Removing Legal Uncertainties Is Good for Business – and Shares

Investors don’t like it when a company has a legal problem hanging over it. That’s because the court system can take time, and considerable amounts of money, to fend off a legal battle. Resolving a legal issue can lead to a rally in the short-term, even if there are big costs involved. That’s because taking the uncertainty off the table is good for shares looking forward over the long term. Discover Financial Services (DFS) just reported that they had to address shortcomings ...
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Time to Buy Great Companies at a Decent Price

When the market is selling off, investors will often go to cash first and then wait for the all-clear. That can result in missing out on the start of the next rally. An alternative strategy is to buy great companies once they reach a good price. It doesn’t have to be the best price, as an industry leader can recover from a market selloff and move higher over time. With the markets fearful of a government shutdown, defense stocks have been trending ...
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Invest In Companies Providing Services You Can’t Avoid

The investment world is full of products and services. Many are essential, such as food and gasoline. Others are more discretionary, like airfares and vacation destinations. When the economy gets uncertain, however, consumers tend to pull back spending on discretionary items and focus more on staples. Those staple goods and services cost more these days. While that’s unfortunate as a consumer, it could be beneficial to shareholders who buy at a reasonable price. One essential for consumers soaring in price today is ...
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Follow this Stock’s Trend, Not Its Current News

Some companies are starting to struggle right now amid the costs of rising interest rates. Other companies are faring much better, as there are strong long-term trends behind them that can help them move forward in time. Even though some companies are warning on short-term pain, those who see big potential moves ahead could still deliver great returns for patient investors amid this latest market selloff. For instance, chipmaker Micron (MU) is reporting that business is in a slump. And that their ...
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In Rough Markets, Look for Winning Trends

The market’s selloff in the past week has been extreme in its speed and severity. But investors in some sectors have been hit harder than others. Knowing where to look for winning long-term trends can lead to better performance during a market selloff. It may not always mean making a profit, but it could mean losing less. And over time, as stocks trend back higher, it could mean outperforming the market. Before the recent selloff, sports gambling stocks were riding high. They’ve ...
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Buy the Sector That’s Quietly Rallying Now

The past few weeks have seen investors sour on technology stocks. However, it’s normal in any market for a sector that’s been the runaway winner to take a breather. When that happens, other sectors tend to shine. With some fear in the markets, defensive areas such as utilities and consumer goods have been holding up. But one sector is also performing well that looks bullish for the economy next year. That is the commodity space. The headline winner has been oil prices, ...
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Buy Turnaround Plays When They Prove They Can Turn Around

On Wall Street, traders are often attracted to “turnaround” stocks. These are companies that have fallen on hard times. But, they have a plan to right what went wrong. That sounds well, and can often attract investors in a stock that looks like a value. But not all turnaround stocks are able to turn things around. That’s why investors should wait for signs a turnaround is succeeding. It may cost some profits, but it increases the chances of keeping a profit. Regional ...
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Higher Fees Mean Higher Profits for the Right Companies

No matter how you slice it, companies need to make a profit. That means they need to make money even after all the costs of business. So when those costs rise, so do the prices consumers pay. It can also mean changing returns for investors. For instance, investors in a franchise need to have deep pockets to invest. Most franchise companies require an up-front financial commitment. Increasing those fees is a sign of higher profitability for the management company. After 30 years ...
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