September 18, 2011 at 12:27 PM EDT
Eight Facts That May Make or Break Your Portfolio
Editor Steve Christ takes a look at what moves the markets and offers eight facts that are important for your portfolio.

Facts and opinions make the stock market go round.

With that in mind, here are eight facts that may make or break your portfolio this year...

Fact: The typical U.S. family has gotten poorer during the past 10 years. Adjusting for inflation, median household income fell 2.3% to $49,445 last year and has dropped 7% since 2000. Meanwhile, the share of people living in poverty has hit 15.1% — the highest level since 1993.

Opinion: Productivity gains, global wage arbitrage, and a failing education system are dividing America into the haves and the have-nots. That's a serious drain for a country that relies on consumer spending for 70% of its GDP. Without real wage growth, “The American Dream” is a myth for the majority of workers.

Fact: U.S. motorists are on pace to spend $491 billion on gasoline this year — the most ever recorded. Meanwhile, overall energy prices are up 18.1% over the last 12 months, while food prices have jumped by 4.6%.

Opinion: The Misery Index lives. Rising food and energy costs have created a double whammy that is killing the recovery. You can thank your local Central Banker for this as you peer into your empty wallet.

miseryindexclick charts to enlarge

 Fact: Foreclosure filings rose 33% in August from July levels as more homebuyers fell behind on their mortgage payments. Meanwhile, 22.5% of all residential mortgages are currently under water according to CoreLogic. That means a full 10.9 million homes are now worth less than the note attached to them.

Opinion: Four years later, the housing bust is a gift that keeps on giving. However, the bottom will be reached this spring after another 5% decline in home prices. Believe it or not, I'm actually putting the beaten-down homebuilders on my 2012 watch list.

Fact: According to a new report from DigiTime, the Apple iPad 2 is selling so well that its manufacturer Foxconn will reportedly ship 20 million units to Apple in the third quarter. Meanwhile, Foxconn is also churning out as many as 150,000 iPhone 5s per day — at a pace of five to six million per month.

Opinion: With or without Steve Jobs, it's going to be a green Christmas for Apple (NASDAQ: AAPL) shareholders. Simply put, Apple's dominance in the consumer electronics space is staggering. With a projected earnings per share of $33.00 in 2012, AAPL is easily a $500 stock in the making.

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Fact: Oh, to be a gold bug... The shiny metal is up 28% so far this year, at a time when other commodities such as crude oil and copper have dropped. What's more, the Dow is off by 2.8% over the same period.

Opinion: For investors, gold's climb has been a chance to profit from two things: 1) a declining U.S. dollar; and 2) fears of a European collapse. When these two impressions begin to fade, the bubble will badly burst... but not before gold hits the $2,100 mark.

goldweekly

Fact: With 1.2 million employees, Foxconn may be China’s largest private employer. However, rising labor costs are forcing the company to replace factory workers with more than 1 million robots by 2013 (up from about 10,000 robots the company currently uses).

 Opinion: China's competitive edge has long been in its cheap labor. However, robots don't take breaks, they don't ask for raises, and even better for Foxconn, they do not commit suicide by jumping out of factory windows. In a world of better, faster, cheaper... robots will rule. I like Adept Technology (NASDAQ: ADEP) in this space.

Fact: Environmental concerns aside, Ohio Governor John Kasich has given the stamp of approval for horizontal fracking in his state. Meanwhile, Hess Corporation (NYSE: HES) has been busy in Ohio spending some $1.3 billion in two deals for rights to work 280,000 acres in the Utica Shale.

Opinion: The Utica Shale is just the latest piece in the bull market for American natural gas companies. I especially like the service companies connected to the horizontal drilling techniques that make it all possible. If you're looking for a path to energy independence, natural gas is one of the ways forward.

Fact: In the ten years ending in 2010, the S&P 500 dropped 4.7%. Yet if dividends are included, the index actually returned 15% to the upside. According to Fidelity Investments, dividends contributed 44% of the total return for the S&P 500 over the course of the last eighty years.

Opinion: If dividend stocks are not part of your portfolio, then you are not a serious investor. I name four stocks in this article that pay safe yields of more than 3% annually. Good luck trying to get that at your local bank...

As for more ways to make money in these markets, our editors have put together a few of their best ideas in this week's Wealth Daily and Energy and Capital articles, below.

Your bargain-hunting analyst,

 steve sig

Steve Christ
Editor, Wealth Daily

 

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Two Recession-Proof Secrets for Oil Investors: Infrastructure Investing
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Eight Facts That May Make or Break Your Portfolio originally appeared in Wealth Daily. Wealth Daily is a free daily newsletter featuring contrarian investment insights and commentary.
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