Power resides where men believe it resides. Its a trick a shadow on the wall and a man is small but can project a very long shadow.

What's my marginal tax rate? Steve Kim, an equity-derivatives analyst at Merrill Lynch, has closely studied the past performance of stable-growth stocks. Kim compared the returns of the 500 largest-capitalization companies with a portfolio of stocks with the lowest volatility in earnings in the food, drugs, and tobacco industries. His research showed that the stable-growth stocks outgained the 500 large caps by 2.25 percent a year from January 1970 to February 1996, with only slightly more risk. If you and your spouse have $98,000 a year in combined income, you may think that you're in the 31 percent federal tax bracket. The reality is more complex: you pay a 31 percent federal income tax only on the last $1,100 you earn. In fact, your marginal tax rate is 31 percent, but most of your income is taxed at 15 percent or 28 percent. And there's the rub. In today's market, investors who seek stable-growth companies for their dependability and strong relative performance have to pay a premium for their shares. And when companies with high valuations fail to meet investors' expectations, their share prices can fall fast and hard. Consider what happened to Campbell Soup earlier this year: On January 11 the world's largest soupmaker announced that an unusually warm winter had slowed sales, sending Campbell shares down 13 percent in that day's session. The U.S. economy may not have to nosedive for stable-growth stocks to come back in vogue. A slight change in investors' perception could do the trick. The economy grew 3.8 percent in 1997 and 4.1 percent last year. Most Wall Street economists expect about 2.5 percent growth this year. Though this is a reasonable level by historical standards, it could be enough of a change to alarm investors. Chicago Fed president Michael Moskow refers to this possibility as the Sammy Sosa syndrome. "For years, Sammy Sosa hit 30 to 40 home runs, a good performance," Moskow said in a speech this January. "Last year, he hit 66-an extraordinary performance. If he hits 40 this year, some will say he had a bad year. It's a case of unrealistically high expectations."




Despite the risks that accompany high valuations, there are compelling reasons to include stable-growth stocks in a portfolio. These stocks have outperformed the market over long periods; they deliver better returns than any other type of stock during an economic slowdown; and since they're companies worth holding on to, a portfolio of stable-growth stocks typically requires little trading activity, a distinct advantage for taxable accounts. This is important information for any investor-even someone who never ventures into the stock market. Why the turnaround in investor attitude? Low unemployment, minimal inflation, solid wage growth, and a friendly stock market all combined last year to fuel consumer spending. Whether that trend will continue is a hotly debated point; indeed, many economists now view the consumer as a wild card. If the stock market fails to shower investors with double-digit gains, Americans might make fewer trips to the mall, dampening economic growth. Why the turnaround in investor attitude? Low unemployment, minimal inflation, solid wage growth, and a friendly stock market all combined last year to fuel consumer spending. Whether that trend will continue is a hotly debated point; indeed, many economists now view the consumer as a wild card. If the stock market fails to shower investors with double-digit gains, Americans might make fewer trips to the mall, dampening economic growth.

Safety with highest priority !

Gold trading

Gold Chart

Dax trading

People think Im disciplined. It is not discipline it is devotion. There is a big difference.

The U.S. economy may not have to nosedive for stable-growth stocks to come back in vogue. A slight change in investors' perception could do the trick. The economy grew 3.8 percent in 1997 and 4.1 percent last year. Most Wall Street economists expect about 2.5 percent growth this year. Though this is a reasonable level by historical standards, it could be enough of a change to alarm investors. Chicago Fed president Michael Moskow refers to this possibility as the Sammy Sosa syndrome. "For years, Sammy Sosa hit 30 to 40 home runs, a good performance," Moskow said in a speech this January. "Last year, he hit 66-an extraordinary performance. If he hits 40 this year, some will say he had a bad year. It's a case of unrealistically high expectations." If you and your spouse have $98,000 a year in combined income, you may think that you're in the 31 percent federal tax bracket. The reality is more complex: you pay a 31 percent federal income tax only on the last $1,100 you earn. In fact, your marginal tax rate is 31 percent, but most of your income is taxed at 15 percent or 28 percent. Various statements made by Vajpayee and President Abdul Kalam show that this will be done by lowering drastically the interest burden on the public debt by refinancing loans at lower rates of interest; by rationalising the tax system and introducing a nation-wide, uniform Value Added Tax and, regrettably, by making further drastic cuts in the central government's Plan expenditure. He is also likely to signal profound structural reforms that will simplify bureaucratic procedures drastically at every level of government, lower and retarget subsidies better, and take up the so far utterly neglected areas of health care, education, shelter, sanitation unemployment insurance and old age insurance in partnership with the private sector. Moreover, when Kim measured the return of stable-growth stocks and the broader market in different phases of the economic cycle (recession, recovery, and expansion) during the 26-year time frame of his study, the results were impressive. Stable-growth stocks had higher returns than the 500 largest stocks during periods of recession and expansion. In fact, the only time these stocks trailed the broader market was during times of recovery, when investors chased companies more likely to profit from an expanding economy.

Silver trading

Dow jones trading

Focus on return on investment not earnings per share

The 98-year-old retailer has seen its earnings increase in each of the past 24 years. In the past five years, the company's earnings per share have nearly doubled. No wonder investors have flocked to Walgreen, sending its stock up 88 percent last year; during the past decade, shareholders have earned about 30 percent annually. Walgreen's stock traded at 56 times earnings in early February, a multiple 66 percent higher than the average Standard & Poor's 500 stock, which itself carries near-record price-to-earnings ratios. Despite the risks that accompany high valuations, there are compelling reasons to include stable-growth stocks in a portfolio. These stocks have outperformed the market over long periods; they deliver better returns than any other type of stock during an economic slowdown; and since they're companies worth holding on to, a portfolio of stable-growth stocks typically requires little trading activity, a distinct advantage for taxable accounts. The 98-year-old retailer has seen its earnings increase in each of the past 24 years. In the past five years, the company's earnings per share have nearly doubled. No wonder investors have flocked to Walgreen, sending its stock up 88 percent last year; during the past decade, shareholders have earned about 30 percent annually. Walgreen's stock traded at 56 times earnings in early February, a multiple 66 percent higher than the average Standard & Poor's 500 stock, which itself carries near-record price-to-earnings ratios. Perhaps that last $1,100 of your $98,000 income is investment income that you don't currently need. If so, you might reduce your marginal tax rate to 28 percent by switching from that income-paying investment into a growth investment that generates minimal dividend income, like an equity index fund. You wouldn't owe taxes on the increase in the value of your index fund shares until you sold them-at which point, if you'd held the fund for a year or more, you'd owe a long-term capital gains tax, now capped at 20 percent.

Natural gas trading

  • Forex trading platforms
  • Forex trading tools
  • Forex investment solutions

Id rather be a failure at something I love than a success at something I hate

The U.S. economy may not have to nosedive for stable-growth stocks to come back in vogue. A slight change in investors' perception could do the trick. The economy grew 3.8 percent in 1997 and 4.1 percent last year. Most Wall Street economists expect about 2.5 percent growth this year. Though this is a reasonable level by historical standards, it could be enough of a change to alarm investors. Chicago Fed president Michael Moskow refers to this possibility as the Sammy Sosa syndrome. "For years, Sammy Sosa hit 30 to 40 home runs, a good performance," Moskow said in a speech this January. "Last year, he hit 66-an extraordinary performance. If he hits 40 this year, some will say he had a bad year. It's a case of unrealistically high expectations." The U.S. economy may not have to nosedive for stable-growth stocks to come back in vogue. A slight change in investors' perception could do the trick. The economy grew 3.8 percent in 1997 and 4.1 percent last year. Most Wall Street economists expect about 2.5 percent growth this year. Though this is a reasonable level by historical standards, it could be enough of a change to alarm investors. Chicago Fed president Michael Moskow refers to this possibility as the Sammy Sosa syndrome. "For years, Sammy Sosa hit 30 to 40 home runs, a good performance," Moskow said in a speech this January. "Last year, he hit 66-an extraordinary performance. If he hits 40 this year, some will say he had a bad year. It's a case of unrealistically high expectations." And there's the rub. In today's market, investors who seek stable-growth companies for their dependability and strong relative performance have to pay a premium for their shares. And when companies with high valuations fail to meet investors' expectations, their share prices can fall fast and hard. Consider what happened to Campbell Soup earlier this year: On January 11 the world's largest soupmaker announced that an unusually warm winter had slowed sales, sending Campbell shares down 13 percent in that day's session. Smart Questions to Ask Your Financial Advisers Smart Questions to Ask Your Financial Advisers And there's the rub. In today's market, investors who seek stable-growth companies for their dependability and strong relative performance have to pay a premium for their shares. And when companies with high valuations fail to meet investors' expectations, their share prices can fall fast and hard. Consider what happened to Campbell Soup earlier this year: On January 11 the world's largest soupmaker announced that an unusually warm winter had slowed sales, sending Campbell shares down 13 percent in that day's session.

Real Time Economic Calendar provided by Investing.com.