Welcome to today’s live chat about investing in 2013! It’s our first live Q&A of the year, so we look forward to taking your questions.
Hi everyone. Glad you can join us
Thanks, Manny. Glad you made it! :)
Alright, well then let's go ahead and get started.
Maybe that overstates it a tad. I'd say moderately upbeat, or as the folks on Wall St might say, "constructive"
We think that once Washington gets its act together that a lot of uncertainty will be lifted. Companies will start focusing on their businesses again, and the economy should pick up steam. But that's not to say we won't see a lot of volatility--I think that we will.
Right now DC seems to be the big concern
Absolutely...so folks should be prepared to stomach a lot of volatility in the months ahead, particularly during the upcoming debt ceiling negotiations?
But generally, stocks are still the place to be?
Plus, the market's done pretty well--up 15-16% last year and off to a good start this year--wouldn't be surprised if it took a breather--and I really don't think it can go anywhere definitively until we get some certainty on all of the fiscal questions being discussed--and that's a generous term-- in Washington.
What else is new? Seriously, volatility is part and parcel of investing in stocks. And, truth be told, you don't hear that many complaints about volatility when the direction of the market is up
Stocks are the place to be. And interestingly, even though they were the place to be last year, too, a lot of people didn't believe it and missed some good gains. But bonds carry a lot of risk right now, and the outlook for corporate earnings, which ultimately drive stocks, is, as Manny would say, constructive.
The thing to keep in mind is that the market is reasonably valued and that the economy is growing and that bodes well for corporate earnings. Economy should get a nice lift from the recovery in the housing market
A generous term indeed, Anne.
Not moi. It's the geeks on the Street who like "constructive" :)
You know, underlying this discussion is, what are the alternatives
It sure isn't money-market funds, T-bills or CDs. And after a 30-year-plus bull run, there aren't that many bargains in the bond market, either. Sheesh, you can't get much more than 5% from a junk bond fund
Yes, Manny. I'm sure some of our viewers are asking that same question.
We actually have a question from Paul touching on that topic.
But if you step back from the mess in Washington, you can spot some bright spots. Manufacturing has been strong and should continue strong. Economies overseas are recovering and that bodes well for companies with a multinational presence. Dividends are growing and companies are sitting on a treasure trove of cash that they'll put to work
Thanks, Anne. Something positive for investors to focus on.
Dividend stocks in particular are very popular right now...one of our readers has a question about that, which we'll get to in a moment.
Also, don't be afraid to explore some dividend-paying stocks. For instance, dividend yields are higher than corporate bond yields in many cases these days.
Interesting. Definitely something to keep in mind, Anne.
For starters, you want to stay away from Treasury bonds. That's kind of a no-brainer. You can get slightly higher returns from investment-grade corporates, but not all that much--maybe 4% from BBB-rated bonds, something less from a fund that focuses on the lower run of the investment-grade part of the bond market. And then there are junk bonds and emerging-markets bonds. To be perfectly truthful, all of my bond money is in junk funds, emerging-markets funds, multi-sector funds and one floating-rate note fund. Of course, I'm probably a bit more aggressive than the average investor, but I'm 62 so it's not like I have a 40-year horizon
You never know, Manny....
Thanks, Manny. Always enjoy your personal insights/experiences.
Reminds me of Satchel Page's autobiography. It was called "Maybe I'll Pitch Forever"
:) Alright, let's go ahead and take our next question from KMM
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