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  1. The Rundown on 3 Recent Dividend Hikes

    Video Reports

    Fri, 6 Mar 2015

    DividendInvestor editor Josh Peters sizes up dividend increases from Realty Income, Coca-Cola, and PSEG.

    realty income found at 0:23

    like taxes being a favorite topic, but an actual favorite topic. Glaser: [TICKER:O] Realty Income (O), one of your favorite companies, recently raised their dividend again. Was this expected or are you surprised at the size of it? Peters: The timing has been a little uncertain, which is uncharacteristic for [TICKER:O] Realty Income . It's a company that has been public since 1994. They typically raise their dividend four times a year. They pay it 12 times a year on a monthly basis. And you had a pattern where, typically, in the years where they show good growth in earnings--usually because they have a lot of profitable acquisitions that they have made--that they would produce a larger dividend increase in August. Well, after they had a new CEO come in,
  2. Are Investors Still Late to the Party?

    Video Reports

    Fri, 6 Mar 2015

    The gap between investor returns and average fund returns persists across most asset classes--but there is a bright spot, says Morningstar's Russ Kinnel.

    latin america found at 4:02

    prices plummeting. That hits a lot of emerging-markets economies, particularly those in Latin America . Benz: One area that we've been monitoring, in part, because the investor returns had recently looked quite poor has been the fixed-income
  3. The Lone Medalist Among Managed-Futures Funds

    Video Reports

    Thu, 5 Mar 2015

    Silver-rated AQR Managed Futures has performed well for investors over time and, unlike many of its peers, its fees are as advertised.

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    Jason Kephart: After three years of dismal performance , investors probably thought they were never, ever getting back together with managed-futures funds. But sometimes, the markets are going to hate, hate, hate, and these funds have shown they are pretty good at shaking it off. That's because they are trend followers. They use futures contracts to invest in trends going up and down, and they tend to perform at their best when markets are at an extreme, like in 2008. In 2014, the managed-futures category's average return of 10% was better than all other alternative categories, largely because they were able to take advantage of the collapse in oil . Investors need to be very careful when it comes to picking funds in the category, though, because some of these funds have nightmare fees that are dressed up as daydreams. That's because they are using total-return swaps to access the subadvisors. This means that the subadvisor's management fee and performance fee aren't included in the annual report net expense ratio . So, the fees are actually much higher than stated. [TICKER:AQMNX] AQR Managed Futures (AQMNX) is our one medalist in the category. Its fees
  4. 2 Utilities Stocks to Bookmark

    Video Reports

    Wed, 4 Mar 2015

    The regulated-utilities sector is significantly overvalued after 2014's monster gains, but investors looking for exposure should keep an eye on Southern Company and Duke Energy.

    southern company found at 1:07

    we highlight four, in particular, that are overvalued significantly. Two gas utilities, Piedmont Natural Gas (PNY) and [TICKER:WGL] WGL Holdings (WGL): We like them as companies, but the valuations are out of hand, trading over 20 times P/E and well over book value. The other two that we think are overvalued are [TICKER:CMS] CMS Energy (CMS) and American Water Works (AWK). Both have premiums that we don't think are deserved, based on the long-term growth prospects. We do think you should keep [an eye on] [TICKER:SO] Southern Company (SO) and [TICKER:DUK] Duke Energy (DUK). Both are stalwart, longtime companies in very good regulatory jurisdictions [and yield over] 4%. They trade right around fair value right now; but if the sector were to take a downturn, we
  5. A Low-Cost, Conservative Approach to Convertibles

    Video Reports

    Tue, 3 Mar 2015

    Even after a recent manager change, we still believe Bronze-rated Vanguard Convertible Securities is a solid, low-fee option for convertibles exposure.

    convertible securities found at 0:10

    to add low-cost, relatively conservative exposure to convertibles to their portfolio should consider [TICKER:VCVSX] Vanguard Convertible Securities (VCVSX). The fund has landed in the top decile of its category over the trailing 10 years,   and its 41-basis-point expense ratio is among the lowest in its peer group. Its Morningstar Analyst Rating was recently lowered to Bronze, primarily due to a manager change. Longtime manager Larry Keele will be retiring in June, and  Stu Spangler from subadvisor Oaktree Capital Management will be taking the helm. The new manager has been with Oaktree for nearly two decades, though he has no public track record managing money . At this point, there's no reason to believe there will be big changes to the fund's strategy , which has been fairly constant for 20 years. The value-oriented process tilts the portfolio toward balanced convertibles, though the team tends to hold a large allocation to nonrated issues. A quarter of the portfolio is generally allocated to foreign convertibles, a sleeve run by a separate global-convertibles team. All told, for investors looking for relatively conservative exposure to convertibles, [TICKER:VCVSX] Vanguard Convertible Securities remains a great, low-cost option.
  6. 12 Contrarian Fund Picks for Your IRA

    Video Reports

    Tue, 3 Mar 2015

    Morningstar's Christine Benz recommends these tried-and-true value-leaning stock funds, still-open foreign-stock favorites, and TIPS funds for investors who want to tilt against the grain.

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    something [in emerging markets]--ideally 10% or more. Stipp: And anytime you're looking overseas , currencies are another issue that you have to think about, and there have been certain strong currency trends happening recently. So, as I'm thinking about deploying money, how should I account for currencies? Benz: It's interesting. Our colleague, Kevin McDevitt, wrote a great piece talking about how much of the performance discrepancy between U.S. stock funds and foreign-stock funds really owes to the fact that foreign currencies have depreciated relative to the dollar. We've seen foreign markets actually go up at a time that foreign currencies have depreciated. So, I think for investors who want to be contrarian, they probably want to think about making sure that, if they are investing in a foreign-stock fund, that it's one of the unhedged funds--that it's one that's fully exposed to the fluctuations in foreign currency. Sometimes, that will work against you, as it has recently; but I think if you believe in reversion to the mean, that's probably not a bad way to position your portfolio, with at least some exposure to foreign currencies . Stipp: Let's talk about another asset class that has been troublesome for investors in recent times, and that's fixed income. If I want to be contrarian there, what should be on my radar? Benz: This is a tough spot because, by and large, most of the bond categories have performed pretty well. Even as stocks have outperformed , bonds have really done quite well for investors, too. One area I would say that contrarians might look at--and I highlighted this in a column I wrote a couple of months ago--would be the Treasury Inflation-Protected Securities space . This has been a category that a lot of investors have been fleeing, and it's easy to see why [because we] have
  7. Stage Is Set for Higher Wage Growth

    Video Reports

    Mon, 2 Mar 2015

    As employers continue to deplete the pool of available workers, labor scarcity will likely result in better wage growth in the U.S.

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    Roland Czerniawski: The Job Openings and Labor Turnover Survey is an important metric that can help us understand the underlying conditions in the jobs market, and it is commonly used by the Fed to measure the level of labor - market tightness. Today, we'll look at the trends in these numbers since 2001. The chart consists of three main categories . Job openings
    Then, the next recession in 2008 was much more severe for the labor market , and the subsequent recovery has been painfully slow. In early 2014, a breakthrough occurred, and the level of job openings took off, followed by nice improvements in new hires. The quits metric accelerated, too, but not nearly as much. Quits are especially indicative of labor - market strength, as workers tend to leave their jobs more often when the economy improves in order to pursue better opportunities. The chart
  8. Johnson: Labor Shortage Coming

    Video Reports

    Sat, 28 Feb 2015

    Demographic trends could lead to a shortage of workers in the coming years, potentially boosting the wages of some skilled positions but hurting corporate earnings, says Morningstar's Bob Johnson.

    wage growth found at 4:47, 6:19, 7:28

    have people who are worried about that as well. Glaser: Looking at wage growth , then: If we are going to see some scarcity or if we are beginning to see some scarcity, shouldn't we also be seeing wages go up? Have you been seeing any signs of that in the data? Johnson: The government data has not shown an acceleration in wage growth . When you look at it year over year, it's not the horrific number that everybody makes it out to be; but it's
    But certainly, Wal-Mart moving wages up is a positive sign for the wage - growth story, and I think that's certainly something we may see in other businesses. One of the other indicators that we have had
    little bit careful about what we wish for in terms of stronger wage growth . And the Fed looks at wage growth , and when that starts to really accelerate, that's when they are really going to begin to tighten. Glaser: Bob, I certainly appreciate
  9. 5 Best Practices for Limiting Your Tax Burden in Retirement

    Video Reports

    Fri, 27 Feb 2015

    A flexible withdrawal strategy, diversification across account types, and targeted Roth conversions can limit the tax drag for retirees, says Morningstar's Christine Benz.

    social security found at 6:08

    help you determine how you can keep yourself in the lowest possible tax bracket . I think when you step back, you realize just how many moving parts are in the mix. You've got RMDs; you've got deductions, which you may or may not be able to control. You potentially have subsidies under the Affordable Care Act that you may be eligible for. You've got Social Security and various elements of taxation that fall under that umbrella. So, a lot of moving parts. This is an area, I think,
  10. This ETF Takes the Euro Out of European Dividend Payers

    Video Reports

    Thu, 26 Feb 2015

    WisdomTree Europe Hedged Equity offers a high-quality portfolio of dividend-paying equities while hedging against currency risk.

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    Ben Johnson : Long Europe/short the euro has become a popular investment thesis in recent months. This reflects the fact that European equities are currently looking relatively cheap versus their U.S. counterparts. But it's also evidence of investors' desire to take the euro out of their European-equity exposure. [TICKER:HEDJ] The WisdomTree Europe Hedged Equity ETF (HEDJ) has mushroomed in size over the past twelve months as investors have piled on to this trade. Our preference for this fund over its peers--iShares Currency Hedged MSCI EMU (HEZU) and Deutsche X-trackers MSCI EMU Hedged Equity (DBEZ)--really boils down to a matter of index methodology. The index underlying the WisdomTree fund is a proprietary index--one that's based on
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