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The Income Investor

Latest Articles

Look Overseas for Value and Yield

By Dr. Carla Pasternak

 

Investors are turning to Europe amid concerns that U.S. equities are overvalued. At a forward P/E of 18 times 2017 earnings, the S&P 500 is trading well above its 10-year historical average of 14 times. By comparison, the benchmark STOXX Europe 600, which represents 17 countries across the European region, offers better value.

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High-Yield, Low Risk ETFs Outpacing the S&P 500

By Dr. Carla Pasternak

 

The markets have undergone a seismic  shift of massive proportions since November 8th, and after-shocks are in the wind.

 

Industrials, small caps, and banks have seen major gains on expectations that President-elect Donald Trump will push for tax cuts and deregulation that could accelerate economic growth and stoke inflation. Trump's fiscal policies could force the Federal Reserve to raise interest rates more aggressively, which would help bank stocks benefit from higher lending rates.

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BDCs Yielding 10% - Primed for Higher Interest Rates

By Dr. Carla Pasternak

 

Utilities and other safe income plays often lose their luster as rates rise. These so-called bond-like equities trade like bonds. Their share prices retreat when rates are expected to rise, and their yields, which move inversely to the share price, rise to compete with higher bond yields.

 

But not all income stocks trade like bonds. One class of dividend payers, sporting average yields of about 10%, is actually set to benefit from rising interest rates.

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Small Cap Stocks Marching Higher

By Dr. Carla Pasternak

 

Small cap stocks have been on a tear since February. Companies with roughly $250 million to $2 billion in market capitalization (share price times outstanding shares) in the Russell 2000 Small Cap Index have surged nearly 30%, almost twice the gains of large cap stocks in the S&P 500.

 

Small caps haven't always done so well. For two years through late 2015, they under-performed, with  small caps losing nearly 2% versus gains of  better than 7% for mid-caps and 8% for large caps.

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