Category

Commodity ETFs

What Happens To ‘Hold-N-Hope’ Portfolios When An Economy Struggles To Expand?

By | Bond ETFs, Commodity ETFs, Currency ETFs, Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, ETF Strategy, US Markets and ETFs | No Comments

Some analysts may dismiss 115 years of economic data. I do not. In particular, if one averages the results of four respected stock valuation methodologies, one finds that stocks are wildly expensive. Greater irrationality in stock price exuberance only existed during conditions prior to the Great Depression circa 1929 and the tech wreck of 2000. Consider the chart below. Based on the analysis by Doug Short, the widely cited Vice President of Research at Advisor Perspectives, the U.S. stock market is overvalued by…

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Are You Considering “Sell In May, Go Away?”

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

One of the signs that a stock market may be transitioning from a bull to a bear? Participants dismiss exorbitant valuations, cast aside disturbing shifts in technical trends, disregard economic stagnation and scoff at historical comparisons. For instance, it has been 352 days since the Dow Jones Industrials Average registered an all-time record high in May of 2015. Since the 1920s, when the Dow has surpassed 350 calendar days without recovering a bull market peak, the index has dropped at least…

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Why Should Stock Investors Pay 2016 Prices For 2012 Profits?

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

Since the S&P 500 logged an all-time record (2130.82) 11 months ago, there have been two violent price sell-offs of more than 10%. On both occasions, the popular index rallied back to recapture the 2100 mark. Yet the unknowable question still remains; that is, will the bull market demonstrate its durability by notching a new closing high, or did U.S. stocks hit a plateau in May of 2015? My contention is that U.S. stocks topped out last May. Primarily, the downward sloping…

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Lack of Earnings Quality and Debt Downgrades Limit S&P 500’s Upside

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

Four in a row. That’s how many consecutive 3-point baskets Andre Iguodala scored against the Houston Rockets in last night’s playoff game. There has also been a “4 for 4” in the financial markets. One after another, major banks have lowered their year-end targets for the S&P 500. Most recently, the global equity team at HSBC shaved its year-end target to 2,050 from 2,100. On the surface, HSBC’s cut is less severe than other bank revisions to S&P 500 estimates. That…

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Should Investors Take Notice When Reward Prospects Diminish?

By | Asia ETFs, Bond ETFs, Commodity ETFs, Consumer ETFs, Current Affairs and ETFs, Dividend ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, International ETFs, Large Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

The world’s central banks devise conventional and unconventional ways to depress interest rates. The impact? Consumers purchase goods and services on credit with favorable financing terms. Corporations issue low-yielding debt in order to buy back shares of their own stock. And governments issue low-yielding treasuries to continue spending far more than they generate in tax revenue. For some investors, then, the only thing that matters in the determination of whether to acquire assets like stock and real estate is ultra-low interest…

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No Bull. Economic Weakness Continues To Pressure Corporate Profitability

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

Is the U.S. economy really in great shape? The U.S. Federal Reserve does not seem to think so. They started the year with an intention of raising the overnight lending rate four times – from 0.25% to 1.25%. In March, they announced that it would more likely be a mere two. And today, the Atlanta Fed downgraded its Q1 estimate for gross domestic product (GDP) to a new low for the year (0.4%). Granted, GDP for the fourth quarter of…

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No Sales, No Profits, No Bull: What Happens When Valuations And Central Banks Collide

By | Asia ETFs, Bond ETFs, Commodity ETFs, Consumer ETFs, Currency ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, International ETFs, Large Cap ETFs, Latin America ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Total business sales – sales by wholesalers, manufacturers and retailers – have fallen 5% from their July 2014 peak of $1.365 trillion. At $1.296 trillion for January 2016, total business sales have dropped back to where they were in January of 2013 ($1.293 trillion). In fact, the erosion of total sales by American businesses are even uglier when one takes inflation into account. Over the last 20 years, whenever total business sales continued on an upward trajectory, the U.S. economy steered clear…

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Are Stocks Cheap Now? Get GAAP If You Want To Get Real

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

The times they are a changin’. In the ’80s as well as the ’90s, corporations reported quarterly results that corresponded to generally accepted accounting principles (GAAP). These days, the vast majority of companies report “pro-forma” earnings that adjust for unusual, special or one-time circumstances. Take a look at the dramatic rise in the percentage of companies serving up adjusted profits per share rather than GAAP-based results. In June of 2010, 70% provided adjusted earnings. However, as the pressure to engineer…

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5 Huge Misunderstandings About The Current Investing Environment

By | Biotechnology ETFs, Commodity ETFs, ETF Philosophy, ETF Strategy, Health ETFs, US Markets and ETFs | No Comments

Over the weekend, the Denver Broncos beat the New England Patriots in the AFC Championship. Popular football analysts had – across the board, it seemed – believed the Patriots were a “shoe-in.” They were wrong. Peyton Manning could still throw deep passes to score touchdowns. And Denver’s defense rattled Tom Brady on nearly every Patriot possession. In a similar vein, an overwhelming majority of analysts believed that the ending of QE3 in December of 2014 and the 0.25% rate hike in…

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ETF Relationships That May Tell You When The Worst Is Over

By | Bond ETFs, Commodity ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Natural Resources ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Businesses, consumers and the federal government have taken on enormous amounts of debt since the Great Recession. Optimists argue that total debt is irrelevant; that is, they believe the only thing that matters is the cost of servicing those debts. Fair enough. Then what happens when interest expense does rise? Assuming total debt remains the same, higher rates would increase the percentage of household income or the percentage of corporate/government revenue that must be allocated to debt servicing. In earlier…

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