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Emerging Market ETFs

Higher Rates Will Hurt Stocks More Thank You Think (Part 2)

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

In my previous week’s commentary, I explained why higher interest rates will hurt stock assets more than many might think. Naysayers pointed to the fact that rate levels are still quite low on a historical basis. Unfortunately, these folks are neglecting to place their comprehension of borrowing costs in context. Take a look at the last 20 years of U.S. monetary policy via the Federal Funds Rate (FFR). The Federal Reserve’s tightening phase from the 4% level up to the…

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Higher Rates Will Hurt Stocks Far More Than You Think

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

Federal Reserve Chair Jerome Powell thinks the economy is awesome. And he has no problem telling us so. What Powell will never discuss, however, is the “way-too-low-for-way-too-long” stimulus that the central bank engaged in to get here. In particular, the Fed has kept the neutral rate of interest far beneath the rate of inflation (CPI) for an entire decade. Consumers, corporations and Uncle Sam predictably borrowed as if there’d never be consequences. What consequences? Asset bubbles. Stocks, bonds, real estate, collectibles,…

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Give The Fed Credit For The Boom (And The Inevitable Bust)

By | Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, International ETFs, Large Cap ETFs, Technology ETFs, US Markets and ETFs | No Comments

The broader U.S. market has finally recovered from its late January meltdown. Indeed, most sectors have gone on to reach all-time highs. On the flip side, a number of influential segments and sub-segments are still laboring. For instance, the Financial Select Sector SPDR (XLF) remains roughly 5% below its January peak. Theoretically, financial stocks should benefit from a rising interest rate environment. A healthy economy typically implies that borrowers have the capacity to repay. Moreover, with a strong economic backdrop,…

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Are Investors In U.S. Stocks Turning A Blind Eye To Contagion Risks Abroad?

By | Asia ETFs, China ETFs, Consumer ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, Frontier Market ETFs, Global ETFs, Popular Posts, Special Sectors ETFs, US Markets and ETFs | No Comments

Things look pretty darn good for the U.S. economy. Unemployment rates are low, inflation-adjusted borrowing costs are practically zero, and corporate profit margins sit at record highs. U.S. consumers have taken notice. The recently released Conference Board reading for consumer confidence reached 133.4. We have not seen a data point like that since the year 2000. Ironically enough, an exceptionally happy consumer is rarely beneficial for the investment markets. Take a look at the forward returns for the S&P 500…

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Non-Diversification: Free Stock Risk Without The Reward

By | Bond ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, Europe ETFs, Financial ETFs, International ETFs, Large Cap ETFs, Popular Posts, Small Cap ETFs, Technology ETFs, US Markets and ETFs | No Comments

Let me be quick to acknowledge that yield curve inversion can have considerable lag time before a recession. And for that matter, the U.S. Treasury bond curve can invert long before a stock market bear. For instance, 10-year yields fell below two-year yields in February of 2006. That was approximately 22 months before the recession officially hit in December of 2007. What’s more, between 2/2006-10/2007, the S&P 500 managed to climb more than 20%. There’s more. The 1990s Treasury bond…

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Is The World’s Largest Hedge Fund Wrong About Stock Assets?

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

Bridgewater Associates has roughly $160 billion under management, making it the largest hedge fund on the planet. Exchange traded funds like Vanguard FTSE Emerging Markets (VWO) the SPDR Gold Trust (GLD) and the S&P 500 SPDR Trust (SPY) head the list of top holdings. Last week, Bridgewater said, “We are bearish on financial assets as the U.S. economy progresses toward the late cycle, liquidity has been removed, and the markets are pricing in a continuation of recent conditions despite the…

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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 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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Do Stock Sellers Understand Something That Recent Buyers Do Not?

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

Is the stock market going up because there are more buyers than sellers? No. There are a fixed number of shares in the marketplace. For every buyer of a share, there needs to be a seller of the asset. In fact, a transaction cannot occur without each participant – each buyer and each seller – playing a role in a trade. So why is the U.S. stock market relentlessly powering ahead? Shareholding sellers are only willing to accommodate eager buyers…

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A Secular Bull Market For Stocks? Not Without An Intimidating Bearish Interlude

By | China ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, Large Cap ETFs, Latin America ETFs, Small Cap ETFs, Technology ETFs, US Markets and ETFs | No Comments

I could not be any prouder of my 20-year old daughter. In the recent semester, she received “straight 7s” while studying abroad at the University of Queensland in Australia. (Those are “As.”) More impressively, within a week of arriving back in the United States this past November, she secured two part-time lab assistant positions. That’s right. My kid works while pursuing her biology degree at the University of California in San Diego. Why am I writing about my daughter’s triumphs?…

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