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Bond ETFs

Why You Will Lose Your Lovin’ Feeling For Central Banks

By | Bond ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, Global ETFs, Popular Posts, Real Estate ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Central banks across the globe have acquired $1.5 trillion in assets through the first five months of 2017. The monthly amount ($300 billion) has found its way into virtually every cranny and nook of the financial system. U.S. stocks, European stocks, emerging market equities, higher yielding junk bonds, convertibles, preferred shares, real estate investment trusts, real estate – you name it. Values have continued to climb in spite of inadequate economic growth. When a central bank buys assets with electronically printed…

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Why Doesn’t The Bond Market Believe The Stock Market?

By | Bond ETFs, Currency ETFs, Current Affairs and ETFs, Energy ETFs, ETF Philosophy, ETF Strategy, Internet ETFs, Large Cap ETFs, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

The S&P 500 struggled to gain price traction between the tail end of 2014 and the beginning of November in 2016. For many folks, the period represented 22 taxing months of uncertainty. Then came Trump. Suddenly, the investing community began soaking up the potential that corporate tax cuts, infrastructure spending and regulatory reform might revive a slow-growing economy. U.S. stocks rocketed to set records. In contrast, bond prices plummeted, as yields for the safer haven securities soared. Since the beginning…

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The Euphoria Debate: U.S. Stocks Versus U.S. Real Estate

By | Bond ETFs, Consumer ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Financial ETFs, Large Cap ETFs, Popular Posts, Small Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

When an asset class (e.g., stocks, bonds, commodities, real estate, collectibles, etc.) skyrockets in price – when it surges higher without sufficient economic reason – a bubble develops. Technology stocks in the late 1990s. Housing in the mid-2000s. When the asset class inevitably nose-dives? The balloon implodes. Speculative silliness has not been difficult for me to spot. As a national talk radio personality in the late 1990s, I warned stock investors not to get carried away by dot-com madness. A “New…

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Don’t Blame Minsky If Your Portfolio Value Crumbles

By | Bond ETFs, Consumer ETFs, Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Retail ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

Remember when the financial markets believed that tax cuts, regulatory reform and infrastructure spending would rev up the economic growth engine? The dollar surged. Bonds cratered. And stocks broke out of a 22-month collective funk. Yet expectations that a “business-friendly” Trump will offset higher borrowing costs have faded considerably. Consider the flattening of the yield curve. The spread between shorter term 2-year Treasury yields and longer-term 10-year Treasury yields is back below a scant 1 percentage point. This is more indicative…

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Buy U.S. Stocks Today? Graham Thinks You’re Nuts

By | Bond ETFs, Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Mid Cap ETFs, Popular Posts, Short ETFs, Small Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Would Warren Buffett’s mentor buy domestic stocks today? Probably not. The father of value investing, Benjamin Graham, would have trouble recommending a single U.S. company’s shares across thousands of possibilities. Need proof? In the fourteenth chapter of The Intelligent Investor, a classic that Mr. Buffett regarded as “…the best book on investing ever written,” Graham offered a seven-step test for stock selection. The criteria include: (1) adequate size with respect to revenue, (2) strong financial condition with respect to liquidity, (3) reasonable…

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It’s A Large-Cap Tech World After All

By | Bond ETFs, Consumer ETFs, Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Mid Cap ETFs, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | One Comment

Apple, Microsoft, Amazon, Facebook and Google (now Alphabet) account for roughly 13% of the S&P 500 SPDR Trust’s (SPY) price movement. The same 5 corporations? 42% of the NASDAQ 100’s (QQQ) price appreciation. The super-sized weighting of prominent tech companies in these benchmark ETFs has resulted in year-to-date gains of 7.1% and 16.6% respectively. Yet the rest of the market’s performance has been flat. Barely positive, in fact. Not sure? Take a look at the performance of small-cap and value-oriented…

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Rationalizing Stock Market Irrationality (Or, The Earth Might Be Flat)

By | Bond ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Popular Posts, Small Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

The repeal-n-replace health care bill needs a “Yes” vote from the House of Representatives on Thursday, March 23rd. With it, the financial markets may move higher on the belief that Trump/Congress will be able to pass corporate-friendly legislation from tax overhaul to regulatory reform. Without it, risk assets may stumble on the fear that political leaders will be unable to provide ambitious stimulus measures down the road. The prospect of lower taxes has always been at the heart of the…

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The Fed and Cheap Money: Are We Closing In On A Swan Song?

By | Bond ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Corporations have more than doubled their debt levels since 2008’s financial crisis, from $3.5 trillion to $8.1 trillion. They are carrying more leverage (e.g., debt-to-revenue, debt-to-EBITDA, etc.) than at any point since the 2000-2002 tech wreck. And the cash relative to the debt on corporate books has been dropping precipitously. Granted, one can choose to emphasize the inexpensive nature of the credit. Why shouldn’t companies borrow by the boatload as long as interest rates remain relatively contained? For one thing,…

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What If This Is As Good As It Gets?

By | Bond ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Popular Posts, Small Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

There are a handful of movies that suck me in whenever they come around. Goodfellas. The Godfather. The Shawshank Redemption. Still, there’s only one production where I can never get enough of the main character’s outlandishness. Melvin Udall in As Good As It Gets. He hoards bars of soap as part of an obsessive-compulsive disorder. He sneeringly berates a woman for admiring his work as an author. He even shoves the neighbor’s dog down a laundry chute. I watched the Jack…

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Bull Market’s Health Depends More On Congress Than Trump

By | Bond ETFs, Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

In a bull market, many investors come to believe that risk is synonymous with reward. “You’ve got to be in it to win it” or “If you don’t take chances, your wallet will forever remain empty.” In a bear market, the truth about risk is revealed. Specifically, steep financial losses are neither rewarding nor easily recovered. The average descent? 30%. And the average time to recover? Approximately three-and-one-quarter years. So, if an average bearish downtrend occurred right now, the S&P…

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