One of my wonderful friends, Ms. P, asked me for some guidance on how she might allocate $50,000 currently earning peanuts in a money market account. Though she is decades from becoming a grandmother, after a brief discussion about her financial parameters, it became clear to me that she was looking for a "granny fund."

In reality, my recommendations would be suitable, and perhaps desirable, for many passive investors as well.

The $50,000 is a portion of money Ms. P has set aside to purchase a home, which might happen in six months, but could also be pushed out further, depending on the economy and her situation. Basically, she wants to cover all her bases because she might need the money at any time and does not want to be caught short, while at the same time she would like to generate some revenue without taking any big risks.

Continue reading Where should granny put $50,000?

Where should granny put $50,000? originally appeared on BloggingStocks on Fri, 09 Oct 2009 15:40:00 EST. Please see our terms for use of feeds.

Continue reading Southern Co.: A play for low-risk investors

Southern Co.: A play for low-risk investors originally appeared on BloggingStocks on Thu, 08 Oct 2009 17:40:00 EST. Please see our terms for use of feeds.

Continue reading Serious Money: Not cheating -- market waving the caution flag

Serious Money: Not cheating -- market waving the caution flag originally appeared on BloggingStocks on Thu, 09 Jul 2009 15:20:00 EST. Please see our terms for use of feeds.

Today's three stocks are in diversified mining, electric power utilities and high-tech defense. Going back ten years, they have all trounced the index and I'm betting they will continue to do so.

Continue reading Serious Money: Three more stocks that beat the market: BHP, RTN, SO

Serious Money: Three more stocks that beat the market: BHP, RTN, SO originally appeared on BloggingStocks on Tue, 07 Jul 2009 15:40:00 EST. Please see our terms for use of feeds.

Billions of investment dollars are sitting on the sidelines for fear of entering the market at the wrong time and losing more money after taking a bath last year. However, the market seems to have hit bottom last March and many investors missed the 40% gain from that point to now.

Market prognosticators are spewing out opinions faster than the public can grasp, or understand. I choose to stick with basic fundamental value propositions and ignore the noise.

I have been buying for the past eight months and riding the market waves, good and bad, to huge gains -- so far. Maybe I will be giving some back, maybe not, but I have also been encouraging readers to take something off the table, in several recent posts.

Continue reading Serious Money: Five high-yield, safe, diversified stocks

Serious Money: Five high-yield, safe, diversified stocks originally appeared on BloggingStocks on Mon, 29 Jun 2009 12:00:00 EST. Please see our terms for use of feeds.

Readers of this space know that one of the preferred sectors is the electric/power generation sector, which should benefit from both an expanded infrastructure and ramping demand, once U.S. economic growth resumes.

And with the above in mind, the Southern Co. is (NYSE: SO) worth a review. The Southern Co. provides power to roughly 4.3 million customers in the Southeast United States.

In general, analysts expect the economic recovery in and around Atlanta, Georgia, SO's core area, to put a bottom under earnings in FY2009. The commercial side of energy use (primarily the industrial segment), will take longer to snap-back, but a more-modest decline in the residential sector and its quicker recovery should offset that industrial sluggishness. The greater Atlanta region did not experience as large a housing bubble as the West and East, hence the bust was not as severe, from a household formation standpoint.

Continue reading The Southern Co.: Safety and decent growth are hard to ignore

The Southern Co.: Safety and decent growth are hard to ignore originally appeared on BloggingStocks on Fri, 19 Jun 2009 14:00:00 EST. Please see our terms for use of feeds.

The stock market has enjoyed a strong rally the past ten weeks, even with a few very minor setbacks. If you were in the market, you enjoyed it too.

It is more likely that the market will become somewhat volatile for the rest of the year rather than continue to rise substantially, barring some outlier. For this reason I have been emphasizing to our readers that they focus their attention on creating a watchlist of stocks they would like to acquire, potentially at great discount for the long haul.

I started this recent series last week with Serious Money: Keep your eyes on UPS and FDX, focusing on large cap stocks certain to make it through these difficult times.

Continue reading Serious Money: Duke Energy & Southern 'Power-Full'

Serious Money: Duke Energy & Southern 'Power-Full' originally appeared on BloggingStocks on Thu, 21 May 2009 13:00:00 EST. Please see our terms for use of feeds.

Continue reading Safe harbor investments for 2009, billionaires who lost most money & 14 very toxic toys - Today in Money 12/17

Safe harbor investments for 2009, billionaires who lost most money & 14 very toxic toys - Today in Money 12/17 originally appeared on BloggingStocks on Wed, 17 Dec 2008 09:03:00 EST. Please see our terms for use of feeds.

Continue reading Sector ETFs: Energize your portfolio with XLU

Sector ETFs: Energize your portfolio with XLU originally appeared on BloggingStocks on Fri, 05 Dec 2008 16:30:00 EST. Please see our terms for use of feeds.

One of the best things about blogging is the instant responses we receive. There are many times you have to be thick skinned when receiving criticism or just tolerant of the foolish people who are either rude or unknowing.

This brings me to Mr. noitall (small 'n' his choice) and the following commentary which followed my recent post $700 billion is real money!

"Well, maybe I was labeled a cynic about 2 years ago when I said the Fed is in a "check-mate" situation, where they will have to choose between saving the stock market, real estate market, or the dollar, but it most likely fail at all three. I don't think I am a cynic, just a realist, and it looks like I was right. Another thing I will say is massive greed, ignorance, arrogance and our willingness to believe in fantasies allowed this to happen. Maybe when a "cynic" questions some of the well known "facts", like the "buy & hold" theory, people should listen & give it some thought, before they believe the "historical data" they are given."

Mr. n and I often find common ground and he is telling the truth when he writes that two years ago he predicted the speculation and down market we are faced with today. While I must say that I find his view bleak, it has to be said also that people should be better prepared for poor markets and tough times.

While Mr n. is correct today and maybe tomorrow, his bearish outlook may not hold true next week or month or year. He does not mention the folly of straight-line analysis, but I am sure he would agree that good times do not necessarily follow good times and for the same reason bad times to not proceed in a linear fashion either.

Continue reading Reader rants, blogger listens - what's this world coming to?

Reader rants, blogger listens - what's this world coming to? originally appeared on BloggingStocks on Wed, 08 Oct 2008 14:10:00 EST. Please see our terms for use of feeds.

There is a lot of bad news affecting the stock market and prices are falling for some very important reasons. These include reduced expectations for earnings, higher unemployment, a lack of liquidity, a housing market that has not bottomed yet, federal spending gone wild, and the collapse of some venerable financial institutions to name a select few.

The Standard & Poor's 500 Index: started the year (Dec 28, 2007) at 1,478.49 and as of Friday October 3 it was 1,099.23, down 25.7%.

There are concerns about recession and even a depression and the global market for most commodities has softened.

Given all this how can I believe that the market is becoming irrational to the downside and values abound?

For one reason I know that many people are selling stocks out of fear of the market going lower and they do not want to be the last one out of the pool. That is a legitimate reason to sell but has nothing to do with the intrinsic value of a company or stock. If the index is being sold off then that means the good are being sold along with the bad.

Another factor pressuring the market relates directly to tight liquidity. I recently refinanced my home and the bank wanted me to reduce my home equity line to comply with its much tighter lending requirements. I sold some stock to accommodate them but this had nothing to do with stock valuations. I also sold some stocks and funds to buy down a commercial real estate loan in the past month. I had no pressure to do so because the loan to value is very low, but we are looking to acquire additional property as distress sales turn up and want to keep our powder dry.

Many people have been allowing their credit card debts to increase but facing little hope of growth in the stock market; those that can are selling stocks to buy down their debts where they can. This too has nothing to do with the intrinsic value of the stocks they are selling.

Continue reading All bets are off -- stocks irrational downside

All bets are off -- stocks irrational downside originally appeared on BloggingStocks on Mon, 06 Oct 2008 14:26:00 EST. Please see our terms for use of feeds.

• Southern Company (SO) has been the biggest addition to our family holdings. It is now in at least seven portfolios and I have sold naked puts for November 30's. I AM NOT RECOMMENDING ANYBODY SELL NAKED PUTS. Selling naked puts is very risky and as they say..."don't try this at home folks." I like Southern because it is near a 52-week low, but has had five years of continuous growth. It pays a huge dividend, as utilities traditionally do, and it is located in a part of the country that has relatively low wages, cheap land, good weather, a favorable tax environment and it has seen tremendous growth in the past two decades, which I believe is very likely to continue.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of SO.

Chasing Value: Southern Company is somewhere to hide originally appeared on BloggingStocks on Mon, 29 Sep 2008 13:34:00 EST. Please see our terms for use of feeds.

This is a continuation of Serious Money: Choose these 5 stocks over CDs -- DEO, GE, HNP, JPM, MRK, which listed the first five stock ideas. Below are the other picks rounding out the ten.

Nucor Corporation (NYSE: NUE) - This is one of the world leaders in the idea of mini-mills. This smallish steel producer prides itself on running a tight ship, pays a dividend and has a P/E under 9. The steel industry has been volatile in recent years with many mergers and acquisitions. NUE could be a takeover target as the industry continues to consolidate. In the mean time, at Friday's closing price of $51.6, it was paying a 4.05% yield and is near its 52 week low, having dropped from a high of $83.56.

Precision Drilling TR (NYSE: PDS) - This Canadian supplier of gas drilling equipment and manpower is probably the least well known of the companies in this group. It has dropped off its highs with the recent sag in gas prices and may well be a bargain again although not the bargain it was when I posted Chasing Value: Precision Drilling for 10% yield. At Friday's closing price of $21.35 it was paying a 7.1% yield and that is still a wonderful bounty even it the stock only appreciates a little.

Continue reading Serious Money: 5 more stocks better than CDs -- NUE, PDS, SO, WFC, XEL

Serious Money: 5 more stocks better than CDs -- NUE, PDS, SO, WFC, XEL originally appeared on BloggingStocks on Mon, 25 Aug 2008 12:48:00 EST. Please see our terms for use of feeds.

The stock market was down yesterday and it is down again today. Bearish sentiment is roaming through Wall Street right now, so I thought I would look back on another occasion when the market was going through similar turmoil and I wrote about the following eight stocks, which I thought would be "safe havens" in such a storm.

Six of the eight did well and two did not, and of course one of those two was a disaster. Among the losers, I do not think anyone is fretting about UPS, which is still one of the few triple-A rated companies along with Berkshire Hathaway. It has been well reported that the slowing economy and higher fuel prices have been the major culprits affecting UPS's earnings. In the case of WaMu, it's demise has also been well reported, but at the time I recommended it WaMu had a stellar reputation of growth and high yield for over two decades. There is no hiding, it turned out to be a lousy pick and an ANTI-SAFE Haven

NOT SAFE:

United Parcel Service (NYSE: UPS) closed Monday at $65.30 down from $78.40; a 16.71% loss

Washington Mutual (NYSE: WM) closed Monday at $4.21 down from $45.50; a 98% loss.

Fortunately the remaining six picks have done very, very well. If you had bought the pool, the average gain over the last two years would have been 7.14%. Adding the dividends over the two years would have raised this to 13.14%.

Continue reading Serious Money: How safe were BRK, BUD, PG, SO, & UPS?

Serious Money: How safe were BRK, BUD, PG, SO, & UPS? originally appeared on BloggingStocks on Tue, 19 Aug 2008 15:07:00 EST. Please see our terms for use of feeds.

I have not decided who I am voting for yet. Or maybe it would be more accurate to say I have decided on multiple occasions only to become undecided again. While some will see me as fickle, or worse, others may be in the same boat.

I am also continuing to think about what difference any of the candidates can make on the economy, and based on these musings, where to invest. My current belief is that none of them will have a profound impact on our economy.

There are no financial wizards among them. Here is the shocker though: I like all three candidates, or at least can find some good in each of them. Each of them is a fighter, and I believe each one of them brings certain skill sets to the job. There are also things about each candidate that are inescapably negative. Clinton has so much baggage, Zsa Zsa Gabor would be jealous. Obama does not have the experience and he has a degree of arrogance (right sweetie); McCain is an old stick-in-the-mud who, as a long-time senator, has spent more hours with lobbyists than almost anybody, though he is pretending otherwise.

Where does this leave me from an investment perspective? My first choice, for stability with moderate growth and dividends, remains the defense sector. I wrote Defense sector rolls over S&P 500 for 8th straight year a while back and I still think that it is the most secure. Here's why:

A) None of the candidates will want to appear soft on defense when we are at war, and all three have made threatening remarks in some country's direction to make sure the electorate knows that.

B) The War in Afghanistan and Iraq rages on, and even the most optimist view is that a draw-down will take years.

C) Even if all war ceased immediately, the upgrading and replenishment of the hardware will cost billions of dollars and most of the defense contractors have that in their backlogs now. Chasing Value: General Dynamics & Raytheon -- The defense does not rest

Continue reading Investing in Everyone: Defense, Food, Power, Clinton, Obama, and McCain

Investing in Everyone: Defense, Food, Power, Clinton, Obama, and McCain originally appeared on BloggingStocks on Tue, 27 May 2008 19:05:00 EST. Please see our terms for use of feeds.

The Coca-Cola Company (NYSE: KO) should not have a problem selling Coke, even in a recession. It traded up to $65.31 from 52-week low of $45.56.

The Southern Company (NYSE: SO) is an electrical utility with safe yield of 4.1%. It moved up to $40.52 from 52-week low of $33.16.

Abbott Laboratories (NYSE: ABT). Healthcare seems like safe haven. ABT traded up to $60.29 from 52-week low at $49.58.

Genzyme Corporation (NASDAQ: GENZ). Analysts say sales should be strong for several years. Stock was up to $79.70 from 52-week low of $58.71.

Douglas A. McIntyre is an editor at 247wallst.com.

The 52-week high club originally appeared on BloggingStocks on Wed, 09 Jan 2008 16:26:00 EST. Please see our terms for use of feeds.

The more questions you have these days about the investment world, and the more concerned you are about economy over the next few years, the more you should have some of your assets in electric utilities. Regardless if our nation makes a push toward nuclear, solar, or wind power or does nothing at all, electric utilities will remain the big players. Year in and year out they have a stable customer base, pay a higher dividend yield and have a much higher level of predictability than almost any other investment class.

Another factor that is likely to contribute to the growth of electric utilities is the push toward electric "plug-in" cars. I have not done any analysis as to how this will affect global warming, the price of gas, the quality of air, or total national energy consumption, but those issues aside, if we change even 25% of the nation's automobiles to all-electric over the next ten years, that is a lot of growth.

Historically, the Dow Jones Utilities Average has beaten the pants off the Dow Jones Industrial Average for total return. There are short periods of time when the Industrials jump past the Utilities, but over the long haul, investors have done much better with what seems like the less attention-grabbing, boring old utilities. Choosing boring stocks remind you of anyone? Yes, "My Pal Warren" has been buying these boring stocks over the last decade (adding to his others in chocolate, underwear, ice cream and insurance) and you can see the results in the five-year chart comparing the two Dow indices.

Continue reading Serious Money: Electric utilities are the place to be

Serious Money: Electric utilities are the place to be originally appeared on BloggingStocks on Tue, 20 Nov 2007 14:55:00 EST. Please see our terms for use of feeds.