Many large cap integrated oil and gas companies have been hammered because of rising concerns over a Greek default and a China slowdown. The worry is that if Europe and China implode, oil demand will shrink causing oil prices to decline.

While the short-term case for avoiding oil might be compelling, perhaps the global economic turmoil is already baked into the cake. Frankly, if there's anything the past couple years has confirmed for me it's this: I don't know and neither does anyone else.

Tactical asset allocation is an extremely difficult and often destructive task. Instead, dollar-cost-averaging into a sound long-term investment thesis may be the best and most straight-forward way to accumulate assets.

Looking past the short-term fluctuations, over the long run I still believe that the global middle class will continue to grow and absolute oil production will approach physical capacity. More specifically, energy return on energy invested

There are two ways to think of dividends: 1) As a long-term investing philosophy; 2) As a short-term risk-on/risk-off volatility play.

Since 1927, dividend paying stocks have returned 11% per year vs. 8% for non dividend paying stocks. Moreover, they have outperformed with less volatility. (Source) This alone is a compelling reason to invest in dividends for the long-run. (Without deeply diving into the merits of a dividend strategy, I'll simply state that dividend paying companies tend to benefit from more efficient allocation of capital and better management discipline.)

In 2011, a dividend strategy paid off. The following chart shows 2011 performance for dividend payers vs. non payers:

However, more recently the

With almost 70% of Q1 2012 S&P 500 earnings reported so far, it looks like Q1 was another big quarter for American businesses. Earnings and dividends data appear to support the market rally and current S&P 500 (SPY) valuations.

Earnings Growth and 'Beats'

Bottom-up 12mth operating earnings for the S&P 500 are on track to hit record-breaking territory, supporting the S&P 500 Index recovery. As you can see in the chart below, earnings have essentially caught up to the S&P 500 Index level, providing support for current valuations.

click to enlarge images

In addition to absolute aggregate earnings growth in dollar terms, 70% of Q1 2012 company earnings reports (so far) beat analyst estimates. This is also supportive of current market levels.

In Q4 2011 only 58% of company earnings reports beat expectations.

The chart below breaks out Q4 2011 and Q1 2012 company earnings 'beats' by sector.

Note: For

Investors who solely look at valuation metrics such as price-to-earnings and price-to-book ratios miss the full picture. Sometimes a stock is cheap because earnings are expected to decline in the future. So a 9x P/E ratio today could turn into a 20x P/E in the future.

Even investors valuing a company using a discounted cashflow methodology are simply making an educated guess about future earnings. Very smart investors can have wildly different views about the future cashflows of a business.

If professional analysts who spend 10 hours a day analyzing businesses and industries can't agree, what hope is there for the average Joe straining over his portfolio at the kitchen table after the kids go to bed? Individual investors must seek advantages wherever they can. Sites like Seeking Alpha are a great start. Discount brokers and low-fee ETFs are also helpful.

Another strategy many investors use is to follow those

Over the past nine days (ending April 20th, 2012) Apple (AAPL) is down almost 10%. With an average nine-day return of 1.10%, since 1984, this has many investors wondering if this is a buying opportunity or a sign of worse to come.

Let's look at some of the historical data:

On any given trading day since 1984, Apple's stock price has experienced a similar or worse nine-day drop only 8.57% of the time. Clearly, this type of drop is infrequent and potentially significant.

The last three times Apple stock dropped more than 9.9% over nine days were August 8, 2011, July 5, 2010 and many occasions during the financial crash from 2008-2009. The average 30 day return after these drops was -3.99%. However, if one only looks at the 2011 and 2010 corrections the average 30 day post-correction rise was nearly 16%. Investors that bought the last two 9.9%+ nine-day

Many income investors are missing out on exposure to non-US dividend paying companies. There are many big foreign companies listed on the US exchanges, making it extremely easy for US investors to buy and sell their shares.

In my opinion, US-listed Canadian companies can be a great source for diversification for US investors. In a nutshell, here are a few key reasons to consider diversifying into Canadian companies:

• The Canadian dollar is driven by different dynamics than the US dollar (such as the demand for resources) and may be a source of diversification for investors exposed to US dollars.
• Many Canadian industries operate in oligopolies (e.g. banking), which may strengthen pricing power and profitability.
• As a commodity exporter, the Canadian stock market is heavily influenced by energy and materials - while non-resource Canadian companies may not provide direct exposure to energy and materials, a broad based ETF may [e.g. iShares

The European debt crisis is creeping back into the news. This time Spain is taking the spotlight.

"After three months that were calmer than expected, the euro crisis is back," said Holger Schmieding, chief economist at Berenberg Bank in London. "The speed of the recent surge in yields has elements of a renewed market panic."

On Friday, April 13th, 2012, Spanish 10 year bond yields approached 6% and Spanish stocks continued to get slammed. Between December 7, 2007 and April 13, 2012 the iShares MSCI Spain Index ETF (EWP) is down 61.42%. The ETF is down 47.77% from its post-Lehman high, reached November 13, 2009.

While this crisis is resurfacing onto the mainstream media publications, it has been at the top of some investors' minds for years. Unfortunately, even the most bearish of forecasts are proving to be tame.

According to a new report by Carmel Asset Management, Spain's debt-to-GDP

You've probably heard many opinions that Chinese real estate is in a bubble. However, much of the prognostication has been backed by hearsay and speculation. Below, I go beyond the hypothetical by illustrating the hard data that demonstrates that Chinese real estate is in a bubble. I will go further by anticipating how investors could potentially profit from the collapse of Chinese real estate bubble.

Most investors value residential real estate using a variety of measures. These include: price-to-incomes, price-to-rents and affordability. Essentially, people buy homes when they can afford the monthly payments.

Comparable sales are also often used, but I think this is the weakest form of property valuation. Arguing an asset is worth $x because a similar asset sold for a $x suffers from pro-cyclicality and becomes a self-fulfilling prophecy.

The first three charts below compare property valuations in the US with those in China and a selection

Since the March 2009 bottom of the bear market, broad stock indices such as the S&P 500 (SPY) have risen significantly. This was driven primarily by a massive earnings recovery, with S&P 500 earnings rising by about as much as the index itself.

Dig beneath the broad index, however, and you will see that some sectors within the S&P 500 have significantly lagged their earnings growth, presenting a potential opportunity.

Using the SPDR sector ETFs as a proxy, the chart below shows the range of price returns since March 2009. Note the wide variation across sectors:

To give this more color, the chart below compares earnings growth (red) with

Investors' mouths water over fat, juicy dividend yields. The problem with picking individual stocks with enormous yields is that many are priced that way because they are unsustainable. Either the payout ratio is too high, earnings too low or both. If something sounds like it's too good to be true it probably is.

Still, there's something about 10%+ dividend yields that appeals to the speculator in all of us.

"If I can just hold on, the stock pays for itself in under 10 years", I hear people rationalize. "Perhaps the dividend is maintained; perhaps earnings grow; perhaps the stock price normalizes".

In reality, investors must approach high yield stocks with caution. No investor has a crystal ball, so if an investor wishes to access high risk equity income it is important to diversify across a range of high yielding companies with reasonable valuations and business strength.

I ran a screen

In a recent article, I pointed out some of the reasons some companies are hoarding cash instead of returning it to shareholders. Many senior executives are being excessively cautious - due to two major cash crunches in under a decade - and often have the desire to build a corporate empire.

I have since discovered that this phenomenon isn't isolated to a few outliers. Companies across the S&P 500 (SPY) are withholding cash from their shareholders.

You might contradict this by pointing to the near record-level dividends on the S&P 500. As at the end of 2011 trailing twelve-month dividends on the S&P 500 were close to matching the the record set in September 2008. In fact, trailing twelve-month dividends have relentlessly risen since they bottomed in March of 2010 (see chart below).

click to enlarge images

While the dividend growth trend seems to recently be heading in the right

Over the past few years, many companies have turned ultra-conservative and, instead of splurging in areas like M&A and R&D, are building massive cash war-chests. This is happening because many senior executives saw less liquid and highly leveraged (operating and financial leverage) competitors go bankrupt during the tech implosion and financial crash. By squirreling away cash, these executives made their companies more resilient to short-term funding crises and revenue shocks.

Today, however, many companies have become giant cash cows waiting to burst - they are sitting on so much cash that it has become a potential drag on the business. Cash stored beyond the needs of a potential funding crisis translates into inefficient use of capital.

Inefficient capital allocation effectively means that these companies are potentially suppressing stock returns by 'investing' in assets that don't cover the firm's cost of capital [i.e. negative net present value (NPV) investments], like short-term

Uncovering the true picture of employment is a exploration full of missteps and false leads. But a savvy investors stays two steps ahead of the economy, so he must dig for nascent trends before they become front page news. The stock market is a discounting mechanism, and for the S&P 500 (SPY) to continue rising the financial condition of the average American will need to steadily improve over the next few years.

According to the the widely-reported data, such as the unemployment rate, the employment situation is improving. But most investors know that the standard employment data is easily misunderstood and manipulated. For example, the sheer gap between the U-6 unemployment rate (14.9%) and the widely-reported civilian unemployment rate (8.3%) indicates a big chunk of data is being missed by mainstream media.

Perhaps the best snapshot of the state of American employment is the employment-to-population ratio, which has stabilized at

Apple (AAPL) is the darling stock of the post-crisis era. Yes, there are many reasons to love the stock, but in this article I will present a small dose of reality.

Apple has created a new paradigm, and like the new "paradigms" of the 1990s tech bubble this has me worried. I like Apple for everything they have done to make personal computing and entertainment more engaging and useful, but I wonder if the stock price has outrun reality.

Unlike the tech companies that blew up in 2000 Apple is earning money for shareholders. However, profitability-alone is not reason enough for never-ending stock price appreciation.

I think there are a number of reasons to stop eating up Apple stock - at least for the short term. As with many value managers of the 1990s I could be laughed out of the room for being a dinosaur, but the best bulls

Europe has been through the wringer. But now, some investors are sensing that the debt issues plaguing the region are manageable. I'm not sure I believe that prognosis, but I do admit the world does have a way of muddling through problems when everyone is looking for a catastrophe.

Despite the likelihood that Europe remains in recession for some time, some more daring investors are searching for stocks that have lagged over the past couple months.

At the request of one of my readers at Plan B Economics, I ran an objective screen using the following constraints:

• US-listed
• Large-cap
• European stocks
• Trading within 5% of their 50-day lows

I came up with the following list of companies, which all happen to pay dividends:

AstraZeneca PLC (AZN)
AstraZeneca is a global integrated biopharmaceutical company.

Fresenius Medical Care AG & Co (FMS)
Fresenius Medical Care is the world's leading provider of products

Over the past five years, two important dynamics have defined the gold market.

1. Gold bullion prices (using SPDR Gold Trust GLD as a proxy) have risen about 160%.

2. Gold stocks (using Market Vectors ETF Trust GDX have only risen about 40%.

Many analysts point to this diversion and argue that gold companies are seriously undervalued relative to the asset they mine and market. However, a shift in investor demand has changed the relationship between gold bullion and gold stocks.

Since 2007, worry over the stability of the global monetary system has risen. As a result, more investors desire gold assets that strip out the equity risk premium. Many gold investors aren't looking for exposure to asset discoveries, manager skill, reserves growth, contractual obligations, etc. They simply desire exposure to an asset that potentially hedges some exposure to the financial system. As a result, many investors looking at gold

Warning: The following article contains data that some might find shocking. While the figures are grounded, they are not necessarily forecasts.

Since 1687, the gold-to-silver ratio has ranged from 14.14 to 99.76 (see chart below). Over this period, the average gold-to-silver ratio was 27.28 and today (March 8, 2012) the gold-to-silver ratio is 50.09.

If silver were to rise to bring the gold-to-silver ratio back to its long-term average, the silver price must rise to $61/oz. (Of course, gold (GLD) prices could also fall to lower the ratio. But let's assume gold is priced at fair value.)

If the ratio were to return to the pre-1900 average of 16.13, the silver price would have to rise to about $105/oz.

Source: Measuring Worth - The source of recent annual London Market Prices is the average of the daily London PM Fix found at Kitco. This is the price most users quote.

Right now, the world is precariously balanced between peace and WWIII.

Iran has over 137 billion barrels of proven oil reserves (Source: CIA World Fact Book). And this is the good stuff - not the Canadian sludge that requires exhaustive processes to obtain and refine. This makes Iran a bigger 'prize' than Iraq or Kuwait.

Unlike our 'friends' in Saudi Arabia and Kuwait (does this now include Iraq?) Iran is abrasively non-compliant, if not antagonistic, toward American needs. It won't play our petro-dollar games and runs a decisively anti-American foreign policy. Then again, how different is Iran from France?

While France and Iran are both sovereign nations and perfectly entitled to protect domestic interests, within the realm of international law, the latter has something America desperately needs. America's confrontation with modern Iran has been brewing for decades, but the Anglo-American quest for control over Middle East oil assets is nothing

I recently had some extra cash that I wanted to put to work, so I ran a screen for what I might call "well supported dividend stocks".

Specifically, I'm looking for companies that pay reasonable yield, but are supported by low p/e ratios, rising insider buying and low payout ratios.

I screened for large cap companies with dividend yields over 3%, p/e ratios under 15 and insider transactions that are up over 20% over the past six months.

Note: screens are step one in a multi-step research process, and aren't a substitute for fundamental analysis. The purpose of stock screens is to narrow down the unmanageably massive stock universe into a short-list of potential investment candidates.

Here's the short list:

ConocoPhillips (COP)

ConocoPhillips is an international, integrated energy company. As of Dec. 31, 2010, it is the third-largest U.S. integrated energy company, based on market capitalization, as well as proved

The American consumer is not dead. In fact, he has moved from the ER to the ICU. Since consumption is about 70% of GDP, a stable / improving consumer is an essential part of the U.S. economy.

Note: While Consumer Staples and Consumer Discretionary companies only make up about 22% of the S&P 500 (SPY), most of the companies in all sectors are exposed to the consumer. (For example, S&P 500 constituent Apple (AAPL) is placed in the Information Technology sector, but is highly dependent on the consumer.) What's good for the American consumer is good for stocks.

Don't mistake this for blind optimism -- given the fragility of the consumer's recovery, any number of exogenous shocks could send him straight back to the ER. There are plenty of potential ticking time bombs. It's only a matter of time before one goes off, once again damaging the American consumer. Also,