The defense sector has been one of the stable and strongest growing sectors since the 9/11 attacks. Firms in this sector were the biggest beneficiaries of rising defense budgets especially in the US. For example, Lockheed Martin (LMT) is up about 46% year-to-date. Despite excellent performance in the past, a recent journal article cautions investors …
Tech stocks are hot again this year. The top flying stocks are up by double digits percentage points year-to-date. The bull market in this sector continues for the past few years. Seemingly endless growth and innovation are driving investors to pay sky-high premiums for the top tech market darlings such as the FAANGs. Some of …
Continue reading ‘Tech Stocks: Is It Really Different This Time?’ »
The U.S. equity market as represented by the S&P 500 has performed very well this year with a return of 17.2% so far based on price return only. When dividends are included the returns will be a bit slightly higher. The returns on the index over the 5 and 10 year period is also very …
The current dividend yield of the S&P 500 is 1.90%. The yield has hovered around 2% for many years now. Since the 1990s the dividend yield has declined consistently year over year to reach the current low rates. The following chart shows the dividend yield since 1870: Click to enlarge Source: multipl.com However though the …
Continue reading ‘Why Dividend Reinvestment is Important Even When the Yield is Low’ »
In the equity market, the only thing that is constant is change. To put it another way, today’s winner could be tomorrow’s loser. So investors have to be cautious in betting too much on one company or sector with plans to hold them for the long term measured in decades or forever. For example, some …
Continue reading ‘One Decade’s Winner Could Become Next Decade’s Loser’ »