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. ...

Europe is an ocean away, but it’s literally in our backyard as far as the impact from its credit crisis and it doesn’t appear to be going away anytime soon. Greece can’t even elect a coalition government to deal with the tough austerity measures that the previous government agreed to in order to receive a second tranche of emergency funds. Another election is set for June 17, 2012, to try to form a government. Failure to do so or to meet ...

Following research I did on Caterpillar Inc. (NYSE/CAT) back in March, which culminated in the article, Caterpillar’s Cracks Indicate an Economic Slowdown. I said that, at that point in time, the stock was priced for perfection. If one had an investment strategy that incorporated technical analysis along with fundamental research, it was evident that the stock was due for a pullback. At the time of the article, the stock was trading at $109.00; with the current price being approximately $92.00, ...

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 ...

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 ...