Posts Tagged ‘Dividend Paying Stocks’

Articles You Can Send to Clients (July 15, 2009)

Friday, December 18th, 2009

As prefaced in today’s newsletter:

During this period of heightened requirements for communications to your clients, keeping in touch with your network of clients and prospects is critical. While there is no substitute for one-to-one meetings and phone calls, weekly or periodic emails are an effective way of staying visible and developing frank and open discussions with both clients and prospects.

Starting today, and every Wednesday from today, as a service to you, we will be sending a listing of 3–5 articles from high value sources (e.g., G&M, WSJ, NYTimes) that you may use to send to your clients and prospects as part of your communications strategy. We will also include some helpful prefacing notes that you may use as well.

Keep in touch, and , by the way, if and when you find useful articles, we would be extremely grateful for your submissions.

Below is this week’s selection of articles that you can send to clients.

Here are three articles that I thought you might find interesting which discuss the economic outlook of Lakshman Achuthan, one of the foremost economists in the US, the outlook for stocks from the Wizard of Wharton, Jeremy Siegel, and an article from the Wall Street Journal about the opportunity in income/dividend paying stocks (as a general heading).

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The Recession is Over!
ECRI declares the recession over with the US economy tracking up to 2.4% in the third quarter…

http://www.slate.com/id/2222742/

Source: Slate.com/Washington Post

There is a great deal of skepticism about the economy, and many mixed offerings in terms of opinion on outlook. The Slate.com article, The Recession is Over!, discusses the contrasting view of Lakshman Achuthan, of ECRI (Economic Cycles Research Institute), one of the most highly regarded independent economists, known for a long list of accurate and prescient economic forecasts, who points out that three significant leading indicators are currently flashing green.

They’re (ECRI) the Spocks of the economic forecasting crowd—unemotional, uninvested in anything but the logic of what history and their dashboard tell them. “From our vantage point, every week and every month our call is getting stronger, not weaker, including over the last few weeks,” says Achuthan. “The recession is ending somewhere this summer.” In fact, it may already be over.

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Jeremy Siegel: ‘The Market Will Stage Another Recovery’,
Knowledge@Wharton, June 24, 2009

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2267

Jeremy Siegel, Wharton School Professor, Director of Wisdom Tree ETFs and author of the investing classic, Stocks for the Long Run, says that now that the recession will not turn into a depression call stocks are poised for a recovery.

Siegel: Well, of course, we had a tremendous downturn from January to March, a plunge. And we’ve had recovery back to those January levels, basically. So year-to-date, we’re sort of even on the market. Actually, in Asia, we’re well above it. Markets are about 20% higher than the year-end. For the emerging markets and the Asian markets, there’s been a much better recovery, because there’s been a better economic recovery.

It’s always very hard to predict the stock market. It’s certainly taking a breather now. I maintain that if we can keep oil at the $70 level, and if interest rates on long-term bonds, 10-year bonds, don’t go much above 4%, the market will stage another recovery that could bring it up another 15% to 20% — really, by year-end. It’s hard to know exactly when that will take place. But I think people really see [that] the recovery is coming. Again, just like they were relieved that, “Oh, it’s not a depression, it looks like it’s ending,” [they see] we are getting some recovery. I think if the [price of oil] and interest rates … remain stable and low, we will put more money in stocks. There’s still over $4 trillion in money funds that are earning about 1% or less, which is not as attractive as rates that I believe could be moved into the market, once prospects of the recovery seem more certain.

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Bright Outlook for Income Investors
July 4, 2009 — Wall Street Journal — By Tom Lauricella
Out of last year’s turmoil in markets a bright spot has emerged for investors looking for income — The payout on dividend-paying (or income-paying) stocks has gone up as a result of share prices falling further than payouts.

The main point of this article is that battered high quality dividend stocks as well as government bonds are now offering higher real rates of return as a result of inflation running at 2% or lower.

Yes, dividends may have plunged — but share prices have fallen further. Translation: The percentage payout of many dividend-paying stocks has actually gone up. Some traditional yield plays — such as utilities — look attractive. Bond funds, aside from U.S. government bond funds, offer other options.

And investors shouldn’t dwell too much on yields that seem low. What matters is how they compare to inflation.

“When investors see a yield of 4% or even 3.5%, it looks like a low-yield investment,” says Fran Kinniry, head of the investment strategy group at Vanguard Group. “But with inflation running at 2% or lower, the yields on fixed income or even equities aren’t that poor.”