It may not happen next week, but it will happen. It appears that Japan is on an unstoppable path to financial Armageddon.

Over the past 20+ years, the Japanese economy has unwound the excesses caused by a giant property and financial bubble. At the same time, the country's aging demographics has increased social costs while the pool of taxable labor declined. Consequently, Japan has stagnated and repeatedly dipped into deflation.

This spring, the Bank of Japan (BofJ) announced insanely aggressive monetary expansion to finally break the deflationary curse by targeting a 2% inflation rate within 2 years. Unfortunately, I believe this policy move simply shortens the time until Japan meets its fate.

While many Americans see Japan as a far-away land of little concern, this is a massive oversight. Japan's economy is the third largest in the world, Japan owns massive amounts of US Treasuries (TLT) and Japanese financial institutions

With the S&P 500 (SPY) and the Dow Jones Industrial Average (DIA) ascending through their historical highs many investors are wondering whether the stock market is overextended and will correct by any significant amount.

I believe there are a few ways to evaluate the decision to buy or sell the market at this stage, but let me start by saying that nobody can perfectly time the markets on a short-term basis. So while you might feel strongly one-way or another, an experienced investor will realize that the market can remain irrational longer than an investor can remain solvent.

Nonetheless, here are a few key points outlining why the market may or may not be overextended.

1. The Economy

While many people remain unconvinced there are numerous signs that the economy is in a steady recovery.

The broadest measure of economic health, real GDP, has been growing steadily since it bottomed

I am not a bull or a bear. I am a data observer.

Among the millions of pieces of data in existence, I look at what I can and attempt to synthesize a thesis based on that information. One day I might look at one set of data and derive a bullish thesis on an asset. The next day I might look at another set of data and derive the opposite conclusion. I am not married to my ideas and neither should you be.

Today I looked at some data pointing to a bearish thesis for gold ((GLD), (SGOL), (IAU)).

While gold is priced in US dollars, one way to attribute value to gold is by looking at its purchasing power. To do this, one must separate price from value. Gold may be rising or falling in price, but that doesn't necessarily mean that its value is following suit. For

by Mark Motive and Alex Alibi

"In numerous years following the [civil] war, the Federal Government ran a heavy surplus. [But] it could not pay off its debt, retire its securities, because to do so meant there would be no bonds to back the national bank notes. To pay off the debt was to destroy the money supply."

- John Kenneth Galbraith

In the investing world, you can take a 3 month view, a 3 year view or a 30 year view. One person looking at one asset class might have a different forecast depending on the time horizon he is considering. In this article, I will look at gold through a 30 year lens.

I believe that structural forces will support gold and other hard assets over the long term. While current forces may be bearish for gold in the intermediate term, there are a number of underlying currents

While many parts of the global economy are clawing their way out of a very deep hole, it is undeniable that segments of the US economy are definitely improving. Compound that with what appears to be a soft landing in China and a huge kick of the can that is the European debt crisis and we could be in for a few years of growth.

By no means have we solved all our problems - many parts of the developed world still face what could be insurmountable budget problems. But frankly the markets knew of these problems twenty years ago and we still experienced a few fantastic bull runs.

If you are bullish on the markets your first inclination might be to look to stocks (investable broad stock market ETFs include (SPY), (DIA), (QQQ)) as the best way to profit. However, research suggests that other choices exist. Namely, high yield

I am someone who has followed the gold market for years, being a gold bull all-the-while. Part of me feels like I 'owe' gold and gold bugs something because of the performance I have witnessed (and participated in) over the past several years. Gold (investment options include: [(GLD), (IAU), (SGOL)] has been a great place to be for years. However, as much as I hate to admit it, today I have growing doubts.

I believe it is healthy to second-guess one's decisions. Things change and no investor should be married to a specific position or outlook. So in this article I will look at the negative argument for gold: partly to convince you and partly to convince myself that the gold bull may be dead.

Since the early 2000s, gold prices have risen by several multiples (see chart below). Since mid-2011, however, gold

We are living in strange times. U.S. interest rates are close to record lows - in fact, the 10-Year U.S. Treasury Bond yield [(TLT), (SHY) and (EDV) can be used as a way to invest in U.S. Treasuries] hit a 220-year record low during the summer of 2012. Consequently, chatter about an impending implosion of the U.S. government bond bubble has increased to deafening volumes.

Despite the rhetoric, I believe there is enough evidence to support the argument that U.S. Treasuries may trade sideways for a long time. I am not necessarily advocating the allocation to U.S. Treasuries. I am, however, attempting to cool the fire currently burning under Treasury investors' feet. Yes, perhaps Treasuries won't provide a decent yield and may lose some principle over time (unless held to maturity), but the commonly-held belief that U.S. Treasuries will imminently collapse may be unfounded.

Let's look to Japan (EWJ)

There's tons of talk about the 'great rotation' and how a massive re-allocation into risky assets (i.e. stocks) is taking place. The biggest question from investors holding bonds (AGG) and gold (GLD) is this: how will these assets perform if stocks (SPY) continue to rise? Many anticipate that a resurgence of 'risk on' sentiment could have disastrous results for bonds and gold.

There are many ways to answer this question, but (right or wrong) today I will use recent history as a barometer. Of course, no two periods are identical, so actual results may vary. Nevertheless, it is important to observe real world market behavior in combination with forward-looking analysis to help formulate an outlook for the future. This article focuses on the past.

Specifically, I will look at the period between February 2003 and October 2007, during which the S&P 500 rose about 80% in price terms (95% in

Something is going on in the housing market. Something we haven't seen for a long time. The economic forces that created an epic boom during the mid-2000s and an epic crash during the late-2000s appear to be rising once again.

Housing - arguably the greatest economic force in America - has probably bottomed and is beginning to rise again. The shift in direction is subtle, but so is every shift at first. And the shift in the housing market is coming from the fringes, but that's OK. In particular, a decent portion of demand for housing is coming from offshore buyers, speculators and property investors. Many will argue that this isn't real demand. However, in this scenario I would expect speculators and investors to be the first to dip their toes back into the U.S. housing pool. But with marginal demand comes price support (see Case-Shiller Home Price Index below),

One of my favorite investing pastimes is searching for unloved companies that offer proven products and services and pay a dividend. Recently, three such companies have caught my eye:

1. Microsoft (MSFT)

2. Cisco Systems (CSCO)

3. Intel (INTC)

I'll be the first to admit that all three companies have their issues. Most of their products are fairly mature and they face stiff competition. These are definitely not Apple (AAPL) (is Apple even Apple anymore?), but not every investment needs to be or can be. These three companies are survivors of the tech wreck of the early 2000s and have been unloved ever since.

The chart below shows the change in market capitalization for these companies over the past decade. As you can see, these companies have gone nowhere in a decade. In fact, the market capitalization hasn't even kept pace with inflation, so on a real basis these companies have lost significant

Stock screens help investors narrow down the universe of thousands of stocks into a manageable short list of potential candidates for more in-depth investigation. I recently ran a screen (using data from Finviz) to do some bottom-fishing in the universe of large-cap dividend-paying stocks.

Remember, when bottom-fishing you frequently reel in a lot of junk. So I would be ultra-cautious about any of the names discussed below. Consult a financial advisor before making any investing decisions.

Specifically, I screened for the following attributes:

• Market Capitalization over $2b
• Within 3% of 52-week low
• Dividend yield over 4%

The rationale for conducting this screen is to search for companies that are potentially overlooked (or hated) by the market (hence the 52-week low) and will pay investors (hence the dividend yield) to wait out a change in sentiment.

This is not necessarily a low-risk strategy despite the availability of a dividend that potentially

In a nutshell the 'fiscal cliff' debate is made of two high level arguments:

1. Automatic budget cuts that begin in 2013 will thrust the US economy into recession.

2. Budgets are out of control and will drive the economy towards an economic abyss.

Both arguments are unfortunately correct. Forget the fiscal cliff - the current budget quagmire is precisely what could eventually lead to a hyperinflationary cliff.

You see, hyperinflation is almost always a political problem. Decisions are made over a number of years (or decades) that benefit the immediate ruling class but put off tough choices to a future administration. As tough choices are delayed, the tradeoff becomes increasingly painful as society adapts to an unrealistic status quo. As the tradeoff becomes increasingly painful, the incentive to delay the day of reckoning grows stronger. Nobody wants to be known as the guy that brought the US economy to

To combat the recent wave of pundits calling a "bubble" in dividend paying stocks, I recently wrote an article highlighting why I believe dividend stocks are not in a bubble.

In that article, one of my arguments compared the valuations of dividend paying stocks and non-dividend paying stocks. While this provided a broad comparison, one reader emailed me a poignant thought:

The valuation comparison between dividend paying and non-dividend paying companies may be skewed because many non-dividend paying companies are growth companies that have yet to achieve a consistently positive cash flow. In other words, the comparison isn't necessarily fair.

Perhaps a better comparison would be to isolate companies that pay dividends and illustrate the valuation difference between companies that pay relatively little and relatively a lot of their earnings in dividends.

I felt the reader's point was important to address. That is the purpose of this article.

While

Many investment pundits are making the case that dividend stocks are in a bubble. I believe they are wrong.

The bubble argument begins and ends with investor enthusiasm for income. As the argument goes, the massive flows into dividend stocks (and other income vehicles) are a tell-tale sign of herd behavior. Pointing to bubbles past, the argument suggests that dividend stocks will collapse when investors rush for the exits. The catalyst they point to is rising interest rates.

Wrong, wrong, wrong.

I believe dividend stocks - in general - are not in a bubble for the following reasons:

1. Valuations

By segregating non-dividend payers and dividend payers within the S&P 500 Index (SPY), I was able to provide context to valuations for dividend payers. After separating the two categories of stocks, I then calculated the average P/E ratio, forward P/E ratio and P/S ratio for each.

Note that these category

Let me start by making a confession:

I tend to be a negative person. I don't know why, but I expect and prepare for the worst. Few people know this. To the outside world I'm an average optimist, but to those I allow into the inner workings of my brain I'm a pessimist and a cynic.

It's not that I want to be a negative person. I've just seen enough to understand that eternal optimists are often disappointed. I'd rather prepare for the worst and be pleasantly surprised when things turn out better. But often they don't.

Despite my natural tendencies, over the past several years I have uncovered periods where economic data provides a glimmer of hope. I understand that change begins at the margin, and that secular positive trends start with a infinitesimal inflection point. It is easy for someone like me to tear these inflection points apart,

In my quest for yield with long-term growth potential I recently ran a stock screen (using data available to me via 3rd party software) to identify large cap stocks with the following attributes:

• Yield 5%+

• Positive 5yr forward EPS growth estimates

Why screen for yield and growth?

While many people simply look for dividend paying equities to provide a source of income, for the long-term investor it is imperative that income keep up with inflation. Dividends without growth can essentially result in an income stream that remains relatively static over time. In contrast, if dividends grow over time the effects of inflation may be mitigated. The best way for a company to grow dividends over time is by growing earnings.

While stock screens cannot determine buy and sell investment recommendations, screens do provide a starting point for further research. Screens help narrow the universe of tens

A producer of high-end electric vehicles, Tesla Motors (TSLA) makes a great product that seems right for the times. I'd love to own one. In fact, you can't turn on the news without seeing something about energy independence, climate change and alternative energy, so it would seem, therefore, that Tesla is a prime candidate to benefit from changing energy, economic and social dynamics. However, I believe there are major barriers that demonstrate this may not be the case.

Indeed, in my opinion Tesla's financials appear to leave much to be desired.

Below I have outlined 6 reasons why I refuse to go near Tesla with any of my retirement savings. Keep in mind that I am a fairly conservative investor, so this decision is right for me. Consult a financial advisor to determine what is right for you.

The reasons I don't like Tesla as an investment range from valuation

Many investment funds are actively managed with the view that research and analysis will enable a portfolio manager to outperform the market.

Is active portfolio management really worth the expense (about 1-2%, depending on your fee structure) of owning a mutual fund? Or is it just a bunch of marketing hype? Should investors simply buy an S&P 500 Index ETF (SPY) with a 0.09% expense ratio and call it a day?

Here's the basic case for active management:

1. Manager can shift to cash to protect from downside

2. Manager can exploit security pricing inefficiencies

3. Manager can rebalance and reallocate across asset classes, sectors and geographies, depending on the mandate

If done correctly, the profit potential from active management is massive. This is why about $24 trillion globally is invested in mutual funds (Source: ICI 2012 Factbook). Everyone is looking to outperform.

Of course, not everyone can

As an investor seeking passive income, I frequently run screens for dividend-paying companies to potentially add to my roster. I'm lazy, so I'm looking to collect sustainable dividends from large, cheap, profitable companies. The screen is my short-cut to creating a short-list of potential candidates for additional research.

Don't get me wrong, while others may feel the need to dig deep into a company's prospects I acknowledge (and so do many academics and industry practitioners) that equity research is often of limited consequence. So, I use diversification to my advantage. That means that I buy enough cheap dividend paying stocks so that if one blows up (i.e. cuts the dividend) the impact to my total cash flow is minimal. That doesn't mean I go in blind...I simply don't dedicate more time than necessary to fruitless research.

Of course, Wall Street would have you believe you can do better using their

The world today is - as it always has been - a "ball of confusion" (to quote the 1980s pop group 'Love and Rockets'). I'm about to simplify it for you. Of course, I could be totally wrong and my thoughts today won't necessarily be my thoughts tomorrow, but that's the nature of a dynamic, integrated global market.

Let me start by explaining that nothing moves in a straight line. In fact, today we are trapped in a market cycle that seems to repeat every 6-12 months:

1. Markets tank and pessimism reigns

2. Central banks step in and add liquidity

3. Markets improve and confidence improves

4. The expectation for ongoing central bank support declines

5. Markets tank and pessimism reigns

As you can see we are in a catch 22!

Running parallel to this monetary-linked catch 22 are economic fundamentals. Like an ocean undercurrent, the flow of fundamentals is