Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

investment strategy

Drop in This Company’s Stock Price Makes It Very Attractive Now

By | August 6, 2014

Top Company for Dividend ReinvestmentJohnson & Johnson (JNJ), which is one of my favorite long-term stocks for income and dividend-reinvesting investors, just dropped below the $100.00-per-share level and is becoming more attractive each day.

This stock has been doing extremely well over the last few years and should continue to do so. The position has been a worthy buy when it’s down and according to its recent trading history, it typically isn’t down for … Read More

Simple Wealth-Creating Strategy for Long-Term Investors

By | July 14, 2014

Compounding Strategy Every Investor Should ConsiderAs a strong believer in the wealth-creating effects of large-cap, dividend paying stocks, I’m also an advocate of dividend reinvestment, which is the purchasing of a company’s shares using the cash dividends paid.

This can be done commission-free from your broker and/or through the company itself if it offers such a program.

Dividend reinvestment is a powerful wealth creator if you do not require the income paid out by a … Read More

How to Put Your Assets to Good Use in a Stalling Market

By | June 20, 2014

How to Profit in a Stalling MarketThe stock market appears to want to go higher, but it’s going to take a push by investors. While we could see the S&P 500 edge higher, I’m not convinced the gains will be that great unless the underlying stock market fundamentals improve.

I am talking about the economic renewal that appears to be stalling. The International Monetary Fund (IMF) slashed the country’s estimated gross domestic product (GDP) growth to … Read More

Fear of Stock Market Declining Almost Non-Existent

By | June 4, 2014

Complacency of Investors Near Record LowThere’s one long-term investing adage that has shown a great amount of success over the years: buy when everyone is fearful and sell when optimism is over the top. This theory worked extremely well when key stock indices fell to their lowest levels. It worked in 1987, in 2000, and then in 2009—three of the greatest times to buy stocks in history.

With this in mind, take a look at … Read More

My Simple, Safe Investment Strategy for Playing Risky Stocks

By | April 11, 2014

Here's a Strategy to Play Momentum Stocks While Limiting RiskThere’s some hand-holding required out there in the stock market. We have seen destruction in the momentum biotech and Internet stocks that have corrected by more than 30%.

Now we are hearing some analysts on Wall Street saying to jump back in—but I’m hesitant at this juncture, as the downward risk is likely not over yet.

The reality is that, given the superlative gains recorded in 2013 by many of … Read More

Time for Investors to Create an Exit Strategy?

By | March 25, 2014

Should You Be Considering an Exit Strategy at This TimeWe have Russia annexing Crimea from Ukraine and interest rates set to float higher sometime in early 2015, but the S&P 500 continued to edge up to another record-high on Friday.

Federal Reserve Chair Janet Yellen is continuing to pull back on the quantitative easing that the former chair, Ben Bernanke, put in place. By year-end, the bond buying will likely be eliminated as the central bank allows the economy … Read More

Strategies for Defending Your Portfolio in a Down Market

By | February 5, 2014

What Investors Can Learn from the Super BowlIf you watched the boring Super Bowl game on the weekend, you’d have realized that a strong and superior defense can go a long way against a sound offense. But the battle in the trenches was easily won by the defense, and it’s an analogy I use in my trading strategy.

January ended on a sour note, being the first down month since August 2013. With the losses, we are … Read More

Stock Market: The Great Collapse Back to Reality Begins

By | January 30, 2014

The Great Collapse Back to Reality Begins“The trade” was very easy to do not long ago. Anyone with the basic knowledge of how money flows could have done it and profited.

Of course, I’m talking about the Federal Reserve “trade.” The investment strategy was straightforward: borrow money at low interest rates in the U.S., then invest the money for higher returns in emerging markets and bank the difference. If you could borrow money at three percent … Read More

Proactive Approach Is Key to Investing in This Stock Market

By | November 14, 2013

investment strategyImagine letting a losing trade run, and before you even realize it, the position is down 20%, 30%, or more. Your $10.00 stock declined 30% to $7.00; you decide to hold the position, hoping for a rebound, but deep down you know the stock would need to rally more than 40% just for you to break even. Clearly, it’s not easy when a stock falls to greater depths.

But that’s … Read More

Stock Advisors Saying Buy Eurozone Stocks; Here’s Why It’s a Bad Idea

By | November 4, 2013

There have been many instances when the adage “buy when there’s blood on the street” has turned out to be the best investment strategy. March of 2009 was one great example of this—there were not a lot of stock advisors saying buy stock back then as panic had set in. In the midst of this panic, the greatest buying opportunity was born.

These days, I hear stock advisors saying companies … Read More

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