How To Squeeze Yields Up To 6.9% From Blue-Chip Stocks

Closeup of blue poker chip on red felt card table surface with spot light on chip

Preferred stocks are the little-known answer to the dividend question: How do I juice meaningful 5% to 6% yields from my favorite blue-chip stocks? “Common” blue chips stocks usually don’t pay 5% to 6%. Heck, the S&P 500’s current yield, at just 1.3%, is its lowest in decades.

But we can consider the exact same 505 companies in the popular index—names like JPMorgan Chase (JPM), Broadcom (AVGO) and NextEra Energy (NEE)—and find yields from 4.2% to 6.9%. If we’re talking about a million dollar retirement portfolio, this is the difference between $13,000 in annual dividend income and $42,000. Or, better yet, $69,000 per year with my top recommendation.

Most investors don’t know about this easy-to-find “dividend loophole” because most only buy “common” stock. Type AVGO into your brokerage account, and the quote that your machine spits back will be the common variety.

But many companies have another class of shares. This “preferred payout tier” delivers dividends that are far more generous.

Companies sometimes issue preferred stock rather than issuing bonds to raise cash. And these preferred dividends have a few benefits:

  • They receive priority over dividends paid on common shares.
  • Sometimes, preferred dividends are “cumulative”—if any dividends are missed, those dividends still have to be paid out before dividends can be paid to any other shareholders.
  • They’re typically far juicier than the modest dividends paid out on common stock. A company whose commons yield 1% or 2% might still distribute 5% to 7% to preferred shareholders.

But it’s not all gravy.

You’ll sometimes hear investors call preferreds “hybrid” securities. That’s because they act like a part-stock, part-bond holding. The way they resemble bonds is how they trade around a par value over time, so while preferreds can deliver price upside, they don’t tend to deliver much.

No, the point of preferreds is income and safety.

Now, we could go out and buy individual preferreds, but there’s precious little research out there allowing us to make a truly informed decision about any one company’s preferreds. Instead, we’re usually going to be better off buying preferred funds.

But which preferred funds make the cut? Let’s look at some of the most popular options, delivering anywhere between 4.2% to 6.9% at the moment.

Wall Street’s Two Largest Preferred ETFs

I want to start with the iShares Preferred and Income Securities (PFF, 4.2% yield) and Invesco Preferred ETF (PGX, 4.5%). These are the two largest preferred-stock ETFs on the market, collectively accounting for some $27 billion in funds under management.

On the surface, they’re pretty similar in nature. Both invest in a few hundred preferred stocks. Both have a majority of their holdings in the financial sector (PFF 60%, PGX 67%). Both offer affordable fees given their specialty (PFF 0.46%, PGX 0.52%).

There are a few notable differences, however. PGX has a better credit profile, with 54% of its preferreds in BBB-rated (investment-grade debt) and another 38% in BB, the highest level of “junk.” PFF has just 48% in BBB-graded preferreds and 22% in BBs; nearly a quarter of its portfolio isn’t rated.

Also, the Invesco fund spreads around its non-financial allocation to more sectors: utilities, real estate, communication services, consumer discretionary, energy, industrials and materials. Meanwhile, iShares’ PFF only boasts industrial and utility preferreds in addition to its massive financial-sector base.

PGX might have the edge on PFF, but both funds are limited by their plain-vanilla, indexed nature. That’s why, when it comes to preferreds, I typically look to closed-end funds.

Closed-End Preferred Funds

CEFs offer a few perks that allow us to make the most out of this asset class.

For one, most preferred ETFs are indexed, but all preferred CEFs are actively managed. That’s a big advantage in preferred stocks, where skilled pickers can take advantage of deep values and quick changes in the preferred markets, while index funds must simply wait until their next rebalancing to jump in.

Closed-end funds also allow for the use of debt to amplify their investments, both in yield and performance. Should the manager want, CEFs can also use options or other tools to further juice returns.

And they often pay out their fatter dividends every month!

Take John Hancock Preferred Income Fund II (HPF, 6.9% yield), for example. It’s a tighter portfolio than PFF or PGX, at just under 120 holdings from the likes of CenterPoint Energy (CNP), U.S. Cellular (USM) and Wells Fargo (WFC).

Manager discretion means a lot here. That is, HPF doesn’t just invest in preferreds, which are 70% of assets. It also has 22% invested in corporate bonds, another 4% or so in common stock, and trace holdings of foreign stock, U.S. government agency debt and cash. And it has a whopping 32% debt leverage ratio that really helps prop up the yield and provide better returns (though at the cost of a bumpier ride).

You have a similar situation with Flaherty & Crumrine Preferred and Income Securities Fund (FFC, 6.7%).

Here, you’re wading deep into the financial sector at nearly 80% exposure, with decent-sized holdings in utilities (7%) and energy (7%). Credit quality is roughly in between PFF and PGX, with 44% BBB, 37% BB and 19% unrated.

Nonetheless, smart management selection (and a healthy 31% in debt leverage) has led to far better, albeit noisier, returns than its indexed competitors. The Cohen & Steers Select Preferred and Income Fund (PSF, 6.0%) is about as pure a play as you could want in preferreds.

And it’s also a pure performer.

PSF is 100% invested in preferred stock (well, more like 128% if you count debt leverage), and actually breaks out its preferreds into institutionals that trade over-the-counter (83%), retail preferreds that trade on an exchange (16%) and floating-rate preferreds that trade OTC or on exchanges (1%).

Like any other preferred fund, you’re heavily invested in the financial sector at nearly 73%. But you do get geographic diversification, as only a little more than half of PSF’s assets are invested in the U.S. Other well-represented countries include the U.K. (13%), Canada (7%) and France (6%).

What’s not to love?

Brett Owens is chief investment strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: Your Early Retirement Portfolio: 7% Dividends Every Month Forever.

I graduated from Cornell University and soon thereafter left Corporate America permanently at age 26 to co-found two successful SaaS (Software as a Service) companies. Today they serve more than 26,000 business users combined. I took my software profits and started investing in dividend-paying stocks. Today, it’s almost impossible to find good stocks that pay a quality yield. So I employ a contrarian approach to locate high payouts that are available thanks to some sort of broader misjudgment. Renowned billionaire investor Howard Marks called this “second-level thinking.” It’s looking past the consensus belief about an investment to map out a range of probabilities to locate value. It is possible to find secure yields of 6% or more in today’s market – it just requires a second-level mindset.

Source: How To Squeeze Yields Up To 6.9% From Blue-Chip Stocks

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Critics:

A blue chip is stock in a stock corporation (contrasted with non-stock one) with a national reputation for quality, reliability, and the ability to operate profitably in good and bad times. As befits the sometimes high-risk nature of stock picking, the term “blue chip” derives from poker. The simplest sets of poker chips include white, red, and blue chips, with tradition dictating that the blues are highest in value. If a white chip is worth $1, a red is usually worth $5, and a blue $25.

In 19th-century United States, there was enough of a tradition of using blue chips for higher values that “blue chip” in noun and adjective senses signaling high-value chips and high-value property are attested since 1873 and 1894, respectively. This established connotation was first extended to the sense of a blue-chip stock in the 1920s. According to Dow Jones company folklore, this sense extension was coined by Oliver Gingold (an early employee of the company that would become Dow Jones) sometime in the 1920s, when Gingold was standing by the stock ticker at the brokerage firm that later became Merrill Lynch.

Noticing several trades at $200 or $250 a share or more, he said to Lucien Hooper of stock brokerage W.E. Hutton & Co. that he intended to return to the office to “write about these blue-chip stocks”. It has been in use ever since, originally in reference to high-priced stocks, more commonly used today to refer to high-quality stocks.

References:

Asia Becomes Epicenter of Market Fears Over Slowdown in Growth

Asia is emerging as the epicenter for investor worries over global growth and the spread of coronavirus variants. While their peers in the U.S. and Europe remain near record highs, Asian stocks have fallen back in recent months amid slowing Chinese economic growth and a glacial rollout of vaccines. The trend accelerated Friday with the benchmark MSCI Asia Pacific Index briefly erasing year-to-date gains for the second time in as many months.

“Asia was seen as the poster child in pandemic response last year, but this year the slow vaccination rollout in most countries combined with the arrival of the delta variant means another lost year,” said Mark Matthews, head of Asia research with Bank Julius Baer & Co. in Singapore. “I suspect Asia will continue to lag as long as vaccination rollouts remain at their relatively sluggish levels and high daily new Covid counts prevent them from lifting mobility restrictions.”

The growing jitters in the region comes as investor concerns shift from runaway inflation to an early withdrawal of stimulus by central banks. China’s authorities signaled earlier this week they may soon unleash more support for the economy, suggesting the world’s fastest-pandemic recovery may be weaker than it appears.

A fresh regulatory crackdown on Chinese tech stocks this week has also impacted investor sentiment in the region. The Hang Seng China Enterprises Index fell briefly into a technical bear market Friday, led by weakness in the sector.

While Asia bore the brunt of the retreat in global equities, havens in other asset classes from Treasuries to the yen have rallied, and the rotation toward economically-sensitive cyclical stocks from their high-priced growth counterparts continued to unwind.

“It’s a sign of how challenging the reopening process is,” Marvin Loh, State Street senior global market strategist, said in an interview with Bloomberg TV. “What the PBOC is going through as well as these variants that keep popping up around the world shows it’s going to be an uneven process. Maybe a normalization tightening policy is not necessarily going to be as fluid.”

Covid Challenge

Covid 19 remains a key challenge. In Japan, Tokyo has declared a renewed state of emergency to combat the resurgent virus, banning spectators from the Olympics and pushing the Nikkei 225 Stock Average toward a correction. South Korea is intensifying social distancing measures in Seoul while Indonesia is battling a virus resurgence that has crippled its health system.

“Asian equities are being particularly impacted by the rebound in coronavirus cases in the region, fears about the impact of that on regional growth and concern that we may now have seen the best of the rebound globally,” said Shane Oliver, head of investment strategy with AMP Capital Investors in Sydney. “Asian shares may have led the way on this but coronavirus concerns may also weigh on global shares generally.”

For the APAC region, recent trade deals will likely invigorate and deepen economic integration over the coming few years. In late 2020, China, Japan, South Korea, Australia, New Zealand and 10 Association of Southeast Asian Nations (ASEAN) members signed the Regional Comprehensive Economic Partnership (RCEP) agreement after eight years of negotiation.

When fully implemented in 2022, RCEP will represent the world’s biggest trading bloc, covering about 30% of global GDP and trade. In addition, China concluded a Comprehensive Agreement on Investment (CAI) with the EU on the last day of 2020. The EU is China’s second-largest trading partner and the CAI will cover broad market access, including to key sectors such as alternative energy vehicles and medical services.

Although these trade deals will not have an immediate economic impact, in the medium term the treaties should cement Asia as the world’s most dynamic economic bloc embracing free trade, investment and globalization. They should also help to counter the disruptive geopolitical tensions and encourage the post-pandemic economic recovery in Asia.

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Critics:
The economy of Asia comprises more than 4.5 billion people (60% of the world population) living in 49 different nations. Asia is the fastest growing economic region, as well as the largest continental economy by both GDP Nominal and PPP in the world. Moreover, Asia is the site of some of the world’s longest modern economic booms, starting from the Japanese economic miracle (1950–1990), Miracle on the Han River (1961–1996) in South Korea, economic boom (1978–2013) in China, Tiger Cub Economies (1990–present) in Indonesia, Malaysia, Thailand, Philippines, and Vietnam, and economic boom in India (1991–present).
 
As in all world regions, the wealth of Asia differs widely between, and within, states. This is due to its vast size, meaning a huge range of different cultures, environments, historical ties and government systems. The largest economies in Asia in terms of PPP gross domestic product (GDP) are China, India, Japan, Indonesia, Turkey, South Korea, Saudi Arabia, Iran, Thailand and Taiwan and in terms of nominal gross domestic product (GDP) are China, Japan, India, South Korea, Indonesia, Saudi Arabia, Turkey, Taiwan, Thailand and Iran.
 
East Asian and ASEAN countries generally rely on manufacturing and trade (and then gradually upgrade to industry and commerce), and incrementally building on high-tech industry and financial industry for growth, countries in the Middle East depend more on engineering to overcome climate difficulties for economic growth and the production of commodities, principally Sweet crude oil.
 
Over the years, with rapid economic growth and large trade surplus with the rest of the world, Asia has accumulated over US$8.5 trillion of foreign exchange reserves – more than half of the world’s total, and adding tertiary and quaterny sectors to expand in the share of Asia‘s economy.

References

 

 

 

 

 

Stocks, U.S. Futures Dip on Delta Strain Concerns: Markets Wrap

Asian stocks dipped Tuesday amid concerns a more infectious Covid-19 strain will derail an economic recovery. Treasuries and the dollar were steady after gains.

An MSCI index of Asia-Pacific shares was on track for its first decline in six days as countries in the region are struggling to contain the highly transmissible Delta variant of the virus. U.S. futures dipped after technology stocks led U.S. benchmarks to fresh records Monday. New limits on travel from Britain, which is seeing a spike in cases, dragged on cruise operators and airlines.

The Treasury yield curve flattened amid month-end index rebalancing and the break in auctions until July 12, reducing supply. Oil extended a decline with the market expecting OPEC+ producers to increase supply at an upcoming meeting. Bitcoin was steady around mid-$34,000.

Global stocks are poised to close out their fifth quarterly advance amid a worldwide vaccine rollout that powered an economic recovery and sparked concerns about increasing prices pressures and the withdrawal of stimulus measures. The recovery also drove the reflation trade as more economies reopened, though that is being hampered as some countries, especially in Asia, are falling behind in their vaccine strategies.

The U.S. is now the best place to be during the pandemic due to its fast and expansive vaccine rollout stemming what was once the world’s worst outbreak. Meanwhile, parts of the Asia-Pacific region that performed well in the ranking until now — like Singapore, Hong Kong and Australia — dropped as strict border curbs remain in place.

“The Delta variant has also emerged in our client conversations as a potential threat to reflation/inflation,” JPMorgan Chase & Co. strategists led by Marko Kolanovic said. “The economic consequences are likely to be limited given progress on vaccinations across developed market economies. It could, however, pose some risk of a delay in the recovery in countries where vaccination rates remain lower.”

Read: Asean Equities May Have Priced In Virus Setback: Taking Stock

For more market commentary, follow the MLIV blog.

Here are some events to watch in the markets this week:

  • OECD meets in Paris to finalize a proposal to overhaul global minimum corporate taxation Wednesday
  • China’s President Xi Jinping will deliver a speech as the nation marks the 100th anniversary of the founding of the Chinese Communist Party Thursday
  • OPEC+ ministerial meeting Thursday
  • ECB President Christine Lagarde speaks Friday
  • The U.S. jobs report is due Friday

These are some of the main moves in markets:

Stocks

  • S&P 500 futures dipped 0.1% as of 1:26 p.m. in Tokyo. The S&P 500 rose 0.2%
  • Nasdaq 100 futures fell 0.2%. The Nasdaq 100 rose 1.3%
  • Topix index fell 1%
  • Australia’s S&P/ASX 200 Index dropped 0.4%
  • Kospi index lost 0.6%
  • Hang Seng Index retreated 0.8%
  • Shanghai Composite Index was down 1%
  • Euro Stoxx 50 futures were little changed

Currencies

  • The yen traded at 110.56 per dollar
  • The offshore yuan was at 6.4638 per dollar
  • The Bloomberg Dollar Spot Index edged up
  • The euro traded at $1.1913

Bonds

  • The yield on 10-year Treasuries held at 1.48%
  • Australia’s 10-year bond yield dropped five basis points to 1.53%

Commodities

  • West Texas Intermediate crude was at $72.56 a barrel, down 0.5%
  • Gold was at $1,774.24, down 0.2%

— With assistance by Rita Nazareth, Vildana Hajric, and Nancy Moran

By:

Source: Stock Market Today: Dow, S&P Live Updates for Jun. 29, 2021 – Bloomberg

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Critics:

Beginning on 13 May 2019, the yield curve on U.S. Treasury securities inverted, and remained so until 11 October 2019, when it reverted to normal. Through 2019, while some economists (including Campbell Harvey and former New York Federal Reserve economist Arturo Estrella) argued that a recession in the following year was likely,other economists (including the managing director of Wells Fargo Securities Michael Schumacher and San Francisco Federal Reserve President Mary C. Daly) argued that inverted yield curves may no longer be a reliable recession predictor.

The yield curve on U.S. Treasuries would not invert again until 30 January 2020 when the World Health Organization declared the COVID-19 outbreak to be a Public Health Emergency of International Concern, four weeks after local health commission officials in Wuhan, China announced the first 27 COVID-19 cases as a viral pneumonia strain outbreak on 1 January.

The curve did not return to normal until 3 March when the Federal Open Market Committee (FOMC) lowered the federal funds rate target by 50 basis points. In noting decisions by the FOMC to cut the federal funds rate by 25 basis points three times between 31 July and 30 October 2019, on 25 February 2020, former U.S. Under Secretary of the Treasury for International Affairs Nathan Sheets suggested that the attention of the Federal Reserve to the inversion of the yield curve in the U.S. Treasuries market when setting monetary policy may be having the perverse effect of making inverted yield curves less predictive of recessions.

See also

 

Future Careers Get A Much-Needed Shot In The Arm

Cognizant’s “Jobs of the Future Index” posts a 29% increase as tech-oriented job markets begin to return to normal, notes Robert Brown, a futurist within the company’s Center for the Future of Work. The US labor market is recovering faster than expected, as successful vaccination programs and stimulus dollars generate sweeping impacts throughout the nation.

The $1.9 trillion American Rescue Plan Act of 2021, together with the full inoculation of 51 million Americans by the close of the first quarter (and at least partial inoculation of more than 50% of the adult population by April’s end), are instilling confidence in both consumers and businesses. The accelerated use of and reliance on digital technology during the pandemic are now being accompanied by long-term investment in a digitally enabled workforce to meet the needs of tomorrow.

Cognizant’s “Jobs of the Future Index (CJoF Index)” tracks demand for 50 digitally enabled jobs of the future identified by Cognizant’s Center for the Future of Work, capturing the quarterly fluctuations in postings for these jobs. In the first quarter of 2021, the growth of the CJoF Index outpaced that of the Burning Glass jobs index by nearly 10%.

The CJoF increased 28.8% from the previous quarter (from an index figure of 1.22 to 1.57). The Burning Glass index posted a quarter-on-quarter increase of 18.9%, rising from 1.45 to 1.72. These are the greatest gains for either index in the past two years, signaling not only a strengthening labor market but also a larger shift from business survival to digital growth and expansion.

Note, however, that growth notwithstanding, digitally enabled job postings remain far below pre-pandemic levels. The CJoF Index posted a severe year-on-year decline of 22.2%, dropping from 2.02 in Q1 2020 (its highest value ever) to 1.57 in Q1 2021. Growth in digitally enabled positions, which broadly represent higher-wage earners and larger investments for employers, signals longer-term economic confidence — which has yet to be fully achieved.

In contrast, the demand for all jobs is on the verge of bouncing back; the Burning Glass index posted a negligible year-on-year decline of 2.8%. That’s because brick-and-mortar jobs have been more susceptible to business restrictions and lockdowns; they’re now seeing a rush of activity as the economy reopens.

A rising tide: Quarterly growth for all CJoF job families

In addition to total job openings, the CJoF Index monitors trends in eight job families: Algorithms, Automation and AI; Customer Experience; Environment; Fitness and Wellness; Healthcare; Legal and Financial Services; Transport; and Work Culture.

In the first quarter, all eight families registered quarter-on-quarter increases, with the most modest growth in Work Culture (14.5%) and Healthcare (18.5%). Over the quarter, Fitness and Wellness (137.8%) and Transport (38.0%) emerged as top-performing jobs families after experiencing the largest declines in Q4 2020.

Measured over the year, seven of eight families posted declines: Work Culture (-27.8%), Algorithms, Automation and AI (-24.3%), Transport (-16.9%), Customer Experience (-15.7%), Legal and Financial Services (-13.1%), Environmental (-2.8%), and Fitness and Wellness (-2.3%) all dropped. Healthcare (12.4%) was the only family in the CJoF Index to register year-on-year growth.

The Fitness and Wellness family posted the sharpest quarterly increase in job postings (+137.8%) thanks to especially strong growth in digitally enabled Caregiver/Personal Care Aide (249.5%) and Home Health Aide (156.5%) postings. These two job categories have experienced much volatility during the pandemic, running countercyclical with expectations for the progression of the virus.

During declines in the number of new COVID-19 cases in Q1 2021, patients underwent long-postponed elective and routine medical procedures, thereby increasing the demand for in-home care.

Also noteworthy was the Transport family, which realized the second-largest increase (38.0%), led by gains in job postings for Aerospace Engineer (47.6%) and Urban/Transportation Planner (42.1%). The most recent federal stimulus package provided a much-needed lifeline to the travel industry, which was hit hard by the pandemic.

Algorithms, Automation and AI, the largest family in the CJoF Index, realized a 28.3% gain over the quarter. Within this family, 15 of the 16 individual job indexes registered quarter-on-quarter growth. However, only five categories showed year-over-year expansion. Unsurprisingly, each of these also saw growth for the quarter in Q1 2021: Robotics Engineer (73.0%), Robotics Technician (50.2%), Chief Information Officer/Director of Information Technology (47.1%), Mechatronics Engineer (45.7%), and Data Scientist (+42.2%).

The pandemic dampened tech hiring despite the increased reliance on digital technologies to facilitate collaboration and interaction among remote workers. But experts predict that tech occupations will recover to their pre-pandemic strength in 2021 as organizations accelerate their adoption of cloud strategies and artificial intelligence (AI) solutions.

Quarterly ups and downs

In Q4 2020, the fastest-growing jobs in the CJoF Index were:

  • Caregiver/Personal Care Aide (+249.5%)
  • Home Health Aide (+156.5%)
  • Solar Engineer (+131.9%)
  • Sustainability Specialist (+126.1%)
  • Genetic Counselor (+123.3%)

Jobs that posted the largest declines for the quarter were:

  • Solar Installer (-22.4%)
  • Alternative Energy Manager (-20.8%)
  • Fashion Designer (-10.4%)
  • Surveillance Officer/Investigator (-4.6%)
  • Career Counselor (-2.1%)

Annual ups and downs

The fastest-growing jobs in the CJoF Index for the year ending with Q1 2021 were:

  • Solar Engineer (+263.3%)
  • Genetic Counselor (+123.3%)
  • Registered Nurse (+81.0%)
  • Solar Installer (+49.1%)
  • Sustainability Specialist (+39.0%)

Jobs that posted the largest declines during this period were:

  • Physician (-60.9%)
  • Career Counselor (-57.2%)
  • Fashion Designer (-42.3%)
  • Health Information Manager/Director (-35.4%)
  • Alternative Energy Manager (-34.5%)

We encourage you to review our overall index on a regular basis, as these COVID-19-driven shocks continue to alter the landscape of jobs of the future — and jobs of the now. Visit our Cognizant Jobs of the Future Index page to see the most up-to-date data and analysis.

Robert Hoyle Brown is a Vice President in Cognizant’s Center for the Future of Work and drives strategy and market outreach for Cognizant’s Business Process Services business unit. He is also a regular contributor to the CFoW blog. Prior to joining Cognizant, he was Managing Vice President of the Business and Applications Services team at Gartner, and as a research analyst, he was a recognized subject matter expert in BPO, cloud services/BPaaS and HR services. Robert also held roles at Hewlett-Packard and G2 Research, a boutique outsourcing research firm in Silicon Valley. He holds a bachelor’s degree from the University of California at Berkeley and, prior to his graduation, attended the London School of Economics as a Hansard Scholar. He can be reached at Robert.H.Brown@cognizant.com

Source: Future Careers Get A Much-Needed Shot In The Arm

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Career Development Perspectives- Individual versus Organizational Needs

An individual’s personal initiatives that they pursue for their career development are primarily concerned with their personal values, goals, interests, and the path required to fulfill these desires. A degree of control and sense of urgency over a personal career development path can require an individual to pursue additional education or training initiatives to align with their goals.

In relation, John L. Holland’s 6 career anchors categorizes people to be investigative, realistic, artistic, social, enterprising, and conventional, in which the career path will depend on the characteristic that an individual may embody. The more aware an individual is of their personality type, the better alignment of career development and opportunities they may obtain.

The factors that influence an individual to make proper career goal decisions also relies on the environmental factors that are directly affecting them. Decisions are based on varying aspects affecting work-life balance, desires to align career options with their personal values, and the degree of stimulation or growth.

A corporate organization can be sufficient in providing career development opportunities through the Human Resources functions of Training and Development.The primary purpose of Training and Development is to ensure that the strategic planning of the organizational goals will remain adaptable to the demands of a changing environment.

Upon recruiting and hiring employees, an organization’s Human Resource department is responsible for providing clear job descriptions regarding the job tasks at hand required for the role, along with the opportunities of job rotation, transfers, and promotions. Hiring managers are responsible for ensuring that the subordinates are aware of their job tasks, and ensure the flow of communication remains efficient.

In relation, managers are also responsible for nurturing and creating a favorable work environment to work in, to foster the long term learning, development, and talent acquisition of their subordinates. Consequently, the extent to which a manager embraces the delegation of training and developing their employees plays a key factor in the retention and turnover of employees

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References

  • Driver., and Cooper, Michael J., and Ivan T. (1988). International review of industrial and organizational psychology. Los Angeles, CA: University of South California. pp. 245–277. ISBN 0-471-91844-X.
  • McDonald., and Hite, Kimberly., and Linda (2016). Career development: a human resource development perspective. New York, New York: Oxfordshire, [England]: Routledge. pp. 2-4. ISBN 9781138786127.
  • McDonald., and Hite, Kimberly., and Linda (2016). Career development: a human resource development perspective. New York, New York: Oxfordshire, [England]: Routledge. pp. 16-18. ISBN 9781138786127.
  • McDonald., and Hite, Kimberly., and Linda (2016). Career development: a human resource development perspective. New York, New York: Oxfordshire, [England]: Routledge. pp. 20. ISBN 9781138786127.
  • Driver., and Cooper, Michael J., and Ivan T. (1988). International review of industrial and organizational psychology. Los Angeles, CA: University of South California. pp. 245–277. ISBN 0-471-91844-X.
  • “Task management”, Wikipedia, 2020-10-20, retrieved 2020-11-26
  • Driver., and Cooper, Michael J., and Ivan T. (1988). International review of industrial and organizational psychology. Los Angeles, CA: University of South California. pp. 245–277. ISBN 0-471-91844-X.
  • McDonald., and Hite, Kimberly., and Linda (2016). Career development: a human resource development perspective. New York, New York: Oxfordshire, [England]: Routledge. pp. 16-17. ISBN 9781138786127.
  • “Hollands Occupational Personality Types” (PDF). hopkinsmedicine.org. Retrieved 2020-12-14.
  • McDonald., and Hite, Kimberly., and Linda (2016). Career development: a human resource development perspective. New York, New York: Oxfordshire, [England]: Routledge. pp. 19-20. ISBN 9781138786127.
  • McDonald., and Hite, Kimberly., and Linda (2016). Career development: a human resource development perspective. New York, New York: Oxfordshire, [England]: Routledge. pp. 38-44. ISBN 9781138786127.
  • McDonald., and Hite, Kimberly., and Linda (2016). Career development: a human resource development perspective. New York, New York: Oxfordshire, [England]: Routledge. pp. 38-41. ISBN 9781138786127.
  • McDonald., and Hite, Kimberly., and Linda (2016). Career development: a human resource development perspective. New York, New York: Oxfordshire, [England]: Routledge. pp.46. ISBN 9781138786127.
  • McDonald., and Hite, Kimberly., and Linda (2016). Career development: a human resource development perspective. New York, New York: Oxfordshire, [England]: Routledge. pp. 40-46. ISBN 9781138786127.
  • Barbose de Oliveira, Lucia; Cavazotte, Flavia; Dunzer, Rodrigo Alan (2019). “The interactive effects of organizational and leadership career management support on job satisfaction and turnover intention”. The International Journal of Human Resource Management. 30., no 10 (10): 1583–1603. doi:10.1080/09585192.2017.1298650 – via Routledge, Taylor and Francis Group.
  • McDonald., and Hite, Kimberly., and Linda (2016). Career development: a human resource development perspective. New York, New York: Oxfordshire, [England]: Routledge. pp. 20-21. ISBN 9781138786127.
  • Barnett, R. C. and Hyde, J. S. 2001. “Women, Men, Work, and Family.” American Psychologist 56:781-796.Pope, M. (2009). Jesse Buttrick Davis (1871-1955): Pioneer of vocational guidance in the schools. Career Development Quarterly, 57, 278-288.

 

Strong Buyout Fund Returns Drive Private Equity Stocks Higher

Private equity

Over the past decade, as private equity firms like Blackstone, KKR and Carlyle Group have grown into a gargantuan size and raised buyout funds nearing or eclipsing $20 billion, one critique of their cash gusher was that it would inevitably drive fund returns lower. Now, as the U.S. economy emerges from the Coronavirus pandemic and markets soar to new record highs, recent earning results from America’s big buyout firms reveal a trend of rising returns even as funds surged in size.

Fueled by piping-hot financial markets, returns from the flagship private equity funds of Blackstone, KKR and Carlyle are on the rise. Mega funds from these firms that recently ended their investment period are all running ahead of their prior vintages and raise the prospect that PE firms can achieve net investment return rates nearing or exceeding 20%.

Carlyle, which reported first quarter earnings on Thursday morning, is the newest firm to exhibit rising performance. Its $13 billion North American buyout fund, Carlyle Partners VI, which was launched in 2014 and ended its investment period in 2018, is now being marked at a 21% gross investment rate of return and a net return of 16%, or a 2.2-times multiple on invested capital.

The fund has realized $8.8 billion of investments, like insurance brokerage PIB Group and consultancy PA Consulting, and sits on a portfolio marked at nearly $20 billion. The returns are two-to-three percentage points ahead of Carlyle Partners V, the flagship buyout fund it raised just before the financial crisis. That fund is on track to earn a net IRR of of 14%, or a multiple of 2.1-times its invested capital.

Rising fund profitability, even at scale, is helping to fuel Carlyle’s overall profitability. Net accrued performance fees from Carlyle VI ended the quarter at nearly $1.4 billion and Carlyle sits on a record $3.2 billion in such performance fees that will likely be fully realized in 2021. The firm’s once-lagging stock has recently risen to new record highs.

The trend is even more clear at Blackstone and KKR, which have both used spongy IPO markets to realize multi-billion dollar investment windfalls in recent months.

Blackstone’s flagship $18 billion private equity fund, Blackstone Capital Partners VII, was closed in May 2016 and ended its investment period in February 2020, just before the Covid-19 economic meltdown. After taking public or exiting investments like Bumble, Paysafe and Refinitiv, this fund is now marked at a 18% net investment rate of return, five percentage points better than its prior fund, which raised in the aftermath of the 2008 crisis.

In the past two quarters, the fund has been the single biggest driver of Blackstone’s record profitability, generating over $1.6 billion in combined accrued performance fees. In the first quarter, the fund was responsible for 82-cents in quarterly per-share profits, filings show. Overall, Blackstone sits on a record $5.2 billion in net accrued performance fees.

At KKR, it’s a similar story. The firm’s $8.8 billion Americas XI fund, which was raised in 2012 and ended its investment period in 2017, is generating net IRRs of 18.5%, or a 2.2-times multiple on invested capital, according to the its annual 10-k filing from February. That sets up the fund to be KKR’s most profitable buyout fund since the 1990s.

KKR’s first quarter results, set to be released in early May, may show even bigger windfalls and higher returns. Its recent public offering of Applovin looks to be one of the greatest windfalls in the firm’s history, bolstering returns and profits for its even newer $13.5 billion Americas Fund XII. Asia could also be an area of big returns as its $9 billion Asian Fund III monetizes investments.

As returns rise, PE firms have seen their stocks soar to new record highs.

Once a laggard, Carlyle is up 36% year-to-date to a new record high above $42, according to Morningstar data. The firm, now led by chief executive Kewsong Lee, has returned an annual average of 23% over the past five-years.

KKR has done even better, rising 40% this year alone and 125% over the past 12-months. It’s five and ten-year total stock returns are now 33% and 13.5%, respectively.

The top performer in the industry is Blackstone Group, which recently eclipsed a $100 billion market value. Up 39% this year alone, Blackstone’s generated an average annualized total return of nearly 19% over the past decade, which is about five-percentage-points better annually than the S&P 500 Index.

Bottom Line: With public markets hitting new record highs, buyout firms are reporting LBO returns not seen since the 1990s. Their stocks, which once badly lagged the S&P 500, are beginning to beat the market.

I’m a staff writer and associate editor at Forbes, where I cover finance and investing. My beat includes hedge funds, private equity, fintech, mutual funds, mergers, and banks. I’m a graduate of Middlebury College and the Columbia University Graduate School of Journalism, and I’ve worked at TheStreet and Businessweek. Before becoming a financial scribe, I was a member of the fateful 2008 analyst class at Lehman Brothers. Email thoughts and tips to agara@forbes.com. Follow me on Twitter at @antoinegara

Source: Strong Buyout Fund Returns Drive Private Equity Stocks Higher

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Tesla, Netflix Slammed As Stocks Fall On Weak Jobs Data, Trump Covid Case

The announcement that Donald Trump tested positive for coronavirus triggered a sell-off in early morning trading around the world on Friday that tapered off by day’s end. Tech stocks, however, failed to recover, as Wall Street investors prepare for increased volatility in the weeks leading up to the election.

Key Facts

The tech-heavy Nasdaq ended the day down 251 points, or 2.2%, while the Dow Jones Industrial Average shed 134 points, or 0.5%, and the S&P 500 fell 1%.

Tech stocks were among Friday’s biggest losers, with Tesla and Netflix falling 7% and 5%, respectively, while Apple and Microsoft were each down 3%.

Cboe’s VIX Index, which measures volatility expectations based on options contracts, at one point jumped up more than 7%, reaching its highest point since early September, when tech stocks corrected and the Nasdaq had its fastest 10% plunge in history.

U.S. airline stocks proved a bright spot in the Friday market after House Speaker Nancy Pelosi said lawmakers were preparing relief for the industry through either a broad-based stimulus bill or standalone legislation.

The S&P 500 Airlines Industry Index ended the day up 2.3%.

Jobs data released before the market open revealed that U.S. employers added just 661,000 jobs in September, about 25% less than the 859,000 new jobs economists were forecasting and less than half of the nearly 1.5 million jobs the economy added back in August.

The unemployment rate of 7.9% was better than the forecast of 8.2%, but it’s still far below the 3.5% unemployment rate in February–before governments shut down businesses after a domestic spike in coronavirus cases.

Key Background

Donald Trump announced in a tweet shortly after midnight on Friday that he and First Lady Melania had tested positive for Covid-19, adding that they’d begin quarantining “immediately.” The announcement triggered an immediate sell-off in stock futures and initially rattled global equity markets, but losses have since pulled back: Japan’s Nikkei Index closed down about 0.7%, but France’s CAC 40 and the United Kingdom’s FTSE 100 managed to turn positive for the day, though their gains remained below 1%.

The Dow and S&P 500 each ended Thursday, the first day of fourth-quarter trading, virtually flat after stimulus negotiations between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin reached a standstill. September was the worst month for U.S. stocks since May, and history has shown that October is generally a volatile month for stocks–even more so during election years.

Crucial Quote

“The news of Trump contracting Covid-19 could completely change the direction of the campaign and adds to our already cautious outlook on the stock market,” said James McDonald, the CEO of Los Angeles-based Hercules Investments. “[It] will elevate institutional money’s preparation for a Democratic White House and all the tax, trade and budget implications that go along with it. We expect institutional investors to start de-risking portfolios and increasing hedges in preparation for market volatility.”

Further Reading

Trump’s Covid Diagnosis Rattles Markets: Here’s What Wall Street Thinks Happens Next (Forbes)

Here’s What The Last Jobs Report Before The Presidential Election Means For Voters (Forbes)

U.S. Futures, European Stocks Drop Following Trump’s Covid-19 Diagnosis (Forbes)

Dow Futures Down 400 Points After Trump Tests Positive For Covid-19 (Forbes) Follow me on Twitter. Send me a secure tip.

Jonathan Ponciano

 Jonathan Ponciano

I’m a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism and economics while working for UNC’s Kenan-Flagler Business School as a marketing and communications assistant. Before Forbes, I spent a summer reporting on the L.A. private sector for Los Angeles Business Journal and wrote about publicly traded North Carolina companies for NC Business News Wire. Reach out at jponciano@forbes.com.

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CNBC’s “Squawk on the Street” watch how stocks perform as the market opens, and the team discusses how the White House is responding to President Trump’s coronavirus diagnosis. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi U.S. stocks fell in volatile trading on Friday after President Donald Trump’s coronavirus diagnosis fueled concerns about the election and a worsening pandemic. Major averages clawed back some of the steep losses after House Speaker Nancy Pelosi signaled aid for the airline industry could be coming soon, perhaps even as part of a much-anticipated broad relief bill. The Dow Jones Industrial Average closed 134.09 points, or 0.5%, lower at 27,682.81 after dropping 430 points at its session low. The S&P 500 slid 1.0%, or 32.36 points, to 3,248.44 after falling as much as 1.7% earlier. The Nasdaq Composite declined 2.2%, or 251.49 points, to 11,075.02. Shares of airlines jumped higher in unison after Pelosi called on the industry to delay furloughs, saying relief for airline workers is “imminent.” American Airlines and United erased earlier losses and popped 3.3% and 2.4%, respectively. “We will either enact Chairman DeFazio’s bipartisan stand-alone legislation or achieve this as part of a comprehensive negotiated relief bill, extending for another six months the Payroll Support Program,” Pelosi said in a statement. Earlier Friday, Pelosi said Trump’s illness changed the dynamic of stimulus talks, adding lawmakers will find the “middle ground” and will “get the job done.” The House passed the $2.2 trillion Democratic coronavirus stimulus bill Thursday night, while Treasury Secretary Steven Mnuchin has offered a $1.6 trillion package. Still, the president’s diagnosis added more uncertainty to the election, an event that was already weighing on the market and keeping traders on edge as they attempted to evaluate the possible outcomes. It also raised concerns about a second wave of the virus and a slower reopening. » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-n… Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

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