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How Much Longer Should Stock Investors Dance Near The Fire Pit?

By | Bond ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Popular Posts, Special Sectors ETFs | No Comments

American consumers are financially strained. One indication? Card defaults rose from 2.81% back in November to 3.53% in May. Meanwhile, the expansion of credit by cards as well as by autos has slowed to the point of contraction. Some would have you believe that low headline unemployment (4.4%) is translating into increased consumption and increased demand for goods or services. Yet tepid GDP data demonstrate otherwise. One explanation is that nominal wage growth would need to grow in the 3.5%-4.0%…

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Are Stocks Adequately Compensating You For The Risk Of Financial Loss?

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

Few predict that a recession is imminent. On the flip side, how should one reconcile the fact that the treasury yield curve is flatter than it has been since 2007? A diminishing spread between 30s and 2s has a history of alerting market watchers to economic difficulties. At the start of the current recovery in June of 2009, the spread between the longest-term maturities and shorter-term maturities clocked in at a relatively robust 3.5%. The yield curve was noticeably steep. Eight years later? The…

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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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The Euphoria Debate: U.S. Stocks Versus U.S. Real Estate

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

When an asset class (e.g., stocks, bonds, commodities, real estate, collectibles, etc.) skyrockets in price – when it surges higher without sufficient economic reason – a bubble develops. Technology stocks in the late 1990s. Housing in the mid-2000s. When the asset class inevitably nose-dives? The balloon implodes. Speculative silliness has not been difficult for me to spot. As a national talk radio personality in the late 1990s, I warned stock investors not to get carried away by dot-com madness. A “New…

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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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Amazon (AMZN): Love the Company, Hate The Stock Price

By | Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Popular Posts, Special Sectors ETFs, US Markets and ETFs | One Comment

I recently ate dinner with a high-net-worth sales executive who asked me, “What are your thoughts on Amazon?” I told him the truth. Excellent company… unusually vulnerable stock. I explained my thesis on debt levels, excessive financial leverage, bubbly market euphoria, over-valuation as well as forced liquidation via margin calls. He seemed surprised that I might be concerned. He stated confidently, “Jeff Bezos is a one-of-a-kind innovator and Amazon is the future of retail. The stock should do very well…

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Bull? Bear? The U.S. Stock Market Is More Like The Honey Badger

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

Voters in the United Kingdom shockingly decided to leave the European Union? The stock market barely blinked. Voters in the United States unexpectedly elected a brash promoter over a well-established political insider? The stock market didn’t care. It told the media elite to take a hike, then promptly climbed to higher ground. The S&P 500 really doesn’t care what you think. It takes what it wants when it wants. The Federal Reserve continues to raise overnight lending rates? The yield…

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Did Stock Guru Jim Cramer Learn Anything From 2000 And 2008?

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

Borrowing money to get something that a person wants today can be financially rewarding. For example, mortgage debt helps a borrower acquire a home that is likely to appreciate in value over time. Not only does one enjoy the use of the property, one often increases his/her net worth through the use of leverage. A problem might develop, however, if an individual or family struggles to make the monthly payment. Job loss, sickness, ill-advised spending habits – a lendee might…

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Are Stock Investors Placing Too Much Faith In Tax Cuts?

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

There hasn’t been a major overhaul of the tax code in three decades. More notably, Reagan’s signature achievement required four years of deal making between the executive and legislative branches of government. Tax code reformation did not transpire overnight. Yet many investors seem to think consequential tax reduction for corporations as well as tax cuts for the middle class is a cinch. It won’t be. There are debt-weary Republicans who are not likely to rubber stamp a package if it…

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Rationalizing Stock Market Irrationality (Or, The Earth Might Be Flat)

By | Bond 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

The repeal-n-replace health care bill needs a “Yes” vote from the House of Representatives on Thursday, March 23rd. With it, the financial markets may move higher on the belief that Trump/Congress will be able to pass corporate-friendly legislation from tax overhaul to regulatory reform. Without it, risk assets may stumble on the fear that political leaders will be unable to provide ambitious stimulus measures down the road. The prospect of lower taxes has always been at the heart of the…

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