Category

Currency ETFs

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…

Read More

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…

Read More

Stocks and Bonds: Which Asset Class Balloon Will Pop First?

By | Asia ETFs, Bond ETFs, Currency ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, Global ETFs, International ETFs, Large Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

In 2013, the S&P 500 closed at a record high at the same time that the 10-year U.S. Treasury bond yield closed at a record low. The reason? The Federal Reserve had been buying hundreds of millions of government bonds as part of its quantitative easing (QE) program. Indeed, back in 2013, Fed leaders determined that the country still required emergency-level economic stimulus. Here in 2016, the S&P 500 may close at a record high above 2130 at the same…

Read More

Bonds Say To Stocks, “We’re Just Not That Into You.”

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

Five years ago, several European countries (e.g., Portugal, Italy, Greece, etc.) appeared as if they might default on their sovereign debt obligations. Gold prices spiked. The Japanese yen soared. U.S. Treasury bond yields plummeted. And the S&P 500 fell nearly 20% before globally coordinated central bank activity resuscitated investor appetite for U.S stocks. Today, Europe appears to be on the verge of another euro-zone crisis. This time, the United Kingdom’s decision to leave the European Union has threatened to destabilize the…

Read More

Why You May Want To Sell Into The Post-Brexit Rally

By | Asia ETFs, Bond ETFs, Consumer ETFs, Currency ETFs, Current Affairs and ETFs, Dividend ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, Financial ETFs, Global ETFs, International ETFs, Large Cap ETFs, Mid Cap ETFs, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, Telecom ETFs, US Markets and ETFs, Utilities ETFs | No Comments

For the better part of six years, between December of 2008 and December of 2014, the Federal Reserve created hundreds of billions of electronic dollar credits to pump up asset prices (e.g., stocks, bonds, real estate. etc.). Theoretically, the subsequent wealth effect would encourage businesses to invest in their growth, consumers to spend on discretionary items and the overall economy to improve dramatically. Since the Fed terminated its stimulus program (“QE3”), however, riskier assets have struggled and “risk-off” assets have thrived….

Read More

Zero Rate Hikes In 2016? It Still Won’t Be Enough To Help The Economy Or Stocks

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

According to the Goldman Sachs Current Activity Indicator (CAI), economic well-being peaked in November of 2014. The erosion from 4.1% down to 1.3% over the last 18 months demonstrates just how vulnerable the U.S. economy currently is. Not surprisingly, economic weakness has taken its toll on stock assets. The S&P 500 has not gained meaningful ground since the Fed officially stopped its bond purchases on December 18, 2014. Smaller company stocks in the Russell 2000? A bit of depreciation over the…

Read More

Are You Willing To Be The ‘Greater Fool’ By Acquiring More Stocks Today?

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

It does not matter if stocks are insanely overvalued, as long as there’s a more foolish participant who is willing to pay a higher price. That’s the essence of the “greater fool theory.” And right now, there are more foolish buyers that want “in the game” than risk-reducing sellers who want to scale back. It does not even seem to matter that corporate profits have slumped roughly 18.5% from their peak on 9/30/2014. Certainly, earnings per share growth has not…

Read More

Real Risk Taking Will Not Return Until The Fed Flip-Flops

By | Asia ETFs, Bond ETFs, Commodity ETFs, Currency ETFs, Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, ETF Strategy, International ETFs, Large Cap ETFs, Small Cap ETFs, Special Sectors ETFs, US Markets and ETFs, Utilities ETFs | No Comments

In a strong bull market, higher volatility stocks tend to outperform lower volatility stocks. The PowerShares S&P 500 High Beta (SPHB):iShares USA Minimum Volatility (USMV) price ratio demonstrates how the bull market in equities has been giving way since the highs in the Dow and the S&P 500 one year ago (May 2015). Similarly, in a strong bull market, growth-oriented assets tend to outperform value-oriented holdings. Instead, the iShares Core Growth (IUSG):Vanguard Value (VTV) price ratio illustrates a shift in preference…

Read More

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…

Read More

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…

Read More