Selling puts on the SPY to help offset market volatility | Sheaff Brock Investment Advisors

Sheaff Brock Sells Puts on the SPY

It has a long name, but the Sheaff Brock Investment Advisors Index Income Overlay portfolio strategy has one simple goal: seeking additional income that is incremental to (meaning on top of) a high-net-worth investor’s existing portfolio. For those investors comfortable with taking additional stock market risk for the opportunity to generate added (net of fees) cash flow, the Income Overlay portfolio is a long-term, bullish play on stock investing using a the SPDR S&P 500 ETF (symbol SPY). This strategy [...]

Market Effects of Midterm Elections | Sheaff Brock Perspective

Market Effects of Midterm Elections

“A quick look at historical performance shows that stocks often see rough sledding in the September of years that feature midterm elections,” MarketWatch comments, adding that it was not “clear that the midterm congressional elections on Nov. 6 … would be enough to derail the bull market.” One thing that has characterized midterm seasons, Sheaff Brock Managing Director Dave Gilreath notes, is greater stock price volatility. In fact, he notes, midterm years have been more volatile than the average. The [...]

Sheaff Brock | Economic indicators looking up | thumbs up

Following the Lead—Economic Indicators Point Upwards

The economy, like the scenery on a car trip, can be viewed through the windshield, the rearview mirror, or the side window, Investopedia explains. Leading indicators are pieces of data which economists see as they look through “the windshield” at the economy, using those indicators to help predict the future direction of the markets. Examples of economic indicators include: current stock prices stock futures bond and mortgage interest rates the yield curve foreign exchange rates commodity prices (gold, grains, oil, [...]

Sheaff Brock | Market Volatility in End-of-Day Trading Volume

At the End of the Day, Market Volatility Happens at the End of the Day

Bet you didn’t know this startling statistic—26% of all stock market trades are done at the very end of the trading day! How does that relate to the market volatility fear reaction that many investors are experiencing these days? Take a closer look. In just the first quarter of 2018, there have been four times as many days with a greater than 1% price move as there were in all of 2017. When weaker job statistics, political scandals, and scuttlebutt [...]

Sheaff Brock | Stock Market Volatility as a Sheep in Wolf's Clothing

Market Volatility—A Sheep in Wolf’s Clothing?

“The market is as much about sentiment and psychology as it is earnings and profits,” Avi Salzman stated in Barron’s. As Salzman observed the “tit-for-tat proposals” of tariffs between China and the U.S., he realized that the fear factor was going up regarding a potential trade war. Meanwhile, stocks were also being rattled by an anemic jobs report. Salzman is reminded, he says, of “the importance of perception versus what is reality.” No tariffs have actually been approved or [...]

Sheaff Brock Preferred Stock portfolio | question marks about rising interest rates

Preferred Stock—Expect the Question; Consider the Answer

The unrelenting search for reliable investment income is an important theme in retired clients’ investment plans, and preferred securities certainly share the limelight. What’s more, given the current buzz about the new tax law, it’s hard to ignore the fact that certain features of the law can favor investing in preferred stock, potentially increasing the demand for high-income investment vehicles. The question: As you’re discussing this very topic at the tennis club, expect the question: Interest rates are on the rise. By [...]

Sheaff Brock Preferred Income Portfolio | Impact of New Tax Law on Preferred Stock

New Tax Law Bodes Well for Companies Issuing Preferred Stock

There’s a whole lot of media buzz going on about the new tax law and how good a thing that law is turning out to be for corporate America. Turns out, certain features of the law may be a very good thing for investors in preferred stock as well. What’s that all about? First, by way of quick review, preferreds are hybrid securities, blending traits of both stocks and bonds. Preferreds, like common stock, represent ownership in a company, but [...]

Interest Rate Signs Increasing in Size | Managing Interest Rate Risk for Preferred Stock Income | Sheaff Brock Investment Advisors

Managing Interest Rate Risk in a Preferred Stock Portfolio

If I invest in preferred stock for the income just when interest rates are rising, won’t I be setting myself up for losing money? “Not necessarily,” contends JR Humphreys CFA, CAIA, Senior Portfolio Manager at Sheaff Brock Investment Advisors. Humphreys explains that, “increasing interest rates is usually the result of an improving economy that could lead to credit rating upgrades for the preferred equity, resulting in a higher price.” Many investors have the perception that preferred securities are highly interest-rate [...]

Young Bull | Sheaff Brock | bull stock market

This Bull May be Younger than You Think!

For investors worried that the stock market is so high that it has to be headed for a drop, Sheaff Brock Director Jim Murphy wants them to know he’s not having any of it. “At Sheaff Brock, we believe this is a ‘market of stocks,’ not a ‘stock market,’” he explains. Translation: The big upward price movement in the Dow has been primarily driven by its most expensive stocks, specifically the FANG (Facebook, Apple, Netflix, Google) and Microsoft. There are [...]

Sheaff Brock Investment Advisors | active investing to outperform the market | portfolio managers

Passive vs. Active – The Beauty of Both

One question any investor must consider is whether to take an active or passive approach to investing. Per Investopedia, “The predominant investment strategy today is active investing,” which attempts to beat a particular benchmark and “outperform the market.” Continuing, the article points out, “anomalies and irregularities in the capital markets can be exploited by those with skill and insight.” By contrast, passive investing, the authors explain, is an approach based on investing in exactly the same securities, in the same proportions, [...]