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Currency ETFs

This Stock Market Bull Does Not Believe In ‘Peak Stimulus’

By | Biotechnology ETFs, Bond ETFs, China ETFs, Currency ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Global ETFs, International ETFs, Large Cap ETFs, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

When central banks create money to underwrite a worldwide credit boom, do people become prosperous? Or does the electronic money creation encourage excessive borrowing that steals from future well-being? Consider the $10.75-plus trillion that central banks created in response to the U.S. financial crisis of 2008 and the subsequent economic stagnation across the globe. Monetary policy authorities primarily acquired “IOU” assets (e.g., sovereign debt, corporate bonds, etc.) to depress interest rates. The ultra-low rates stimulated unbridled borrowing from the financial system by…

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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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Why Some Investors Are Selling the ‘Fiscal Stimulus’ News

By | Bond ETFs, Currency 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

I came across an interesting data set for stock market performance for incoming Presidents of the United States. In their initial month, the results might be described as underwhelming. Upon the November election of Trump, investor hope reigned supreme on everything from corporate tax reduction to Dodd-Frank regulatory restructuring to monumental spending on infrastructure enhancement. Six weeks later? Many may be troubled by the haziness surrounding the specifics. Take the “unaffordable” Affordable Care Act (ACA). A large percentage of citizens and…

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Strong Jobs Report? Depends Upon Whom You Ask

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

Bespoke Investment Group provides some of the best investment insight to individual and institutional investors alike. That said, their “tweet” this morning described Friday’s job report as a definitive sign of a tight labor market. The implication? Employment in America is firing on all cylinders. I beg to differ. Let’s begin with several key particulars. Media outlets reported that U-3 unemployment ticked higher from 4.6% to 4.7%. When the “headline” U-3 number goes down, most commentary focuses on a lower…

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Predictions: 3 Things That Will NOT Happen in 2017

By | Currency ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Popular Posts, US Markets and ETFs | No Comments

Media personalities love to play the prediction game, particularly in January. Where will the S&P 500 wind up at year’s end? What will happen to interest rates? And after Mariah Carey’s infamous New Year’s Eve non-performance, which celebrity will have the next public meltdown? I enjoy the prognostication pastime as much as any individual. It helps to clarify what matters to me as an investor (as well as what doesn’t). In particular, no matter what happens to the world at…

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Bought the Super-Charged Growth Rumor? Prepare to Sell the Mediocre Growth News

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

If I had to identify a half-dozen of my favorite movies, The Shawshank Redemption would definitely make the cut. It may even be on your Top Five list. Why am I bringing it up? In essence, the film produced one of the more inspirational quotes in motion picture history. The hero pens a letter to his incarcerated friend and he included, “Remember, Red, hope is a good thing, maybe the best of things. And no good thing ever dies.” Ironically, hope is not particularly…

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You’re Gonna Pay How Much? Valuation Extremes Are No Longer ‘Justified’ By Ultra-Low Rates

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

For several years, ultra-low interest rates “justified” paying higher stock prices for anemic earnings growth. The 10-year Treasury yield traded in a tight range between 2.0%-2.5%. Borrowing costs remained stable or continued to fall. Indeed, the notion that rates would remain extremely low for a very long time encouraged many to pony up for a price-to-earnings (P/E) multiple of 19. Throughout the first ten months of 2016, though, a sub-2% 10-year Treasury prompted investors to pay even higher equity valuations….

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‘Member 3.5% Mortgages? ‘Member Low Priced Stocks? I ‘Member!

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

Assume for the moment that the corporate profit recession is finally over. In addition, presuppose that the earnings per share (EPS) growth rate for S&P 500 companies will approximate its median rate (11%) over the coming year. Moreover, imagine that a Forward P/E of 17.0 represents “fair value” for stocks in an era of ultra-low interest rates. (Note: The 35-year average is approximately 13.0). Now let’s check data from from S&P Dow Jones Indices. The 12-month estimate of operating earnings for…

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No Soup For You! Companies Will Slow Down Their Dividend Payouts And Stock Buybacks

By | Bond ETFs, Currency ETFs, Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Popular Posts, US Markets and ETFs | No Comments

Public companies seldom distribute more to shareholders than what they earn in a given year. It is categorically uncommon for those corporations to pay out more in dividends and share buybacks than what they earn for two years in a row. Three years? That’s never happened. Take a look at the total payout ratio dating back to 1964. The ratio (dividends + buybacks/corporate earnings) surpassed 100% for two consecutive years as the U.S. dealt with the early ’90s economic downturn…

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What Is The Most Opportunistic Asset Class Right Now?

By | Bond ETFs, Currency ETFs, Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, ETF Strategy, Financial ETFs, Large Cap ETFs, Materials ETFs, Natural Resources ETFs, Real Estate ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Are the new all-time highs in U.S. large cap stocks as big a deal as the media would have you believe? On a year-over-year basis, other asset classes have been more impressive. Bonds via Vanguard Total Bond Market (BND), gold via SPDR Gold Trust (GLD) and the “risk-off” Japanese yen via Currency Shares Yen Trust (FXY) have all outperformed the S&P 500 SPDR Trust (SPY). Vanguard REIT ETF (VNQ) that captures a wide range of real estate investment trusts has…

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