I know it sounds crazy, but it’s true. Investors are paying the U.S. Treasury to hold their money in exchange for participation in expected rapid inflation. Treasury Inflation Protected Securities, more commonly known as TIPS, are bonds backed by the U.S. government that protect against rapid inflation. TIPS pay interest like every other bond, except that the interest is tied to the consumer price index (CPI). If inflation rises—as measured by the CPI—then the holders of TIPS get a fixed rate of ...

A little stock market bounce-back is a welcome development. We likely won’t see any material new trend develop until second-quarter earnings season begins. Investment risk is still very high, but there is good news out there. In the continuing story of a strong retail sector, Ralph Lauren Corporation (NYSE/RL) announced excellent financial growth in its fiscal fourth quarter and management also announced a doubling of its quarterly dividend. When I read news like this, it bolsters my view that the U.S. ...

Gold has shown some good support and buying after recently declining below $1,550. The June gold remains extremely bearish on the charts and is searching for oversold buying support at around $1,500 to $1,525. So far we are seeing support emerge on weakness. I continue to like gold going forward given the possible exit of Greece from the eurozone after the failure to form a coalition government. New elections are set for June 17, but the uncertainty will be an overhang ...

After so many years mired in a weak global economy, many investors were hoping that 2012 was the year of the rebound. Not so fast, according to BHP Billiton Ltd. (NYSE/BHP). BHP recently announced that it was reducing the total amount of money spent on expanding production and developing mines, which it previously estimated would be $80.0 billion over the next five years. BHP is plugged into the global economy. It has access to many countries all over the world, getting ...

In the midst of the current market correction in the price of gold bullion, a Japanese pension fund, Okayama Metal & Machinery, is going to place 1.5% of its total assets ($500 million) in gold bullion-backed exchange-traded funds (ETFs) (source: Financial Times, May 16, 2012). This is the first time the fund has bought gold bullion in its history. The chief investment officer of the fund said explicitly that investing in gold bullion was meant to protect against sovereign risk. Historically, the $3.4-trillion ...

The stock market continues to be in correction mode and so are gold and oil prices. But, the trading action in the equity market isn’t that bad at all; the down days aren’t that pronounced and we’re seeing solid rebound days, which signals that buyers are definitely out there. Daily investor sentiment is no doubt affected by developments in the eurozone and I think it’s fair to expect things to get worse regarding the sovereign debt crisis. European policymakers are ...

Social media is hot and growing, but making money from it is another story. The much-anticipated and overly hyped initial public offering (IPO) of Facebook, Inc. (NASDAQ/FB) is set to roll in today, May 18, 2012, following the company’s road show that helped to drum up excitement and, in the process, drive up the offer price. My stock analysis is that Facebook is clearly the most hyped up issue since the debut of Google Inc. (NASDAQ/GOOG) in August 2004. The offering was ...

Technology stocks are in a constant battle for the wallets of consumers in the retail sector. The ecosystem built by Apple Inc. (NASDAQ/AAPL) through its “iOS” (operating system) has been a huge favorite with consumers in the retail sector. This uniform operating system is important for technology stocks, as it provides a consistent experience for consumers. Since the retail sector is so finicky, this consistent experience has generated a lot of support for Apple’s products. More control over an operating system ...