Category

Technology ETFs

Stocks, Bonds And Real Estate: The High Probability Of A Wealth Effect Reversal

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

According to Michael Leibowitz of 720 Global, the cumulative amount of new debt issued by the U.S government surpassed the cumulative amount of U.S. gross domestic product (GDP) growth in each year since the financial crisis of 2008. In other words, GDP economic growth would have been negative in every year following the crisis were it not for massive federal deficits. Unfortunately, it’s not just the past that we are talking about. The International Monetary Fund projects that the U.S….

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Comeuppance: Stocks Will Not Be Able To Shake The Overhang Of Higher Borrowing Costs

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

The average American household has roughly 6% less spending power than it did a decade ago. How can that be? Hasn’t the economy been expanding at an appropriate clip since the Great Recession? Haven’t median incomes been rising briskly in conjunction with “full employment?” One of the problems may be attributable to demographic shifts. A rising percentage of young adults are living with their parents longer. Meanwhile, a significant wave of older folks are moving in with their adult children….

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Why Aren’t Stocks Climbing The Wall of Worry Anymore?

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

According to Bank of America’s research team, 87% of prior bull-to-bear transitions involved increases in volatility. That’s not particularly surprising. Anyone who has experienced a stock bear probably remembers months and months of extraordinary price swings. In the current bull portion of the bull-bear cycle (3/09-?), each of the previous corrections offered buying opportunities. For example, there were two 10%-plus volatile price pullbacks during the earnings recession (2015-2016). Earnings per share across the S&P 500 kept shrinking, yet buying the…

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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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Are American Stocks Great Again?

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

The U.S Department of the Treasury currently forecasts that the national debt will reach the $25 trillion mark by the 3rd quarter of 2020. That’s just two and a half years from now. What is $25 trillion among American friends? If you combine the debts of every other sovereign state on the planet, you still do not reach $25 trillion. Our nation is a serial debtor. It is easier to dismiss the enormity of the obligation when government is capable of…

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Shock the “Short S&P 500 Volatility” Monkey

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

A top-tier financial web site interviews me at the start of every year. The interviewer typically asks me about specific securities, asset allocation, economic backdrop as well as the impact of events (e.g., central bank monetary policy, mid-term elections, tax reform, etc.) This year, at the tail end of the interview, I fielded an atypical query. He wanted to know what “market surprise” might occur in 2018 (good or bad) that the financial media are not talking about. I thought…

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State of the Stock Market (#SOTSM)

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

The U.S. stock market has rarely notched 150 trading days without back-to-back 0.5%-plus declines. It happened on one occasion prior to the financial crisis in 2007. It also occurred once in the mid-1990s and twice in the 1960s. More recently, the S&P 500 logged an additional streak for consecutive trading sessions. This time, however, 150 days did not serve as the high-water mark. Nor was it 200 or 250 days. The new record streak that culminated on January 30, 2018? Try…

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Nothing To Fear In The Stock Market But The Fear Of Missing Out Itself

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

I have quite a few clients in their eighties and a number in their late eighties. That is not particularly surprising when your client base is chock-full of retirees and near retirees. What did surprise me a bit is a call from an 87-year old client yesterday afternoon. She called to inquire why her friends are making more money in the stock market than she has been making recently. “Are most of your friends in their 40s or 50s?” I…

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Regression to the Trend: Will S&P 500 Prices Ever Revisit Their Mean?

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

Richard Russell, an exceptionally well-regarded Dow Theorist, explained that a stock market can do absolutely anything over short periods of time. Yet, over longer periods, the greatest certainty is “regression to the mean.” “Regression to the mean” refers to the inevitability of prices revisiting a long-term trend. For example, near the beginning of the Roaring ’20s, stock prices sat nearly 60% below their long-term historical trend. As the Roaring ’20s rolled along, demand for equities outstripped supply to such an extent,…

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Speculative Frenzy Smells More And More Like 2000

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

Scores of extremely bullish investors insist that the financial markets today do not resemble the technology stock craze near the tail end of the late 1990s. That position is getting more difficult to defend. For example, market capitalization to GDP is a long-term stock valuation indicator with a high correlation (0.89) to subsequent 10-year returns. The valuation tool is frequently referred to as the “Warren Buffett Indicator.” The reason? In 2001, the Oracle of Omaha dubbed it as “…the best single measure of…

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