Dogs of the Dow
July 26th, 2017
With the major market averages hitting all-time highs, many investors are waiting for a pullback in the market. Perhaps rather than waiting, those investors should look into a strategy that aims to find blue chip stocks that may be undervalued. The Dogs of the Dow strategy proposes that an investor annually purchase the 10 stocks in the Dow Industrial Average whose dividend is the highest fraction of the of their price. When the price of a stock goes down the dividend percentage rises, which is why the strategy believe the 10 highest dividend stocks have the potential to be undervalued and may grow in price. Not only does this strategy have the potential for growth, but it also pays a dividend along the way.
Tax Day Isnít All Bad!
March 29th, 2017
Itís almost that day again where Americans scrounge up all of their tax documents to file their returns for Tax Day! Many people dread this day, but it really isnít all that bad, especially for those who have retirement accounts. Did you know you are able to make prior year contributions to your retirement accounts up until tax day, which is April 18th this year. Contributing to a retirement account may even result in a break for you taxes. So instead of dreading tax day this year, think of it as a gift of extra time to contribute to your tax advantaged retirement accounts! Get those contributions in now!
Seasons Change and Financial Goals Do Too!
October 25, 2016
Itís that time of year where the air becomes chilly, the night time comes a little sooner, and the leaves change color and fall to the ground. The changing of the seasons is always a great reminder to think of the changes that have occurred in your own life. Lifestyle changes, whether itís buying a house, having a child, or retirement becoming just one day closer, may have an effect on how you want to be invested in the market. Chances are you wouldnít want your investments positioned the same way at age 25 vs. age 65. As retirement approaches, meet with your advisor to see if you have any shortfalls between your current investment plan and your future income needs. One of the biggest questions we get in our offices at NJC Investments is, ďWhat will my cash flow be at retirement from my investments?Ē. It is a good idea to meet with your financial advisor at least yearly to discuss your ever changing financial goals and how your advisor can help you to achieve them.
Santa Claus is coming to town!
November 24, 2015
Historically, we have officially entered the strongest six-month period of the stock market! Since 1990, November through April has added 548% to the S&P 500. That is 8 times the +66% return for the months of May through October. Also, since 1950, the Dow Jones has had an average annual return of 0.3% for May through October and a 7.5% average annual return for November through April.
And donít forget, Santa Claus will soon be coming to the Stock Market for the Santa Claus Rally! The Santa Claus Rally is known as the last 5 trading days of the year and the first two of the New Year. According to the Stock Traderís Almanac, since 1969, the Santa Claus Rally has yielded positive returns 34 out of the past 44 holiday seasons! Nobody really knows what causes this, but some speculate reasons such as optimism around Christmas time, investing Christmas bonuses, or trying to lock in tax reductions at the end of the year. Whatever the reason may be, NJC Investments canít wait for Santa Claus to come to town (and to the stock market)!
What to do During a Market Correction
September 4, 2015
1. Donít Panic
Market pullbacks are inevitable. They will happen and it is important, as a long-term investor, to ride out these pullbacks and even use them as an investment opportunity. Letting your emotions take over can cause you to get out of the market at the wrong time. The market has gone without a correction for 4 years and many analysts have been anticipating this correction for quite some time now.
2. Continue or Start a Dollar Cost Averaging Plan
Dollar Cost Averaging is when you invest a specified dollar amount, periodically. Timing the market is near impossible, and dollar cost averaging allows you to always be investing. When the market is down, you will get more shares, when the market is up, you will get less. This averages out your cost. All NJC Investment employees use this investing technique and we recommend it to all clients!
3. Look for Blue Chip stocks that have been through previous market pullbacks and came back. /p>
Most likely, these blue chip stocks are on sale! Look for companies with good fundamentals that have been around in past pullbacks. They are most likely selling at a great value and have a great dividend!
4. Work with a Financial Advisor
One of the best ways to not make emotional decisions while investing is to hire a financial advisor. They should develop a financial plan specifically designed for you, and they should keep you on course with that plan, even during the downturns.
For more ideas on what to do during market corrections, give us a call at 570-586-5030.
Donít Wait to Save
March 20, 2015
Are you a young adult just getting started in the work force? If so, have you started thinking about your retirement? If you havenít, donít wait any longer! Starting an IRA at a young age may have great benefits such as investing for the long term. Investing money monthly is a great strategy for a new investor. Also known as Dollar Cost Averaging, this strategy allows you to always be investing, whether the market is up or down, and your cost basis will average out over time. This takes out the trouble of trying to time the market.
Roth IRAís are a great tool for younger investors as well. Roth IRAís allow you to take distributions at age 59 Ĺ tax free, whereas distributions from a Traditional IRA will be taxed as income. Also, in a Traditional IRA, you are required to begin taking a minimum distribution at age 70 Ĺ, even if you donít need the money. Roth IRAís do not have these required minimum distributions. There is a $181,000 income limit for single tax filers and a $183,000 limit for joint tax filers for Roth IRAís for 2015. Young adults tend to have a lower income which makes the Roth IRA and its benefits attractive. So, think about starting to save for your retirement today, your older, retired self will thank you!
For more detailed information on Roth IRAís, please contact us on our website.
Tis the Season to Invest
December 2, 2014
As Christmas is quickly approaching, we would like to take a look back in history at the performance of the market for these upcoming months. Historic data from 1928-2013 has shown that, on average, the best performing months for equities are November, December, and January. November has shown to typically be the second best performing month trailing right behind December. So donít be a Grinch this holiday season and stand on the sidelines. Instead, spread some holiday cheer and look for opportunities to invest your cash! If youíre looking for some investing ideas, contact us through our website or by phone at 570-586-5030.
Spooked by Volatility
October 10, 2014
Halloween is a time filled with ghosts, ghouls, and spooks. Staying true to the Halloween theme, it seems as though investors have been spooked by the volatility of the market. We would like to remind investors that volatility can create exciting opportunities within the market. A volatile market is a great time to start Dollar Cost Averaging. This way, you are always putting money into an investment, whether it is up or down, and your cost basis will average out. Dollar Cost Averaging relieves the investor of trying to time the market. Also, did you know that in the last 20 years, on a total return basis, the S&P 500 has gained more in the 4th quarter than the other three quarters combined? From 1994-2013, the first three quarters have a total return of 120% versus a 165% total return for just the last quarter over the same time period. Give us a call at 570-586-5030 for more information on investing.
Investing For the Long-Term
May 7, 2014
Spring is the season that signifies new growth, cleaning out the old, and bringing in the new. Why not apply the Spring way of thinking to your portfolio? Maybe try a new way of investing that will allow you to build up your portfolio over the long term such as Dollar Cost Averaging. Dollar Cost Averaging allows you to invest a regular amount periodically. For example, you may want to invest $100 each month into a specific mutual fund. This allows you to buy more shares when the fund is down, and fewer shares when the fund is up. This will lower the average cost per share of your investment.
You, as the investor, can decide the amount of money, how often you invest, and which investment you would like to be adding to. NJC Investments offers a service where we can electronically transfer the funds from your bank account to your mutual fund periodically. This strategy is ideal for many types of investors.
Think Spring and consider a new approach to investing. If you are interested in more detailed information about Dollar Cost Averaging, give us a call at 570-586-5030.
Why You Should Consider Contributing To Your IRA Now
February 26, 2014
1.) Tax-Deferred Growth The earnings in your account will grow tax-deferred. This means that you are not required to pay taxes until you begin to take distributions.
2.) Income Tax Deduction Many people who contribute to an IRA will get a tax deduction. People with a retirement plan at their work will not be able to take this deduction.
3.) Distributions Are Not Required Until Age 70Ĺ Distributions from your IRA account may begin as early as age 59Ĺ without penalty, but you do not need to take a Required Minimum Distribution until age 70Ĺ allowing more time for tax-deferred growth.
4.) You Can Still Make a Contribution For 2013 You are able to make a 2013 contribution to your IRA up until April 15, 2014. You may contribute up to $5,500 for 2013 and 2014 to your IRA. For those over age 50, you may contribute up to $6,500.
If you are interested in contributing to your IRA or would like more information regarding IRAís, please donít hesitate to contact us.
January 7, 2014
Next to your retirement, college is the second most important investment you will make in your life time. College graduates from 2011 owed an average of $26,600 in student loans after graduation. Student loan debt is ranked number two compared to other types of consumer debts, second only to mortgages. It is never too early to start saving for your children or grandchildrenís college education. NJC Investments offers CollegeAccess529 Plans that are designed specifically for higher education financial planning. They offer tax-free growth, tax-free withdraws when used for higher education, and tax deductible contributions. The portfolio automatically reallocates your assets as the child grows older, which helps to take the guess work out of investing. The best part is you retain full ownership of the funds and you may change the beneficiary of the funds at any time. If you would like more information, please call us at 570-586-5030 for a free brochure and for any questions you may have.
The Santa Claus Rally
December 2, 2013
Itís the most wonderful time of the year. Did you know that Santa doesnít only visit your local mall at this time, but he makes a visit to the stock market too! The Santa Claus Rally is known as the last five trading days of the year, plus the first two of the New Year. Since the 1950ís the S&P 500 has averaged 1.5% gains for this short, seven day window. These days are often an indicator of how the upcoming year will be for the market as well. Not only do these seven trading days called ďThe Santa Claus RallyĒ tend to have high gains, but the entire month of December has historically shown to be a good month for the stock market. You better start hanging your stockings, because Santa Claus in coming to town!
3D Printing: A New Era of Technology
October 24, 2013
Has our technology really come so far that we now have the ability to make working copies of guns, prosthetic body parts, even copies of stem cells? The answer is yes. 3D printing is a technology that is unfathomable to many. It is the process of making a three-dimensional solid object or any shape from a digital model. 3D Printing uses an additive process where layers of material of different sizes and shapes are placed on top of each other to create the final product.
Many specialists have said that 3D printing will change our world. The growth potential in this technology is huge. Although the technology has been around for awhile, it has recently surged due to a lower product cost and a better understanding of the technology to the general public. Analyst Gartner predicts the rate of growth to rise 75% in 2014.
For more information about this upcoming technology, you may contact us through email or by phone.
October 1, 2013
The government shutdown is now a reality. Now, it is time to ask ourselves, what toll will this take on my investments? Historically, government shutdowns have not affected the prices of stocks negatively.
In 1995, the government shutdown lasted from November 14 to November 19. During this time, the S&P 500 gained 1.3%. During the 1995-96 shutdown from December 16 to January 6, the S&P had a small gain of 0.05%. Six months after the first shutdown, the SPDR S&P 500 ETF was ahead 14.57%. Six months after the second one, it was ahead 9.51%.
As an investor, a government shutdown should not be of much concern. Government closures throughout U.S. history have always been short-lived. Letís hope this one will be too.
How To Play Rising Rates
Nerves are running high as we watch rates rise. Most clients are asking us, "What can I do in a market like this?" We feel that sitting back and waiting is not the most effective strategy. There are ways that you can protect your portfolios from rising rates, and even profit from them. Here are a few investment strategies we would recommend.
Yields of Floating-Rate Debt rise alongside interest rates and their rates are adjustable.
These bonds are more sensitive to economic growth than to interest rates. They have historically performed well in a rising rate market.
You have the option to turn your convertible bond into a stock at a later date which makes them much less sensitive to changes in yields.
In 2003, when Treasury yields rose, equity-income stocks outperformed all other income-producing investments. Also, dividend payments tend to rise with inflation.
Commodities tend to act as a hedge against inflation. They offer protection against rising rates and diversification.If you would like to take action or review your current portfolio, please feel free to set up an in office or over the phone consultation with us on the right side of our website.