Will This Rally Be Different?

As the stock market shows signs of a rally much like that of 2015, should we be optimistic that it will reach new highs or prepare ourselves for another disappointment? In a recent article in Barron’s, James Paulsen of Wells Capital (a unit of Wells Fargo & Co.) thinks it could be different this time, and here’s why: This rally is seeing a much broader participation than that of 2015, when it was led by a small number of S&P 500 stocks while most underperformed. This year, the stock market isn’t facing any pressure from bonds. Last year, the rally […]

Stodgy Dividend Payers On Top So Far in 2016

The Wall Street Journal reports on investors’ recent moves toward high-dividend stocks. Stocks in the S&P High Yield Dividend Aristocrats Index (which have increased their dividends every year for at least 20 years) are up 1.9% this year, while the S&P is down 4.3%. The return on the Dow Jones U.S. Dividend 100 Index (which consists of consistently high paying stocks) is down 0.8%. One reason for the interest in dividend payers is the perception that further Fed rate hikes are increasingly unlikely. Years of low rates make bonds less attractive. As James Paulsen, CIO at Wells Capital Management, puts […]

Paulsen Urges Shifting More Towards International Stocks

US investors should start considering a heavier weighting to international stocks, according to James Paulsen of Wells Capital Management. Paulson, who is chief investment strategist at Wells, says that a commodity-price rebound will benefit international stocks more than the domestic names.  “The U.S. economy is more consumer-centric compared to foreign economies,” Paulson wrote in a note to clients. According to the Bloomberg piece Paulson says, “the pendulum is due to swing against domestic shares, he wrote, as an economic growth spurt similar to those near the end of 1970s, 1980s and 1990s expansions lifts commodity prices.”

Paulson: Understanding Indisputable Consensus and Unrecognized Themes

In an article in Canada’s Financial Post, columnist David Pett offers up some valuable investment insights from James Paulson, chief investment strategist at Wells Capital Management, who has been mostly correct in his stock market and economic calls since early in the bull market. Paulson explains that often, investors weight the consensus opinion in the market too heavily and lose sight about the factors that end up influencing what happens in the future. Paulson recently wrote, “combined, indisputable consensus trends and unrecognized themes can represent potential shocks to the investor mindset”. In Paulson’s view, there are five indisputable consensus themes […]