Renowned investor Jeremy Grantham, Chief Investment strategist of Grantham, Mayo, and van Otterloo makes the case for investing in resource equities. He suggests valuations are hovering near historic lows relative to the broad market, and when resource equities have been cheap relative to the broad market historically, they’ve performed quite well going forward. Yet investors are wary of investing in commodity producers due to the commodity price risk and the always uncertain commodity outlook. He tells us that long-term investors willing to tolerate that shorter-term risk should strongly consider whether they have allocated enough to this exciting and unloved segment of the market.
Roth IRA’s are some of the last truly tax-free investments you can make. Unlike traditional IRA’s, where your earnings are taxed as income, earnings in a Roth are completely tax-free. That’s the good news. The bad news is, not everyone qualifies to be able to contribute to a Roth. For 2016, if your file your taxes as single, you can make a full contribution up to $5,500 per year ($6,500 over age 50) if your modified adjusted gross income (MAGI) is less than $117,000, and a partial contribution if your MAGI is between $117,000 and $132,000. If you file taxes jointly, you can make a full contribution if your
We spotted a fascinating research report on dividend yield and how companies with high expected yields typically do not return anything near the expected rate and the actual returns are much less. Many investors reach for yield and the data suggests the best position for expected yield to match realized dividend yield is between 3% to 5%.