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ETF Philosophy

Here’s What Will Cause The Next Recession

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

Financial professionals frequently opine that asset prices are a function of economic conditions. Assets like stocks, bonds and real estate rise in value when the economy is expanding. They fall in value when the economy contracts. The problem with those statements is that they represent a flawed understanding of 21st century credit cycles. In particular, recessionary pressures did not cause the tech wreck (2000-2002) nor the housing collapse (2008-2009); rather, the bursting of each asset bubble sparked the recession that followed….

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All-Time Stock Highs: Why Modest Risk-Renting Will Outshine Extreme Risk-Taking

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

There has been a great deal of media hype surrounding new all-time highs in the U.S. stock market. For that matter, there has been a fair amount of puffery when it comes to how well stocks are performing overall. In actuality, we have seen similar levels for the S&P 500 twice before. The S&P 500 traded around the 2925 level in September of 2018 and the 2875 level back in January of 2018. The last 16 months, then, have not…

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The Attractiveness Of A Defensive Stock Strategy

By | Consumer 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

In January of 2018, the U.S. economy surprised to the upside at nearly every turn. Since that time, however, the fundamentals have slowly deteriorated. Consider the Citi Economic Surprise Index (ESI). The popular measure compares actual data against estimates. Remarkably, the indicator has been trending downward for 15 months. Perhaps ironically, the S&P 500 now trades at higher levels than when the fundamental backdrop had been much stronger. For many stock investors, then, weak fundamentals are synonymous with the exciting…

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Why Do Bond Investors Doubt The Stock Market Recovery?

By | Bond ETFs, Consumer ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Financial ETFs, Global ETFs, Health ETFs, Popular Posts, Special Sectors ETFs, US Markets and ETFs, Utilities ETFs | No Comments

Is a recession in the U.S. around the bend? Few economists are predicting one. On the other hand, longer-term Treasury bond yields continue to slide below shorter-term maturities. Bond investors are gobbling up long-term government debt because they believe that the economy will slow dramatically. Normally, the longer an investor allows the U.S. government to keep capital, the more that an investor would expect in annual interest from Uncle Sam. That is what transpires in a healthy economy. This past…

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Fooling Investors For A Third Time

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

After being fooled by dot-com mania at the turn of the century, many stock investors vowed that they would not make the same mistake twice. So they turned to “can’t-lose” real estate. Of course, the housing bubble made fools out of many of the very same fortune-seekers. Today, circumstances are more precarious. It is not stocks or real estate. It is stocks AND real estate. In fact, it is stocks, bonds and real estate – the assets that constitute record household net worth. The…

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From 50 To Zero: Why Investors Are Shunning International Stocks

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

Leading into 2008, emerging market stocks and international stocks dominated financial shows. “Talking heads” agreed that investors should allocate as much as 50% overseas for a well-diversified portfolio. The reasoning? One should be aligned with the world’s stock market pie. After all, half of the world’s market capitalization belonged to U.S. stocks and half belonged to stocks from elsewhere around the globe. However, the real reason had little to do with market capitalization. In truth, foreign stocks were dramatically outperforming…

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The Silencing of the Bears

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

Since 2015, I have been less than enthusiastic about risk assets. And while I do not short the market, nor have I ever been completely divested from equities, investors have been rewarded for “going long.” Nevertheless, a review of the previous four years must note the 22 months of sideways stock movement that preceded the November 2016 election. The assessment must also account for the calendar year losses in 2018, especially for smaller-cap equities and foreign equities. The reason that…

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Vive La Résistance? Investor Sentiment May Tell The Tale For Stocks

By | Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Special Sectors ETFs, Technology ETFs, US Markets and ETFs, Utilities ETFs | No Comments

Have we already witnessed the bursting of a stock balloon? Or, in contrast, have we merely experienced a volatile corrective phase in the continuation of the longest bull market on record? According to research at GMO, the bubble has burst and there is more downside to come. The author of a recent GMO white paper, Martin Tarlie, establishes effervescent particulars in a historical context. Specifically, when valuations become temporarily explosive — 1929, the late 1990s, 2017-18 — they are “averting the mean.”…

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Gundlach Is Right About Junk Bonds And Stocks

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

Stock enthusiasts think the worst is behind us. Of course, they appear to be ignoring the fact that bear market rallies are quite common, and that the current upswing may just fit the bill. The average bear rally in history is approximately 11%. We stand at roughly 11.5% off of the correction lows right now. What’s more, there’s a fair amount of technical resistance in and around the S&P 500 range between 2625 and 2650. Credit key players in the…

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Let’s Not Kid Ourselves… The Market Will Remain Under Pressure

By | China ETFs, Consumer ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Special Sectors ETFs, US Markets and ETFs | No Comments

High profile market watchers have pointed out that there have only been four times in the last nine decades when back-to-back calendar year stock declines occurred. The years? 1929-1932, 1939-1941, 1973-1974, and 2000-2002. This could be encouraging news for stock enthusiasts were it not for the fact that 1929-1932 and 2000-2002 are included in the list. Valuation levels today have some of the same features that they did leading into the Great Depression and heading into the turn-of-the-century tech bubble….

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