One of the biggest issues facing investors today is finding reliable income.

Unbeknownst to most folks, most of stocks’ returns come from dividends, NOT capital gains.

Indeed, according to a study performed by the London Business School, when you remove dividends, stocks have returned a mere 1.7% in average annual gains over the last 109 years.

To put this into perspective, this is less than you’d make from owning long-term US Treasury bonds (2.1%) over the same time period.

Indeed, if you’d invested $1 in stocks in 1900 and reinvested your dividends, by 2009, you’d have made $582 (adjusted for inflation). Take out dividends and you’d have only seen $6 from price appreciation. Yes, $6 from 109 years’ worth of capital gains.

The fact of the matter is that most businesses fail overtime. Trying to pick winners (stocks that will rally) is extremely hard.

So by focusing on those companies that pay dividends, you’re effectively focusing on those that have already succeeded because:

1)   The company has to have generated some kind of cash flow to pay the dividend in the first place

2)   The company has exhibited a commitment to shareholder returns by paying dividends (at the end of the day management’s culture sets apart winners from losers.

This is why I like big dividend companies so much… you KNOW you’re going to get paid for putting your capital to good use!

With my Big Dividends Investor newsletter, I show investors how to lock in BIG dividends for HUGE returns.

Already our two most recent picks are cranking out cash for our subscribers. One sports a massive 7% yield that is virtually tax free. The other pays out a whopping 12% dividend in monthly payments.

As a result, we’re crushing the market AND lock in massive dividend payments to secure their retirement.

If you’re an investor looking for a second stream of income to grow your wealth during retirement, you simply couldn’t ask for a better newsletter than Big Dividend Investor.

For just $99 a year, you get:

1. 12 issues of Big Dividend Investor featuring at least 12 investment ideas
2. All of Buck’s Special Investment Reports outlining special situations.
3. Real time email alerts when it’s time to sell
4. The peace of mind knowing that your retirement is secure

To sign up for Big Dividend Investor… and take action to start receiving massive dividend payments as soon as this month…

Click Here Now!!!

Buck Wilson

 

 

 

One of the biggest mistakes investors make when it comes to dividend investing is assuming that BIG dividends= GREAT dividends.

Dividends are paid based on cash flow. A company can sometimes pay out a dividend through financial innovation (issuing shares as dividends, etc.), but if you are looking for REAL income from your investments, you NEED the company to be producing CASH.

No cash= no dividends= no yield.

This is why dividend investing is a tricky business. You cannot simply assume that because a company paid out a big dividend before, that it will continue to do so.

Moreover, you don’t just want the dividend to be constant, you want it to GROW!

This is why I focus on a particular type of dividend paying investments… investments that GROW their dividend consistently over time… which I call “Low Risk Dividend Growers” or LRDGs.

Consider Exxon for example.

Exxon has increased its dividend for over 30 YEARS. Indeed, if you bought Exxon as late as 2000, you would be collecting a 7-8% yield today based on DIVIDENDS alone (share price in 2000 was roughly $32, and dividends paid in 2013 were roughly $2.50).

At the same time, your initial position in Exxon’s stock would have risen 400%!

So you’d have made 400% in capital gains… and would continue collecting 7-8% per year in dividends.

And the best part is… the dividend keeps growing!

This is how you get truly rich from investing. Find investments that are Low Risk Dividend Growers and HOLD ON for the long-term.

With my Big Dividends Investor newsletter, I show investors how to lock in BIG dividends for HUGE returns.

Already our two most recent picks are cranking out cash for our subscribers. One sports a massive 7% yield that is virtually tax free. The other pays out a whopping 12% dividend in monthly payments.

As a result, we’re crushing the market AND lock in massive dividend payments to secure their retirement.

If you’re an investor looking for a second stream of income to grow your wealth during retirement, you simply couldn’t ask for a better newsletter than Big Dividend Investor.

For just $99 a year, you get:

1. 12 issues of Big Dividend Investor featuring at least 12 investment ideas
2. All of Buck’s Special Investment Reports outlining special situations.
3. Real time email alerts when it’s time to sell
4. The peace of mind knowing that your retirement is secure

To sign up for Big Dividend Investor… and take action to start receiving massive dividend payments as soon as this month…

Click Here Now!!!

Buck Wilson

 

 

 

One of Warren Buffett’s greatest investment ideas concerned “economic moats.”

What he meant by this was to invest in companies with significant competitive advantage that stops competitors from breaking into their market share. These competitive advantages served as “moats” around these businesses, much as a moat of water would protect a castle from intruders in medieval times.

To consider how “moat” investing works in the real world, let’s consider McDonalds (MCD).

For starters, MCD has a moat. MCD was launched in 1940. Burger King was launched in 1953. Wendy’s was launched in 1969.

Despite these competitors moving into its space, MCD has thrived, growing to become the largest hamburger based business in the world: its 2012 revenues were $27 billion compared to Burger King’s $1.9 billion and Wendy’s $2.5 billion.

Today, MCD has over 34,000 restaurants based in 199 countries employing 1.8 million people. Obviously the company is able to defend its market share from competitors. That’s an economic moat.

Between this and the company’s focus on producing returns to shareholders, those who invested in MCD and held for the long-term have dramatically outperformed the market and built literal fortunes.

Indeed, had you in McDonalds in 1986, you would have outperformed the S&P 500 by a simply enormous margin (see Figure 1 below). Not only that but you would have crushed every asset manager on planet earth with very few exceptions.

Regarding returns to shareholders, MCD has paid dividends every year for 37 years and has increased its dividend at least once per year.

Dividends per share have increased from $0.11 in 1986 to $2.87 in 2012. Those who invested in MCD shares in 1986 are receiving a yield of nearly 30% per year on their initial investment today just from dividends alone.

MCD is so focused on producing returns for shareholders that the company has bought back 23% of its shares outstanding in the last ten years. So even investors who bought in 2000 have experienced a synthetic yield of roughly 5% per year.

However, the most dramatic returns produced by “moat” investing are evident through the power of compounding as illustrated by MCD’s Dividend Re-Investment Plan or DRIP (a plan through which cash dividend payouts were  automatically used to buy more MCD shares).

If you had invested in MCD’s DRIP program in 1988, you would have turned $1,000 into over $23,000 by the end of 2012. This is not by adding to your positions, this is the result of one single $1000 purchase of MCD stock.

This example of “moat” investing is precisely the kind of wealth generating investment that has made Warren Buffett a billionaire.

We invest solely in businesses with economic moats in our value investment newsletter Cigar Butts and Moats. And it has paid off BIG TIME.

Of the seven investments we’ve made in 2013, FIVE made money including gains of 6% (still open), 15% (still open) and 28% (closed in one month).

And because we’re focusing on these businesses as long-term investments, I have very little doubt that we’ll not only BEAT the market with them… but we’ll also outperform the vast majority of professional investors.

This is the beauty of investing in Cigar Butts and Moats: you have such a wide margin of safety that if a company temporarily trades down, you actually end up wanting to buy MORE.

To find out what these companies are all you need to do is take out an annual subscription to Cigar Butts & Moats.

The price of an annual subscription is just $79.99.

For that price you get:

• 12 monthly issues of Cigar Butts & Moats
• All of our Special Investment Reports outlining special investment opportunities you won’t hear about anywhere else.
• Real time investment updates as needed
• The investment knowledge to build a safe and stable retirement.

All of this for just $79.99

To take out an annual subscription to Cigar Butts & Moats…

Click Here Now!

Yours in Profits,

Graham Summers

Editor

Cigar Butts and Moats

 

 

… is making sure you get paid.

When you buy shares in a company, you want to make money.

However, there is no guarantee that the shares will rise in price. Indeed, if you are investing simply because you believe prices will rise, you are essentially betting that someone else will want to pay more for your shares at a later date.

No matter how much research you perform, there is no guarantee this will happen.

Dividends, however, DO make sure you make money. Because the company is actually paying you to own shares. And this makes a heck of a difference.

If you had invested $1 in stocks in 1950 and held onto your position until 2010, you would have made EIGHT TIMES more money through dividends than share appreciation.

Let me restate that: by receiving and reinvesting dividends you’d make 800% more money than without them between 1950 and 2010.

The difference is even more incredible if you go back further.

Historically dividends have accounted for 70% of all stock market gains.

According to a study performed by the London Business School, when you remove dividends, stocks have returned a mere 1.7% in average annual gains over the last 109 years. To put this into perspective, this is less than you’d make from owning long-term US Treasury bonds (2.1%) over the same time period.

Indeed, if you’d invested $1 in stocks in 1900 and reinvested your dividends, by 2009, you’d have made $582 (adjusted for inflation). Take out dividends and you’d have only seen $6 from price appreciation. Yes, $6 from 109 years’ worth of capital gains.

Put another way, by focusing solely on capital gains when it comes to stock investing you’re only doubling your money about every 18 years (remember, this analysis simply focuses on the returns generated by the market… which outperforms most professional and individual investors).

So unless you’re buying stocks with dividends, you’re likely not making diddly in the long-term.

Again, if you’re going to buy stocks… make sure you get PAID. And there’s no better way to do this than with dividends.

With my Big Dividends Investor newsletter, I show investors how to lock in BIG dividends for HUGE returns.

Already our two most recent picks are cranking out cash for our subscribers. One sports a massive 7% yield that is virtually tax free. The other pays out a whopping 12% dividend in monthly payments.

As a result, we’re crushing the market AND lock in massive dividend payments to secure their retirement.

If you’re an investor looking for a second stream of income to grow your wealth during retirement, you simply couldn’t ask for a better newsletter than Big Dividend Investor.

For just $99 a year, you get:

1. 12 issues of Big Dividend Investor featuring at least 12 investment ideas
2. All of Buck’s Special Investment Reports outlining special situations.
3. Real time email alerts when it’s time to sell
4. The peace of mind knowing that your retirement is secure

To sign up for Big Dividend Investor… and take action to start receiving massive dividend payments as soon as this month…

Click Here Now!!!

Buck Wilson

 

 

Over the last five years, the US Federal Reserve has substantially changed the investing landscape of the capital markets in the last 12 months. In particular we need to assess how ongoing QE programs affect notions of “risk” and rates.

In the period from March 2008 to late 2013, the Federal took a series of strategic steps to attempt to rein in the financial crisis and to support certain financial institutions that it deemed most critical to the health of the financial system.

These steps consisted of cutting interest rates to zero and engaging in rounds of Quantitative Easing, commonly referred to as QE.

QE in its simplest form consists of printing new money that is then used to buy US debt, called Treasuries. The Fed has made a myriad of claims for why it did this (to help housing, the help the economy, etc.) but the blunt reality is that this policy was primarily a means of financing the US deficit, which swelled in the post-2008 period as the public sector expanded rapidly in an effort to pick up the economic slack in the private sector.

The US went into the 2007-2008 Crisis with a national debt of $5 trillion and unfunded liabilities  (Medicare, social security) somewhere in the ballpark of $50 trillion. And as the debt ballooned in the post-2008 era due to Government spending, it became more and more important for the Fed to maintain low rates: any increase in interest rates would mean much larger interest payments on a rapidly growing debt load.

This is why the Fed has maintained near zero interest rates as the US nati0nal debt swelled to $16 trillion. It’s also why the Fed continues to engage in QE despite the clear evidence over the last four and a half years that it is not an effective tool for stimulating economic growth or a rise in employment.

Regarding this latter point, I want to draw your attention to the labor participation rate below. The official unemployment rate is highly charged politically as it is used by the media to gauge how well a particular administration is doing at generating job growth.

As such the unemployment numbers are routinely massaged to the point of no longer reflecting the true number of unemployed Americans. For this reason, I prefer to use the labor participation rate when gauging the health of the US jobs markets: this metric represents the number of Americans who are currently employed as a percentage of the total number of Americans of working age.

As you can see, the number of employed Americans of working age peaked in the late ‘90s. It has since fallen to levels not seen since the early ‘80s. Moreover, looking at this chart it is clear that job creation has failed to keep up with population growth.

This negates any claims of “recovery” in the jobs market.

In particular, I want to draw your attention to the last five years of this chart below. The US Federal Reserve began its first QE program, called QE 1, in November 2008. Since that time it has launched three other such programs, spending over $2 trillion in the process.

During this period, the labor participation rate has not once experience a sustained uptrend. Put another way, job creation has never outpaced population growth to the point of creating a significant turnaround in the jobs market. This has happened despite the recession officially “ending” in mid-2009.

The evidence here is clear. QE does not generate jobs in the broad economy.

Best Regards

Phoenix Capital Research

 

 

 

No doubt you have read the statistics over the years that perhaps only 30% of investment managers beat the market.  Even that statistic is misleading because of all the fees and taxes an investor should consider.

Mutual fund companies almost never warn you about your tax costs and also seek to hide performance lag.

Here is one example.  OppenheimerFunds Main Street Fund has about $6 billion in assets and the overall strategy we would estimate runs perhaps $20 billion under portfolio manager Manny Govil, who took over the fund in May 2009 after building a successful track record at other firms.

When you read their online materials the company will show returns that, on the surface, seem pretty good.  Comparing the fund to the S&P 500 would suggest Main Street fund delivered value, outperforming in 2009, 2010, 2012 and the first nine months of 2013.

If you are a taxable investor pay attention to the fact that 20% of your profits will go to the government.  This is also true if you select your own investments but unlike a fund you get to determine the timing of the tax liability.

Then you have the “marketing expenses.”   Oppenheimer will charge you 5.75% so they can pay the broker who sells you the fund on the front through its Class A shares.  Many people instead opt for a different share class that foregoes the upfront charge but has a “back end” load if you liquidate in the first few years.

Well, if you just hold it no problem, right?  Wrong!  If you opt for the no load route Oppenheimer will charge you 0.99% for “12b-1” fees instead of 0.24% as on the load fund.  Does this extra charge help you?  No.  They use it to pay their sales people to gather more assets on the theory that more assets will spread the costs wider.  Yet somehow the expense ratio on these funds will never go down.

In the end, even with an above average money manager like Manny Govil running this fund the average investor will lose about (3%) annually when all the costs are factored in.

Remember, keep your costs down and only pay for value.

And when it comes to value… we suggest looking for companies that pay you to own them with hefty dividends…

I call them Low Risk Dividend Growers or LRDGs. And they are the primary focus of my dividend product, Big Dividend Investor.

With interest rates at roughly 0% today, it’s absolutely critical to find investments that will show you a solid return on your money.

Companies can massage their earnings any number of ways… but dividends mean CASH IN HAND.

Consider my latest pick for Big Dividend Investor … if pays a whopping 7% dividend to investors. And because the payments are made monthly this is a literal second stream of income for investors.

And best of all, because of its corporate structure, this 7% yield is virtually TAX FREE.

THAT’s what I mean by Low Risk Dividend Growers.

So if you’re an individual investor who is looking for investment income, I highly recommend you give Big Dividend Investor a try. I’ve made investors hundreds of thousands of dollars in investment income over the last ten years… and I can do the same for you with a subscription to Big Dividend Investor.

All for the low price of $99.99.

To learn more about Big Dividend Investor and how it shows investors the most extraordinary dividends on the market…

Click Here Now!!!

Profitably Yours,

 

Buck Wilson

Last year was a blockbuster year for stocks, with the S&P 500 rising nearly 30%.

This was the single best year for stocks since 1997. We are literally back to “the good old days” for stocks.

However, a small group of investors saw a return that absolutely dwarfed this.

Indeed, if this groups of folks positively DEMOLISHED the S&P 500 for the year, with an incredible 194% RETURN ON INVESTED CAPITAL.

That is not a typo, nor is it based on some kind of cherry picking (pumping your winners and ignoring your losers). This group of folks nearly TRIPLED their money in 2013.

Indeed, using just $10K you could have grown your position into $29K using this ONE strategy.

See for yourself:

And here’s the crazy part… these investors did it this by making JUST ONE TRADE PER WEEK.

I know that sounds absurd. Most people believe that to make money in the markets you need to trade all the time and trade everything under the sun.

Not these folks. They made… 194% GAIN with just ONE TRADE PER WEEK.

And they didn’t trade ANYTHING ELSE.

The groups of investors I’m talking about subscribe to options trading system called OPTIONS 1-1-1.

OPTIONS 1-1-1 is a unique and insanely profitable system for trading options.

It only makes ONE TRADE… On ONE OPTION… ONCE PER WEEK.

Hence the name, OPTIONS 1-1-1.

Don’t let the simplicity fool you… most traders who make money even 51% of the time are considered geniuses…

OPTIONS 1-1-1 makes money 70% of the time.

And because we keep our losers as small as possible, we end up CRUSHING the market AND 99% of investing legends.

Indeed, in 2013, we saw a 194% gain. But we’ve seen even better years than that. In 2011 we were up over 220%!!!

Here’s how it works…

Every Tuesday morning, OPTIONS 1-1-1 sends you an email and text alert identifying your weekly trade.

We pick out the option for you, tell you what price to pay, and how long we’ll be holding the trade for.

All you have to do is enter this information into your brokerage account.

Then, when it’s time to sell, we send you another text and email telling you to sell your position and what price to sell it at.

That’s it.

We’ve made our subscribers tens of thousands of dollars with this system. And we’re inviting you to join us now… before our next trade goes out on Tuesday. There’s already a better than 70% chance it will MAKE a MAJOR profit.

OPTIONS 1-1-1

One Trade… One Option… Once Per Week = BIG PROFITS.

To sign up now…

CLICK HERE!!!

Graham Summers

Editor

Options 1-1-1

 

 

 

 

 

 

 

Today is the first day for market trading in 2014.

In the very short-term, financial institutions will be repositioning their portfolios to start the year. This will likely mean more buying power in the markets.

The markets have broken out of the large wedge pattern formed in 2011-2012 and are entering a blow off top.

Wall Street is decidedly bullish now. There is no telling how high this rally can go based on momentum. Manias are always more powerful than one expects. And this is nothing if not a mania (investors are buying stocks at a rate not seen since the Tech Bubble).

Investors who choose to ride this momentum should be cautious. The market is already overbought and overextended. If I were to liken it to anything it would be 1999. We all know how stocks did 1-2 years out from that.

And while the US is taking off, there are other, potentially much larger opportunities outside of it. Take a look at the emerging market space. We are on the verge of breaking out of a massive triangle pattern, much like the one formed by US stocks in 2011-2012.

If we do breakout of this pattern to the upside, the move could be extreme (possibly as high as 60).

I believe the biggest opportunities for investors will be outside the US in 2014. Now is the time to look for greater diversification.

Best Regards

Graham Summers