Category

Dividend ETFs

The Yield Curve and Stocks: Much Ado About Everything

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

There has been a great deal of chatter about the strength of the American job market. And with good reason. Most measures of employment health – U-2 unemployment rate, jobless claims, wage increases, year-over-year job growth, etc. – support the notion that U.S. workers are “winning.” On the other hand, very few folks have addressed the possibility that the data are more likely to weaken than strengthen. On the contrary. So much faith is being placed on tax cut stimulus…

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Can A Stock Bull Prevail Without the Financial Sector?

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

“The most important item over time in valuation is obviously interest rates,” Warren Buffett explained in 2017. Never mind that this appears to contradict his beliefs back in 2001. Sixteen years earlier, Mr. Buffett stated that stock market-capitalization-to-GDP was “the best single measure of where valuations stand at any given moment.” On this indicator, then, stocks have rarely been as over-priced as they are right now. It is certainly possible that the financial crisis of 2008 fundamentally altered the investment…

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The S&P 500 and Stephen Hawking: A Theory on “Peak Everything”

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

The NASDAQ served up an annualized return of 66% in its final two years of dot-com mania. Only after the balloon had burst did people begin to question the lunacy of paying 10x revenue for the privilege of being a shareholder. Ironically enough, since early 2016, the top 10 growth names in tech collectively produced an annualized return of 67%. That’s right. The NYSE FANG+ Index has topped turn-of-the-century craziness. For the current bull-bear cycle, then, we may be witnessing…

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Time in the Market, Not Timing the Market? Catchy Phrase Ignores Key Evidence

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

There is a reason why Warren Buffett regarded market-cap-to-GDP as “…the best single measure of where valuations stand at any given moment.” The reason? Its relationship with 10-year forward returns for stock prices. And right now, stock market capitalization as it relates to the U.S. economy is projecting negative returns for U.S. stock prices. It is also true that Mr. Buffett has, in recent years, distanced himself from the valuation approach called the “Buffett Indicator.” Is it because he stopped believing…

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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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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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Does The Stock Investor Feel Lucky? “Well, Do Ya, Punk?”

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

The broadest definition of a bear market? Stocks descend 20% (rounding up) on a closing-price basis without an intervening bull market (20%) rally. Since 1929, there have been 25 bears with an average top-to-bottom return of -35%. Some analysts prefer to exclude the Great Depression. (Should they?) Since World War II, the average bearish demise has been -30%. A quick perusal of the percentage losses reveals a curious truth. The last two bears? The “tech wreck” and the “financial collapse?”…

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Should Stock And Bond Investors Continue Their ‘Hop of Hope?’

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

Stock investors have made a “hop of hope” since the election of Donald J. Trump. Specifically, the new administration’s dedication to the repatriation of foreign profits, the lowering of corporate tax rates and the reduction of onerous regulations may create impressive wage growth as well as momentous economic growth. Keep in mind, year-over-year wage growth and annual GDP growth during the nearly eight years of recovery fell way short of pre-Great Recession growth rates. Wages have grown at a sub-par…

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