Navigating the ups and downs on Wall Street is no easy chore, even for�seasoned market veterans. So why do so many investors, especially self-directed ones, strive to time the markets when there is a plethora of evidence that suggests the odds are clearly against them?
The simple answer is greed and laziness; that is to say, countless�investors would prefer to pick and choose the securities that are poised to go up the most in a given year rather than roll up their sleeves,�do some good old fashioned research, formulate a long-term strategy, and be patient [see also Market Timing the Best and Worst S&P 500 Trading Days].
After all, would you rather sit and wait on your diversified portfolio to steadily increase in value over the course of many years, or would you rather use your crystal ball to cherry pick the best performing assets each and every year?
Why Cherry Picking Assets is Less than IdealDon’t even bother answering the last�question because the reality of the situation is that you don’t have a crystal ball (and neither does your financial advisor). Consider the table below (click to enlarge) compiled by the Novel Investor which showcases the annual returns since 2000 for a variety of major asset classes. More importantly, note the light gray box labeled “AA” in each year, which is representative of a well-balanced portfolio that is comprised of all the other assets that are listed:
Top 5 Safest Stocks To Buy Right Now: JPMorgan Chase & Co (AMJ)
JPMorgan Chase & Co. (JPMorgan Chase), incorporated on October 28, 1968, is a financial holding company. The Company is a global financial services firm and a banking institution in the United States, with global operations. The Company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. JPMorgan Chase�� principal bank subsidiaries are JPMorgan Chase Bank, National Association (JPMorgan Chase Bank, N.A.), a national bank with the United States branches in 23 states, and Chase Bank USA, National Association (Chase Bank USA, N.A.), a national bank that is the Company�� credit card-issuing bank. JPMorgan Chase�� non-bank subsidiary is J.P. Morgan Securities LLC (JPMorgan Securities), the Company�� the United States investment banking firm. The bank and non-bank subsidiaries of JPMorgan Chase operate nationally, as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. One of the Company�� principal operating subsidiaries in the United Kingdom is J.P. Morgan Securities plc., a subsidiary of JPMorgan Chase Bank, N.A. JPMorgan Chase�� activities are organized into four business segments, as well as Corporate/Private Equity. The Company�� consumer business is the Consumer & Community Banking segment. The Company�� wholesale businesses consists of Corporate & Investment Bank, Commercial Banking, and Asset Management segments. Effective January 7, 2014, JPMorgan Chase & Co acquired an undisclosed minority stake in Chi-X Global Holdings LLC.
Consumer & Community Banking
Consumer & Community Banking (CCB) serves consumers and businesses through personal service at bank branches and through automated teller machines (ATMs), online mobile and telephone banking.CCB is organized into Consumer & Business banking, Mortgage Banking (including Mortgage Production and Servicing, and Real Estate Portfolios! ) and Card, Merchant Services & Auto (Card). Consumer & Business Banking offers deposit and investment products and services to consumers, and lending, deposit, and cash management and payment solutions to small businesses. Mortgage Banking includes mortgage origination and servicing activities, as well as portfolios comprised of residential mortgages and home equity loans, including the purchased credit impaired (PCI) portfolio acquired in the Washington Mutual transaction. Mortgage origination channels consists of Retail, Wholesale, Correspondent and Correspondent negotiated transactions. Retail includes Borrowers who buy or refinance a home through direct contact with a mortgage banker employed by the Firm using a branch office, the Internet or by phone. Wholesale refers to third-party mortgage brokers loan application packages to the Company. The Company then underwrites and funds the loan. Correspondent includes Banks, thrifts, other mortgage banks and other financial institutions that sell closed loans to the Firm. Correspondent negotiated transactions include mid-to-large-sized mortgage lenders, banks and bank-owned mortgage companies sell servicing to the Firm on an as-originated basis (excluding sales of bulk servicing transactions). Card issues credit cards to consumers and small businesses, provides payment services to corporate and public sector clients through its commercial card products, offers payment processing services to merchants, and provides auto and student loan services.
Corporate & Investment Bank
The Corporate & Investment Bank (CIB) offers a suite of investment banking, market-making, prime brokerage, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, government and municipal entities. Within Banking, the CIB offers a range of investment banking products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity ! and debt ! markets, as well as loan origination and syndication. The Company also provides Treasury Services, which includes transaction services, comprised primarily of cash management and liquidity solutions, and trade finance products. The Markets & Investor Services segment of the CIB is engaged in cash securities and derivative instruments, and also offers risk management solutions, prime brokerage, and research. Markets & Investor Services also includes the Securities Services business, which holds, values, clears and services securities, cash and alternative investments for investors and broker-dealers, and manages depositary receipt programs globally.
Commercial Banking
Commercial Banking (CB) provides industry knowledge, and service to the United States multinational clients, including corporations, municipalities, financial institutions and non-profit entities with annual revenue generally ranging from $20 million to $2 billion. CB provides financing to real estate investors and owners. CB also provides financial solutions, including lending, treasury services, investment banking and asset management to meet its clients��domestic and international financial needs. Commercial Banking is divided into four client segments: Middle Market Banking, Commercial Term Lending, Corporate Client Banking, and Real Estate Banking. Middle Market Banking covers corporate, municipal, financial institution and not-for-profit clients. Commercial Term Lending provides term financing to real estate investors/owners for multifamily properties, as well as financing office, retail and industrial properties. Real Estate Banking provides full-service banking to investors and developers of institutional-grade real estate properties. Lending and investment activity within the Community Development Banking and Chase Capital segments are included in other.
Asset Management
Asset Management (AM) clients include institutions, high-net-worth individuals and retail investors. AM offe! rs invest! ment management across all major asset classes including equities, fixed income, alternatives and money market funds. AM also offers multi-asset investment management, providing solutions to a broad range of clients��investment needs. For individual investors, AM also provides retirement products and services, brokerage and banking services including trust and estate, loans, mortgages and deposits. The majority of AM�� client assets are in actively managed portfolios. AM�� client segments consists of Private Banking, Institutional and Retail. Private Banking offers investment advice and wealth management services to high- and ultra-high-net-worth individuals, families, money managers, business owners and small corporations worldwide, including investment management, capital markets and risk management, tax and estate planning, banking, capital raising and specialty-wealth advisory services. Institutional brings comprehensive global investment services including asset management, pension analytics, asset-liability management and active risk-budgeting strategies to corporate and public institutions.
Advisors' Opinion:- [By Jon C. Ogg]
The ETFs and funds held up on Monday:
JPMorgan Alerian MLP Index ETN (NYSEArca: AMJ) was down only 0.3% at $46.86, versus a 52-week range of $42.18 to $49.31. Volume was 1.1 million shares versus an average of about 628,000. ALPS Alerian MLP ETF (NYSEArca: AMLP) closed down 0.45 at $17.57, versus a 52-week range of $16.75 to $18.36. This ETF traded more than 3.1 million shares, up from an average of about 2.85 million shares. The closed-end fund of Kayne Anderson MLP Investment Company (NYSE: KYN) even managed to rise by 0.26% to $38.70 against a 52-week range of $33.11 to $40.22. Its volume was also almost 300,000 shares versus an average volume of closer to 218,000 shares.It still seems more than interesting that the investment community did not pound the rest of the sector in sympathy with Boardwalk. This Boardwalk MLP still has a $3.1 billion market cap, even after getting cut almost in half. Usually investors try to tie in peers when one implosion is seen versus others. It seems as though they are trusting that negative natural gas exposure here is not going to spill over into the rest of the sector, and maybe not even spill over into the price of units in its more direct peers.
- [By Robert Rapier]
The biggest problem with the fund is that while it yields an attractive 7.5 percent annually based on the most recent quarterly distribution, the total expense ratio is presently an astronomical 4.4 percent. This is bound to be a drag on performance over the long run (although it still potentially offers an attractive short-term play). As a result, my preference for a long term investment in and IRA would be to own an exchange-traded note (ETN) based on one of the Alerian indices that I reviewed recently in Navigating the Universe of MLPs. There are several to choose from, including the JPMorgan Alerian MLP Index ETN (NYSE: AMJ), which presently yields 5 percent and has an expense ratio of 0.85 percent.
Best Performing Companies To Own For 2014: J. W. Mays Inc.(MAYS)
J.W. Mays, Inc. owns and operates commercial real estate properties in the United States. Its properties are located in Brooklyn, Jamaica, Levittown, Massapequa, and Fishkill, New York, as well as in Circleville, Ohio. The company was founded in 1924 and is based in Brooklyn, New York.
Advisors' Opinion:- [By Geoff Gannon] is trading around book value your next step is to figure out how book value is calculated.
The reason a company trading below book value is interesting has to do with accounting. In the U.S., you don�� mark up the book value of land and many other potentially valuable assets just because you have evidence ��like an appraisal, comparable sale, etc. ��that the market value is now higher than your original cost.
So, there will be situations where knowing how a company accounts for its assets and knowing the stock trades for less than book value can help direct you to companies selling for less than they are worth.
DreamWorks is a movie studio. So it is using a rather subjective estimate of the ultimate revenue a movie will produce. It is then amortizing the cost of the movie as revenue comes in to the company in proportion to the percentage of revenue this represents relative to expected total revenue the movie will produce.
For very old movies, it�� actually a little different. And for flops it�� different. DreamWorks can write off flops. And it can�� expect the ultimate revenue for a movie to be higher to the extent such revenue comes more than 10 years after the film�� release.
In other words, DreamWorks has to fully amortize a movie within 10 years and disregard the value an 11-year-old movie might have.
This is explained in a note to the company�� 10-K. It is very important for Ben Graham-type investors to read all these notes carefully ��but especially the notes on depreciation and amortization:
Once a film, television special/series or live performance is released, capitalized productions costs are amortized and participations and residual costs are accrued on an individual title basis in the proportion that the revenue during the period for each title (��urrent Revenue�� bears to the estimated remaining total revenue to be recognized from all sources for each title (��ltimate Revenue��. The amo
Best Performing Companies To Own For 2014: Enbridge Inc(ENB)
Enbridge Inc. engages in the transportation and distribution of crude oil and natural gas primarily in Canada and the United States. Its Liquids Pipelines segment operates common carrier and contract crude oil, natural gas liquids (NGLs), and refined products pipelines and terminals. The company?s Gas Distribution segment distributes natural gas to residential, commercial, and industrial customers primarily in central and eastern Ontario, northern New York State, Quebec, and New Brunswick. Enbridge?s Gas Pipelines, Processing and Energy Services segment invests in natural gas pipelines, processing and green energy projects, and commodity marketing businesses, as well as performs commodity storage, transport, and supply management services. Its Sponsored Investments segment transports crude oil and other liquid hydrocarbons through common carrier and feeder pipelines, as well as transports, gathers, processes, and markets natural gas and NGLs; operates a crude oil and liqui ds pipeline and gathering system; and owns a 50% interest in the Canadian portion of Alliance Pipeline and partial interests in various green energy investments. The company was formerly known as IPL Energy Inc. and changed its name to Enbridge Inc. in October 1998. Enbridge Inc. was founded in 1949 and is headquartered in Calgary, Canada.
Advisors' Opinion:- [By Arjun Sreekumar]
Consider the rupture of an Enbridge (NYSE: ENB ) pipeline, which discharged roughly a million gallons of bituminous crude into Michigan's Kalamazoo River in June 2010. Though three years have passed, the cleanup effort still isn't over. Enbridge employees and state and federal environmental crews continue to test the river, where sheen and clumps of oil still linger. The company reported a 4% year-over-year decrease in its first-quarter net income, partially because of the escalation of cleanup costs related to the spill, which are now approaching a whopping $1 billion.
- [By Dan Caplinger]
The need for more energy infrastructure in the U.S. has become much greater in recent years, given booms in production in areas across the country. Through its Seaway pipeline joint venture with Enbridge (NYSE: ENB ) , Enterprise controls a key link between the Gulf Coast's major refining hub and the pipeline-network hub in Cushing, a small town between Oklahoma City and Tulsa.
- [By Aimee Duffy]
BP (NYSE: BP ) just announced it is getting out of the wind power game, and in fact big oil's green energy initiatives are pretty negligible at this point. It could be disheartening state of affairs, but luckily pipeline companies are stepping in and picking up the slack. In this video, Fool.com contributor Aimee Duffy explores Enbridge's (NYSE: ENB ) recent deal to buy into a wind project in Alberta, and reviews the alternative energy efforts already under way in the North American midstream industry.
Best Performing Companies To Own For 2014: Odyssey Marine Exploration Inc.(OMEX)
Odyssey Marine Exploration, Inc. provides shipwreck exploration services for use in insurance investigations, and search and recovery operations to governments and deep-ocean mineral exploration companies. The company?s shipwreck projects consist of various activities, including research and development, and search operations; archaeological excavation and recovery operations; and conservation, recording, and documentation. It also sells shipwreck findings, including coins and other mass-produced cargo, cultural collections, and replicas to collectors, museums, and other institutions. Odyssey Marine Exploration, Inc. was founded in 1986 and is headquartered in Tampa, Florida.
Advisors' Opinion:- [By Sean Williams]
Odyssey Marine Exploration (NASDAQ: OMEX )
I love a good metals play as much as any Fool around here, but Odyssey Marine is certainly not on the buy list. Odyssey Marine is a salvage company that searches for, recovers, and monetizes metals and minerals found on the ocean floor. Make no mistake about it, the job is as cool as it sounds; unfortunately, "cool" doesn't always translate into solid profits.
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