The Motley Fool's Weekly Editors' Picks
Fools were out and about this past week in an investing world jam-packed with actions and ideas. Here are three articles you might find useful as you decide how to invest your money.
How to Thwart the Opaque, High-Fee, Underperforming Financial Advisors Who May Be Mismanaging Your Money
This article has a long title but a simple message: You're the boss when it comes to your wealth. What that means is you have to take the initiative to find out all you can about the professionals managing your money. You could be shooting yourself in the foot if you don't know what training they've had, how they make money off of serving you, and what standards they hold themselves to.
You also have to know a lot about yourself. "Only you know what you want to achieve in the future, so make sure your financial advice is tailored to fit your circumstances," Fool analyst John Reeves wrote in this introductory article to a Motley Fool special report on the financial-advice industry. Links to all the articles in the report as well as a list of resources to help you better manage your money can be found by following the article link.
When "Value Stocks" Are Simply Vile
Investors are always looking to get value for their money, but finding value stocks isn't as simple as it might seem. "Value doesn't necessarily follow a beaten-down stock price," Fool analyst Alyce Lomax wrote. "Value comes along when a retreat in a price is disconnected from a company's strengths, not connected to a company's ongoing fundamental and ethical weaknesses."
It's been clear for years that Chesapeake's management and board are "seriously bad news for shareholders," Alyce wrote. She took note of the company's buying CEO Aubrey McClendon's antique-map collection for $12 million and McClendon's running a hedge fund and taking loans against stakes he owned in company wells. The SEC has started an informal probe into Chesapeake, while credit-ratings agencies have downgraded their outlooks for Chesapeake, and Alyce warns off those who think all this bad news has made the stock a buy.
At Green Mountain, the board "recently jettisoned founder and chairman Robert Stiller for violating the company's own trading policies; a margin call triggered a sale during the restricted earnings period," Alyce reported. "Apparently Stiller had used his shares as collateral for personal loans that were not of any particularly urgent personal nature, but rather to finance things like a 164-foot yacht and expensive real estate."
Investors thinking of putting money into companies with troubling histories of acting in ways that are unfriendly to shareholders need to wake up and smell the coffee, Alyce wrote.
Read the article to find out more about how to determine when a "value stock" is simply vile.
3 Things You Need to Know About Annaly Capital's Big EarningsFool analyst Ilan Moscovitz brought readers a look into how things are going with mortgage real estate investment trust Annaly Capital (NYS: NLY) . Profit spreads remain down, prepayments are steady, and leverage is down. Annaly has been scaling back its leverage over the past year in response to lower yields, Ilan reported, while agency REITs such as Armour Residential and American Capital Agency (NAS: AGNC) have significantly higher amounts of leverage. American Capital Agency has been ratcheting up over the past year. "Although that puts Annaly's dividend at a relative disadvantage to its peers, it is a safer position to be in," Ilan wrote.
"Annaly continues to yield 13.4%, while REITs with higher leverage are squeezing out a few more points," Ilan wrote. "With favorable interest and prepayment rates basically locked in, we can expect that to continue for about another couple of years."
Read the article for more insight into the world of investing in REITs.
Looking for more investing ideas? Then check out the Motley Fool free report "The Only Energy Stock You'll Ever Need."
At the time this article was published Fool online editor Kris Eddy owns no shares of any stocks mentioned in this article. The Motley Fool owns shares of Annaly Capital.Motley Fool newsletter serviceshave recommended buying shares of Green Mountain Coffee Roasters, Chesapeake Energy, and Annaly Capital, as well as creating a lurking gator position in Green Mountain Coffee Roasters. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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