Hopscotching The Investment Media
We read in Kiplinger's Personal Finance that closed-end bond funds offer several advantages over regular bond funds. They may borrow money at short-term rates to invest in long-term securities. That adds risks but it usually pumps up a fund's income. Closed-end funds may trade at a discount to net asset value (NAV), effectively raising the yield to investors who buy at the right time. In addition, closed-end managers do not have to hold low-yield cash to meet redemptions, so they can invest all their money in higher-yielding bonds. Today, some closed-end muni funds yield over 5%, tax exempt, while taxable closed-ends yield as much as 8%.
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Forbes magazine reports that supply and demand might push oil prices down and result in $1.95-per-gallon in 2007. The recent four-year surge in oil prices has been due largely to one-time transient events from Venezuela to Iraq to China to Nigeria to hurricanes in the U.S.. During the price run-up, industry spending on exploration soared and new oil is now coming from many places around the world, from Argentina to the U.K.. On the demand side, growth has moderated because of higher oil prices and economic slowdowns. The increasing dividend payouts by ExxonMobil and BP indicate that they see less profit in exploration because prices will be falling.
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In Business Week, it talks about how investors are discovering innovative ways to use exchange-traded funds (ETFs). If you are concerned about falling real estate prices, for example, you might sell short the iShares Dow Jones U.S. Home Construction ETF. You'd make a profit if those shares were to fall in a weak housing market. In another tactic, suppose you are planning a trip to Italy next summer but think the dollar will fall against the euro in the interim. You might invest in the Euro Currency Trust ETF, which effectively lets you buy euros at today's prices.
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Smart Money magazine mentions that large companies often use spin-offs to shine light on an attractive piece of the business that's getting lost in the big picture. Typically, shareholders of the parent company are given shares of the spin-off as a dividend. Over the long haul, spin-offs generally perform well because the leaner structure of the newly formed company usually means more efficient management. Also, spin-offs can be under appreciated because professional investors need to sell shares that don't fit into their overall portfolio strategy.
It should be noted that a study of 25 years' worth of spin-offs found that shares of the new companies outperformed the market by 33% during their first three years of independence.
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Forbes magazine reports that supply and demand might push oil prices down and result in $1.95-per-gallon in 2007. The recent four-year surge in oil prices has been due largely to one-time transient events from Venezuela to Iraq to China to Nigeria to hurricanes in the U.S.. During the price run-up, industry spending on exploration soared and new oil is now coming from many places around the world, from Argentina to the U.K.. On the demand side, growth has moderated because of higher oil prices and economic slowdowns. The increasing dividend payouts by ExxonMobil and BP indicate that they see less profit in exploration because prices will be falling.
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In Business Week, it talks about how investors are discovering innovative ways to use exchange-traded funds (ETFs). If you are concerned about falling real estate prices, for example, you might sell short the iShares Dow Jones U.S. Home Construction ETF. You'd make a profit if those shares were to fall in a weak housing market. In another tactic, suppose you are planning a trip to Italy next summer but think the dollar will fall against the euro in the interim. You might invest in the Euro Currency Trust ETF, which effectively lets you buy euros at today's prices.
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Smart Money magazine mentions that large companies often use spin-offs to shine light on an attractive piece of the business that's getting lost in the big picture. Typically, shareholders of the parent company are given shares of the spin-off as a dividend. Over the long haul, spin-offs generally perform well because the leaner structure of the newly formed company usually means more efficient management. Also, spin-offs can be under appreciated because professional investors need to sell shares that don't fit into their overall portfolio strategy.
It should be noted that a study of 25 years' worth of spin-offs found that shares of the new companies outperformed the market by 33% during their first three years of independence.
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posted by Bob Moser at
6:22 PM
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