespeople for their companies have their morale shaken. A drop-off in customer service is bound to result. Recessions also rob businesses of the ability to compete effectively on price. A downturn hurts sales. This takes away the flexibility for businesses to offer discounts, unless their balance sheets are strong enough to fund losses in exchange for improved market share. Big companies such as Wal-Mart...

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The Twitter-24/7 Wall St. Market Report (2/18/2011) China Rate Increase, Zynga IPO

Twitter has, by most estimates, 175 million members, which makes it one of the largest social networks in the world. All major media companies are on Twitter and some have more than one million Twitter users. It raises the question of whether there is wisdom in crowds. 24/7 Wall St. will look at the Twitter posts at Reuters Biz, WSJ, Financial Times, CNN Money, MarketWatch, CNBC, and 24/7 Wall St. each day to see which stocks are most frequently mentioned. It is clear that in this area of social media these tweets are a sign of which companies the Twitter universe is interested in. Together, these financial sites are followed by nearly 1,000,000 Twitter users, which makes them a sizeable sample of Wall St.’s interests. In some cases, we will publish the actual tweets from the si...

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The Top 10 Tax Mistakes That Couples Make, and How To Avoid Them

While you’re mining this year’s tax instructions for savings on deductions and credits, don’t forget the special rules that come with your marital status. The so-called “marriage penalty” affects only couples with roughly equal incomes that year. Everyone else gets an Ozzie-and-Harriet “marriage bonus.” Here are the top 10 questions you and your spouse should ask yourselves in order to make sure you’re getting your maximum tax benefits: 1. Do you have two retirement plans? If not, start them now. When one spouse isn’t working, the other can fund an Individual Retirement Account in his or her name. You can salt away up to $5,000 for a spouse under 50, and $6,000 if your spouse is 50 or older. Contributions to a traditional IRA made by April 18 are deductible on your 2010 return. (A Roth IRA...

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The Net Worth Of The American Presidents: Washington To Obama

George Washington,the nation’s first President, was also one of the wealthiest men to hold the office. His Virginia plantation, “Mount Vernon,” consisted of five separate farms on 8,000 acres of prime farmland. Washington made significantly more than subsequent presidents: his salary was two percent of the total U.S. budget in 1789. Our 16th President, Abraham Lincoln, was not one of America’s wealthiest - any opportunity to make money after his term of office was cut short. He was born in a log cabin and served as an attorney for 17 years before his presidency. He owned a single-family home in Springfield, Illinois. Editor’s Note: This article was first published on May 17, 2010. The net worth of any of the Presidents on this list who are no longer living cannot change, except as measured...

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GrowOp: The Hydroponic IPO For Medical Marijuana

Medical marijuana is easily one of the most controversial businesses in America today. It is also one super-fast growth industry. 24/7 Wall St. is always on the lookout for issues where Wall Street meets Main Street, and if this does not fit that bill then nothing else does. If you heard that a technology player in the field of medical marijuana was about to have an Initial Public Offering you might not believe it. Well, it is. A California company called GrowOp Technology Ltd. plans to have an IPO later this year. We just interviewed GrowOp’s CEO and found out more about the company. Derek Peterson, GrowOp’s founding-CEO and a director, was an investment banker at Wachovia and Morgan Stanley. Clearly, he is not blowing smoke. GrowOp is based in Oakland, Calif. and is the technology...

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