WSJ: So You Found a Warrant in Your Mutual Fund?

By SIMON CONSTABLE

Occasionally, when you look through a mutual fund’s holdings, you’ll come across securities called warrants. What are they, and why would anyone want them?

Warrants are almost identical to stock options. These securities allow the holder to buy a company’s stock at a predetermined price, called the strike price, for a set period. If the stock’s price rises above the strike price, the warrant holder can purchase shares at a below-market price. See original story here.

Barron's: How Pimco is Wading into Stocks

By SIMON CONSTABLE

The trickiest part of investing—and the most important—is determining the right mix of stocks and bonds. When investors think of Pimco, it’s usually with regard to the bond side of its portfolio. Yet its stock funds have done remarkably well.

Enter the $820 million Pimco Dividend and Income Builder fund (ticker: PQIZX). This three-year-old fund is a hybrid stock-bond fund. Despite the considerable experience his firm has in fixed-income investing, manager Brad Kinkelaar runs a fund (with three other managers, including the firm’s new chief investment officer, Dan Ivascyn) that’s heavily skewed toward stocks—its target mix is 75% equities, 25% bonds. “It could be confusing,” he says. See original story here.

MarketWatch: The Price of Dumb: $15 Trillion

By SIMON CONSTABLE 

We all know there’s a price for being dumb. The problem is quantifying it. 

But now some researchers have an estimate of the cost of America’s failure to make the grade in the classroom. It will cost the U.S. economy close to $15 trillion through the year 2050. 

That’s trillion, with a T. It’s enough money to wipe out nearly all of America’s debt. Read more here.

Photo by Ivan Aleksic on Unsplash

WSJ: The Food Stamps-Beer Connection

By SIMON CONSTABLE

It’s a strange trend, one that could be significant to policy makers: When monthly food-stamp distributions fall on a weekend, beer sales to that population jump – by up to 7%.

According to a new study, the day of the week food-stamp funds are distributed seems to be influencing monthly beer sales among the population eligible for the benefit. The findings were released in a paper this month by Elena Castellari and Chad Cotti of theUniversity of Connecticut, and the University South Carolina’s John Gordanier and Orgul D. Ozturk. See original story here.

United States Department of Agriculture, Public domain, via Wikimedia Commons

WSJ: What is a Secular Bull Market?

By SIMON CONSTABLE

Lately, there has been a lot of talk about a “secular bull market” for stocks. It definitely sounds promising. But what exactly does it mean?

In short: It describes a long-term bull market.

“Think about a halcyon economic situation that keeps corporate profits high and extends for a long time,” says Jeremy Hill, managing partner at New York-based asset-management firm Old Blackheath Cos. At such a time, stocks have the wind at their back, with solid economic growth driving higher and higher earnings. However, during the long life of a secular bull market, stocks occasionally will fall back before resuming their climb, Mr. Hill says. See original story here.

WSJ: Where to Exit the Market Herd

By SIMON CONSTABLE

Going with the crowd might have helped in high school, but it’s not necessarily a good investing tactic. With that in mind here are three contrarian investment plays.

Europe’s a Mess, So Invest There

With few exceptions (the United Kingdom being one) the European Union is looking weak. The specter of deflation looms across the continent, a phenomenon of falling prices that cripples growth. On top of that, unemployment remains high and terrorists recently attacked the heart of France. See original story here.  

Photo by British Library on Unsplash

WSJ: What the ‘January Effect’ Means. It’s Not the Same as the ‘January Barometer.’

By SIMON CONSTABLE

During the first month of the year you may hear stock traders talk about the “January effect” and the “January barometer.” They sound similar, but they’re actually different.

The barometer tells you that if stocks are up in January, then the rest of the year should be good for stocks, says Sam Stovall, U.S. equity strategist at S&P Capital IQ. It’s a rule of thumb that has proved remarkably accurate. Since 1945, in years when the market was up in January, 84% of the time it continued rallying through the end of the year, with an average additional gain of 11.5%, says Mr. Stovall. See original story here.

Photo by Maddi Bazzocco on Unsplash