If you do not have time to read the entire report, I’d highly recommend you at least skim over the report.  The visuals are helpful in summarizing and communicating the main observations.

In next month’s edition of TheMarketCapitalist.com newsletter I will be discussing how you may need to adjust your investment strategy in light of the information contained in these and other reports.

http://www.frbsf.org/publications/economics/letter/2011/el2011-26.html

http://www.scribd.com/doc/81556120/7754802-Cs-How-Demographics-Affect-14-Feb-1

The AMC Network (AMCX) was spun off from Cablevision last year. Until the last few months the stock has traded in the 30′s and now it has risen into the 40′s. The stock is poised to continue its run because of a specific even that is occurring. On March 25th AMC will premiere the first episode of Mad Men’s 4th season.  The season will span 13 episodes and will most likely draw higher ratings than the previous seasons and further intrench the show into popular culture.  All this means more profits for the network.

If you wish to learn more about how popular the show is click here.

Last year I released an investing e-book titled, Event Driven Investing. The example of Mad Men plays nicely into the strategy I outline in the book. This event is known, but not something that all investors are aware of already. As the premier approaches more chatter will be made and thus more eyes will be focused on AMC as an investment.

To learn more about event driven investing and how you can profit from the strategy, Event Driven Investing – Increasing Returns and Lowering Risk on the Road Less Traveled is available now for the very affordable price of $3.99.

Disclosure: No Position

What I’m seeing is a trend where the market can be flat or down, while certain stocks actually go up.  They’re bucking the trend.  Why is this occurring?  The first question I would ask is what type of stocks are we talking about?  Are they the same type of stocks and, if so, what characteristics do they exhibit?  They are all value stocks that pay sizable dividends.  The dividends are seen to be very stable or stable and growing.  These are stocks that I would use as my more conservative equity bets.  In the case of this group of stocks, if the market falls, I still will receive a dividend and ride out the storm knowing that a temporary set back in share price does not mean all is lost.

I’m concerned that the ‘odd’ behavior I’ve seen on multiple occasions is the behavior of a large amount of investors repositioning their portfolios to ride out what they believe is a coming market downturn.

My conclusions might be totally off base, but even if my observation is correct, the behavior of a certain group of investors does not mean they know the future.  Yet, the market is driven by the supply and demand of investor money.  People can become spooked for correct or incorrect reasons.

If you’re an investor that has seen significant gains since the fall (season), it might be a good time to consider taking a profit.  It’s hard to call a market top, but it’s easy to execute a trade and lock in a profit.  Don’t be a pig.

What you will find inside….

• In what remote area of Asia is a huge natural resource boom occurring & how to gain exposure to this growth story
• An updated model portfolio with a new stock added
• What Trust has recently been released with a +10% annual dividend yield that is expected to grow throughout 2013
• How to ask yourself “What matters most?” when considering changing your financial habits

The unemployment numbers gave life to financial markets on Friday as many investors saw this increase in jobs as a sign that we might finally be turning a corner in terms of our fiscal condition.  Making such an assumption from the newly released data might be correct, but I think we should not become overly elated.

The reason for my reservation comes from the fact that we are still 5.6 million jobs down from where we were in 2007. This is a sobering fact.  We came down from a peak and we are still far from making it back to the level we were once at.

Secondly, the pool of people on the job market is larger than it was in 2007.  Yes people have retired, but people have also graduated from high school and college.  A mass exodus of the Baby Boomer generation has not happened from the workforce…yet.

Lastly, though we reached a peak of sorts in 2007, it was an inflated peak.  A large part of the growth experienced in the last decade was concocted through loose lending and questionable fiscal engineering.  If we are to get to the position we were previously in it will now take more effort.  Creation of products and services that are actually of value will have to be at the forefront of the recovery, since credit markets have come down from the cloud they were riding a few years ago.

The world has not changed overnight or over the last month.  I’m still cautious.

In this turbulent market the spotlight has been recast on dividend-centric stocks. These stocks are from companies with stable business models who pay sizable dividend yields that have continued to grow overtime. As an investing class, they are seen as largely “value” stock and are often prescribed for the more conservative investor.

Whether you are that conservative investor that gravitates toward value stocks or some other type of an investor, the dividend driven value stock sector of the investment universe should interest you. Why? This investment realm should be of interest because a major demographic shift is in the process of occurring in which dividend driven value stocks will become the life blood for a huge class of investors.

Demographic shifts have consequences from the types of goods and services people make to the type of investments people enter into. As the Baby Boomer generation transitions into the time of their retirement, the reliance upon dividend income will become more significant than ever.

Stable, sizable and regular income payments will be needed by a growing pool of retirees. Thus, demand for such stocks will rise throughout this decade.

Looking at a recent McKinsey Institute report titled, The Emerging Equity Gap, the institute foresees a future environment where raising capital through equity offerings will become increasingly more expensive for businesses. This consequence will occur because large amounts of wealth will not be focused on equity driven investments, but debt driven instruments, such as bonds.

Why does McKinsey foresee a favoritism of debt over equities? First, the shift transition of a large amount of the current working population into a state of full or semi retirement will cause personal and pension investments to be geared towards investments which are more secure and make regular payments. Bonds (debt) issued by private or public organizations is a tool that fits the need. In general equities do not. Yet, certain areas of equities do fulfill the need for stability and consistent cash distributions (dividends).

While I agree with the conclusions made the McKinsey study, I must add that all equities are not equal. Different classes will be treated differently because of the nature of the investment.

Equity offerings will become more expensive because companies raising capital through equity are usually those that are in growth mode. Value stocks are not known for raising capital through massive equity offerings and often offer dividend yields that are comparable or superior to bond yields.

Forget about the notion that McKinsey noted regarding equity offering becoming more expensive. The point to take away is that a huge class of investors is transitioning towards investments that provide a revenue stream. Value stocks that have a history of paying sizable dividends fit that need.

As we move into 2012 and throughout the decade, it would be prudent for investors to begin at least by identifying, if not investing in, value stocks that have shown characteristics of price stability, consistent dividend payments and dividend appreciation. Such characteristics will bode well as more retirees look to establish a steady income stream to support themselves in their retirement years.

…Read More

Voluntary enslavement is no way to go through life. Do not sacrifice your future for a frivolous desire. Use goals to breakaway from bad financial habits.

A few words of advice as we enter into 2012 in terms of what experts are saying about the year ahead and how I think investors should approach this investing cycle we’re in.