Bank Stocks

Bank stocks are the cornerstones of an investment portfolio for many investors. That’s because people and businesses rely on the banking industry in order to keep the economy running.

But not all bank stocks are created equal, as was evidenced after the recent financial crisis. Between 2008 and 2014, more than 500 U.S. banks were forced to shut their vaults.

To prevent a similar event from happening again, banks with assets of more than $10.0 billion must now undergo a regular stress test. Stress tests are a regulatory tool used, in the U.S., by the Federal Reserve to measure a bank’s ability to withstand a crisis. The more capital a bank has, the less it relies on borrowed money, a source of funding that can evaporate in a crisis.

If the bank’s capital falls below a certain threshold—it fails the test and has to take immediate action to make up the necessary capital. Those that fail the stress test cannot increase their dividend payments or initiate share repurchase programs. Most importantly, banks that fail the stress test are seen as risky investments.

Passing the stress test, on the other hand, bolsters confidence in bank stocks. In fact, bank stocks with solid underlying financials can be some of the best long-term plays.

Some of the strongest bank stocks in the world are outside of the U.S. In North America, Canadian banks dominate, taking positions one through six. The top publicly traded Canadian bank stocks include: The Toronto-Dominion Bank (NYSE/TD), Royal Bank of Canada (NYSE/RY), Bank of Nova Scotia (NYSE/BNS), Bank of Montreal (NYSE/BMO), and Canadian Imperial Bank of Commerce (NYSE/CM).

3 Top Bank Stocks to Watch in 2015: JPM, BK, WFC

By Monday, August 10, 2015
Bank Stocks to Watch in 2015The U.S. banking industry is expected to benefit from the long-awaited interest rate hike. But not all of them could translate it to profit and reward their shareholders. Banking profits soared nearly seven percent in the first quarter of 2015 compared to the same period of time in 2014. The majority of banks reported higher earnings .

Stock Market Analysis: Bullish for Bank Stocks

By Friday, May 29, 2015
Bank StocksI’m not sure if you noticed, but the big banks and bank stocks are back as attractive investments for both income investors and those looking for more conservative capital appreciation potential, as backed up by my stock market analysis. If you were one of the astute investors who accumulated big banks stocks after the collapse.

U.S. Banks Start Charging Clients for Large Cash Balances

By Monday, December 15, 2014
U.S. Banks Start Charging ClientsYou may remember an article I wrote in June of this year (we got lots of comments on it) about my Dad receiving a letter in the mail telling him that if the cash portion of his stock brokerage balance fell below $125,000, he would be charged a yearly fee of $500.00 to keep his account open. (See “About That Letter My Dad Got in the Mail Friday.”).

With Higher Interest Rates Coming, This Is Where You Need to Be

By Thursday, June 27, 2013
With Higher Interest Rates Coming, This Is Where You Need to BeWe all know that interest rates are eventually heading higher. It might be in 2014, but more likely not until 2015, when the unemployment rate can decline to 6.5% as the Federal Reserve believes. But one thing for sure is that interest rates are headed higher. (Read “Small-Cap Stocks the Place to Be—If Economic Growth Is Real.”) .

2013 Could Be Another Big Year for Banks

By Monday, January 7, 2013
Another Big Year for BanksThe major bank stocks all closed off 2012 near their respective 52-week highs. An upside break appears to be in the works, as the banking industry continues to assume less risky businesses, while shoring up their balance sheets and producing stronger units. The subprime credit crisis that surfaced in 2008 and drove the U.S. and the global.

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Subject: Gold: The Stock Contrarian Investors’ Best Play of the Decade

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