International Dividend ETFs Yielding 6%

Investors on the prowl for income might want to consider dividend ETFs for international markets that are yielding 6% or more.

“Even though the yield on the 10-year Treasury bond has fallen from its near 3% level this week, many overseas securities still yield far more than 3%, making them potentially appealing for U.S. income seeking investors,” said Todd Rosenbluth, S&P Capital IQ Director of ETF Research, in a recent note.

ETFs in the international dividend category include First Trust Dow Jones Global Select Dividend Index Fund (FGD).

“Among the numerous benefits of ETFs is that they offer exposure to a wide range of stocks with a common investment theme and at a low cost. Of course not all holdings of dividend ETFs will be the same, since they seek to track different indices, and as such, the ETFs will have different country and sector exposures,” Rosenbluth wrote.

FGD, sponsored by First Trust, was paying a 30-day SEC yield of 6.38% at the end of August.

First Trust Dow Jones Global Select Dividend ETF seeks to track a Dow Jones developed market index that is constructed using companies that have provided relatively high dividend yields. For inclusion, a company must have increased its dividend compared to its last three year average and there’s also a focus on the company’s dividend payout ratio. FGD has an above-average 12-month yield of 5.0%, and while it has 19% of its assets in U.S stocks, companies domiciled in Australia, United Kingdom, France and Canada are also well represented. From a sector exposure perspective, Telecom Services, Industrials, and Financials stocks have the largest weightings.

Source:  John Spence, ETF Trends

First Trust Dow Jones Global Select Dividend Index Fund (FGD).is a component of the D2 Capital Management Multi-Asset Income Portfolio.

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

Market-Beating ‘Dividend Dogs’ ETF Attracts More Investors

A specialized dividend Exchange Traded Fund (ETF) that’s beating the S&P 500 this year saw record trading volume on Tuesday and what appears to be a rather large inflow.

Over 650,000 shares of ALPS Sector Dividend Dogs ETF (SDOG) traded on Tuesday, nearly double the previous volume record.

The benchmark selects stocks from the S&P 500. At the annual reconstitution, the index identifies the five highest-yielding stocks in each of the 10 sectors of the S&P 500. It is rebalanced on a quarterly basis to maintain 10% in each sector, and 2% in each of the 50 stocks.

The fund is up 25.9% year to date, compared with a gain of 20.9% for the S&P 500, according to Morningstar.

Source:  John Spence, ETF Trends

ALPS Sector Dividend Dogs (SDOG) is a component of the D2 Capital Management Multi-Asset Income Portfolio.

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

All Eyes on the Fed... Then Congress (Market Outlook)

By Russ Koesterich, BlackRock Chief Investment Strategist

Market Outlook

The Road Will Get Rockier - Last month, we warned that volatility was likely to rise into September from the summer's more placid levels. The Federal Reserve (Fed)'s surprise September no-taper announcement removed some risk of near-term volatility and took some pressure off rate-sensitive assets. But market volatility is likely to pick up in coming weeks as investor attention shifts toward budget debates in Congress and the uncertainty surrounding the next Fed chair, geopolitical instability and global economic growth.

Though Stocks Can Still Move Higher - While stock gains are likely to remain muted for the remainder of 2013, we expect that the global economy will continue to improve, and global stocks will finish 2013 higher. In addition, stocks still appear reasonably priced relative to bonds and cash.

Supported By Continued Monetary Stimulus - The Fed isn't tapering for now, confirming that the recovery is still fragile. Absent a pickup in jobs growth, we believe that monetary policy will remain accommodative in the United States, as well as in Japan, for the remainder of the year. In addition, because of numerous factors conspiring to keep a lid on rates, we believe that rates will only moderately rise in coming years, though a "taper lite" could still be announced as early as later this year or early next year.

Higher Oil Prices Could Change Our Expectations - While it now seems that a strike in Syria may be avoided, should the violence in the Middle East escalate, higher energy prices could impede the global recovery.

For Now, Investors Should Prepare Portfolios for More Volatility - We generally advocate diversifying portfolios globally and considering more global segments of the US market such as US mega caps. We also like energy companies, which can potentially act as a hedge against Middle-East induced market volatility.

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

Investors can't stop kicking themselves

Investors have been their own worst enemies since the financial crisis.

Investors are notoriously bad market timers, and over the past five years, it has cost them a chance at actually beating the market.

Heading into the financial crisis, investors in the 10 biggest large-cap mutual funds had the best chance of outperforming the S&P 500 over the next five years, provided that they actually stayed invested the whole time. Of course, hindsight is 20/20, and none of them could have known it at the time, so it shouldn't come as a surprise that most didn't stick it out.

Over the five-year period ended Aug. 31, which includes the collapse of Lehman Brothers Holdings Inc. in 2008, the S&P 500's 42% free fall to the bear market's bottom and its subsequent 130% rally, five of the 10 biggest large-cap-stock funds posted better annualized returns than the benchmark.

Just 37% of all large-cap-stock funds can boast the same, according to Lipper Inc.

The average investor return, which takes into account buying and selling behavior, for all but one of the funds was much lower because investors were busy selling, according to Morningstar Inc.

For example, the average investor return for Fidelity Contrafund over the five-year period was just 6.16%, more than a full percentage point lower than its actual return, according to Morningstar.

The investor returns underscore that patience is one of the most important qualities that financial advisers must have when using actively managed funds.

Finding a good manager, with a repeatable process, that doesn't charge outrageous fees is only half the challenge when using actively managed mutual funds. Sticking with a manager through down years may even be the biggest challenge.

Source:  Jason Kephart, Investment News

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

Distractions to your Investment Plan

If you read and listen to various newscasts, you'll be barraged by stories that either tell you or imply you take action regarding your investments. Here are some real examples:

• The stock market has been up over the last several years, is it time to sell?
• The DOW was down 300 points today and 401k accounts will take a plunge.
• Mutual funds you must own now.
• How to make $1 million dollars.
• Unemployment is at an all-time high and the businesses are suffering.
• The stock market is down XX% after the housing bubble popped.

These messages plant a seed in our minds to take some kind of action. They play on emotions and emotion is the enemy of investing. The media are about marketing; getting you to watch, listen or read. To achieve their mission, they want you emotionally involved. Emotion is never a basis for taking investment action. With the right strategy, none of this matters and taking action is not necessary or desirable.

The news is about news worthy events. By the time an investment topic is news worthy, you are too late. All the important aspects of the investment opportunity happened when it wasn’t newsworthy.

Another issue to consider is that when investments or markets are news worthy, the hucksters come out of the woodwork. Sales people want to capitalize on your new found knowledge and sell you the investment. Run the opposite direction.

Source:  Shane Ostrum, CFP

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

The Fed’s Tapering Catch-22

So much for tapering talk. The Fed surprised the markets by continuing its program of $85 billion per month of purchases of US Treasuries and mortgage-backed securities.  But the lack of tapering represents a missed opportunity to begin what will eventually be required. Tightening financial market conditions –the rise in interest rates following the Fed’s May-June comments on tapering –appear to be the reason for yesterday’s surprising decision to defer the moderation of purchases.

Clearly the Fed signaled the concerns it has with higher mortgage and interest rates – parts of the tightening in financial market conditions. The Fed understands that the economic recovery is relying on interest rate-sensitive segments of the economy and is being held back by the narrowness of job and income growth. Financial market conditions – rising housing and stock markets – provide the main source of support for the recovery in the form of supporting a wealth-induced incentive for spending. That spending comes about as consumers are saving less – not through rising incomes. And that leaves the economy too vulnerable to financial market conditions a point central to our year end rate expectations and underscored by the Fed’s actions Wednesday.

What should investors expect? Now that the Fed has pushed expectations for low rates out yet again, the performance of equities should do well in such an environment, but their long-run results will be challenged – much as they were in May and June – if and when the Fed decides it is time to try another go at exiting its program.

Source:  Jeffrey Rosenberg, Managing Director, BlackRock Chief Investment Strategist for Fixed Income

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

Active High-Yield Bond ETF Outperforming

An actively managed ETF for high-yield bonds that has been outperforming its index-linked rivals this year saw heavy inflows Wednesday after the Federal Reserve decided not to taper its bond and mortgage purchases.

AdvisorShares Peritus High Yield ETF (HYLD) has posted a total return of about 9% year to date and it is currently yielding 8.01% (as of 19 September 2013)

HYLD has grown to about $338 million of assets since launching in November 2010.

Bond ETFs rallied Wednesday as interest rates dropped sharply in the wake of the Fed’s no-taper decision.

Source:  John Spence, ETF Trends

Peritus High Yield ETF (HYLD) is a component of the D2 Capital Management Multi-Asset Income Portfolio.

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

High Dividend Stocks - The Solution to FED Tapering?

Comment:  Although Federal Reserve "tapering" has been postponed, forward planning can produce desired investment results.

Dividend-paying stocks have recently been dragged through the mire, sliding steeply after a strong rally, due to rising speculation that the US Federal Reserve will curtail its program of "quantitative easing" and thus unleash interest rates for what's sure to be-at least in many investors' minds-a straight-up climb from here.

The crux of the concern is that dividend-paying stocks' relative attractiveness compared to risk-free assets such as US Treasury bills, notes, and bonds will disappear, as the latter's rate of return goes higher and closer to historic norms.

Traditional bond buyers who were driven into equities because risk-free vehicles were yielding less-or at best only slightly more-than the rate of inflation, may herd back into Treasuries now that market rates may no longer be compressed by the actions of an interventionist Fed.

But the recent sell-off presents an opportunity to establish positions in essential-service utility companies, master limited partnerships, and select, high-dividend-paying stocks.

You can take comfort that, historically, dividend-paying stocks have outperformed non-dividend-paying stocks. According to research compiled in a May 2013 white paper by Goldman Sachs Asset Management, since 1926 dividends accounted for more than 40% of the return of the S&P 500.

Dividend-paying stocks have outperformed non-dividend paying stocks on a total return basis. And they've done so with less volatility. Companies that have been able to raise or to begin paying dividends had even higher total returns and lower volatility than the broader dividend-paying group.

Dividend growers and initiators generated a long-term annual total return of 9.55% from January 1972 through December 2012.

All dividend-paying stocks have generated a long-term annual total return of 8.76%. The S&P 500 Total Return Index' annual total return for the comparable period is 7.05%.

Rising interest rates often follow inflation. And, crucially in this context of fevered worry, dividend growers have historically enjoyed a strong track record as interest rates rise. With less volatility than non-payers, dividend-paying stocks have outperformed over each of the last seven interest-rate tightening cycles.

Source:  David Dittman, Investing Daily

Dividend paying stocks are the primary investments in D2 Capital Management's Multi Asset Income and High Dividend Portfolios.

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

Average Certificate of Deposit Interest Rates

The average yield on six month "Jumbo" certificates of deposit, which typically require deposits of $95,000 or more, remains at 0.15%.  A $100,000 six month jumbo CD would deliver $75 in interest.  The yield on five year jumbos is 0.80%.  A $100,000 five year jumbo CD would deliver $4081 in interest.

The average yield on six month small denomination "savings" CDs is 0.14%.  A $10,000 six month savings CD would spin off $7 in interest.  The average two year yield remains at 0.35% ($70 in interest on $10,000) and the five year savings CD is 0.78% ($397 in interest on $10,000).

Source:  Wall Street Journal

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

Women Need Advisors' Guidance Before Divorce Strikes

Women need to be part of the financial planning during their marriage so they're prepared to deal with a lack of money if a divorce throws them out on their own.  This is especially true for older women.

“The most important thing women should think about is becoming more involved in the financial conversation before there is any sign of divorce,” says Laura Pilz, vice president and financial advisor at Merrill Lynch Wealth Management.

The issue of finances after divorce is becoming more important to older women as rate of divorce grows. Divorce rates for women over 50 years of age have doubled in the last 20 years to one in four—a trend that has become known as the "graying of divorce," according to a recent study by the National Center for Family and Marriage Research at Bowling Green State University.

“Women still defer to men in many instances when it comes to family financial planning and investments, even if they handle the checkbook for daily expenses,” Pilz says. “If there is a divorce, they are playing catch up.”

Women are frequently faced with debts they did not know existed after a divorce, including property loans and tax liens. The debts can put a dent in the money the woman thinks the family has and they can affect the lifestyle of the two individuals who emerge from the divorce proceedings.

“Some women feel they are guaranteed a lifestyle similar to what they have been living in marriage,” Pilz says. “In reality, they are guaranteed only a lifestyle similar to what the husband ends up with.”

A divorce means supporting two households on the same income that previously supported one household. There may be some money for an ex-wife who is over 50 from alimony payments, but there likely will not be child support because the children are probably grown.

Both members of the former couple will be facing retirement, if they're not already in it, and neither has much time to shore up a retirement account, so extra caution needs to be taken with any retirement funds that they split.

Social Security is gender blind as far as how it assigns benefits, but the woman in a divorcing couple often has a lower earnings record on which her retirement payments are based.

“What a lot of women do not know is that they may be entitled to spousal benefits through their ex-husbands, who may be the higher earners. Advisors should always counsel women to take advantage of these benefits if they have the opportunity,” Pilz says.

Pilz also advises women to keep their assets in their own name rather than putting their husband’s name on them at the time of marriage. That way, the assets are theirs if there is a divorce.

“Even in community property states, the woman can keep assets she brought to the marriage if she keeps them in her name,” Pilz says.

“Women need to be realistic about what they have. They can’t remain in the dark and assume the comfortable life they had in marriage is going to continue,” she adds.

Source:  Karen Demasters, Financial Advisor Magazine

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

Investment advice with an Oil Change? (Not!)

Daniel J. McLellan of Sandwich, Massachusetts has been charged with defrauding an East Sandwich woman who had invested money with him on promises of guaranteed returns.

While working at a Jiffy Lube in Mashpee, McLellan met a woman who was having her car serviced. At some point, they discussed the stock market, and he later identified himself as a broker with a nonexistent firm.

Ultimately, the woman gave him $50,000, and McLellan “retained a significant percentage of those funds for his personal purposes."

On March 30, McLellan told the woman that he had lost all her money.

According to the State of Massachusetts complaint, “He deposited the remaining funds into his personal brokerage account and, primarily as the result of his trading them on margin, subsequently lost the money in the market over a six-month period.”

The Massachusetts Securities Division is seeking an accounting and compensation to the investor for losses resulting from the wrongdoing.

Source:  Boston.com

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

The New Dow Jones Industrial Average

Since its inception in 1896, the Dow Jones Industrial Average has served as a barometer of the U.S. stock market by tracking a select group of the country's industrial leaders. Earlier this week, S&P Dow Jones Indices announced that  Visa,  Nike and  Goldman Sachs will replace  Hewlett-Packard,  Alcoa, and  Bank of America in this iconic index, effective Monday, Sept. 23. Because the index weights its constituents by their share price, rather than by market capitalization, these changes will have a significant impact. Both Visa and Goldman Sachs currently trade above $150, which will make them two of the index's top three holdings. They will also help take some of the weight out of  IBM, which currently represents more than 9% of the index. In contrast, the three departing stocks account for less than 2.5% of the index combined.

Price weighting is a relic from the 19th century that was adopted primarily because limited computing power made alternatives impractical. This simple price averaging approach that gives higher-priced stocks larger portfolio weights does not have a sound economic basis.

The index construction methodology does not follow mechanical rules, so there are no firm guidelines dictating how or when the committee overseeing the index will pick new constituents.

Although price weighting leaves something to be desired, the Dow tracks a fairly diverse set of top-quality companies that approximates the industry composition of the U.S. stock market.

Source:  Morningstar

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.

Financial fraud is rampant but most people can't spot it

Most people in the United States have been targeted by financial fraudsters, while nearly half are unable to spot classic red flags of fraud.

For example, more than 40% of people surveyed for the Financial Fraud and Fraud Susceptibility in the United States report, which was released today, found an annual return of 110% for an investment to be appealing, while 43% felt that way about “fully guaranteed” investments.

“These outsized returns are highly improbable, as are any sort of guaranteed returns,” said Gerri Walsh, president of the Finra Investor Education Foundation, which issued the report.

“Bernie Madoff was offering guaranteed returns of 12%, which isn't even an outsized number,” Ms. Walsh said. “But the market conditions didn't matter. He was offering consistent annual returns.”

The survey found that more than 80% of respondents had been solicited to participate in potentially fraudulent financial schemes, while 40% could not identify some classic red flags of fraud.

The large share of Americans still attracted to persuasive conmen doesn't shock Ms. Walsh. What was more surprising to her was the extent to which defrauded investors underreported their status as victims.

Although 11% of respondents said they lost money when they were prompted by specific types of schemes (such as e-mail scams and free-lunch sales pitches), only 4% admitted to being a victim of a fraud when asked directly. “That's an estimated 60% underreporting rate,” she said.

Of those who admitted to being defrauded, 45% reported the fraud to someone, but the remainder found reasons not to. Among those who chose not report, the most common reason was, they didn't think it would have made a difference, followed by not knowing to whom they should turn. Embarrassment also played a key role in underreporting, according to the survey.

Though the report points to the elderly as easy targets for financial scams, the group willing to take the most risk in hopes of higher returns is well-represented among younger males with high income and education levels.

Source:  Michael Shagrin, Investment News

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.