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Utilities ETFs

Here’s What Will Cause The Next Recession (Part 2)

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

Each of the last three recessions contained elements of extraordinary financial instability. For example, Savings & Loan (S&L) institutions used federally insured deposits to make reckless real estate loans in the 1980s. When the Federal Reserve raised its overnight lending rate more than 300 basis points between March 1988 and March 1989, a real estate bubble burst, hundreds upon hundreds of S&L’s fell apart, and the 1990-1991 recession damaged livelihoods. Not surprisingly, one finds comparable patterns of financial senselessness in…

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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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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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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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Why Are Investors Considering Alternatives To Stocks?

By | Commodity ETFs, Consumer ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Natural Resources ETFs, Special Sectors ETFs, Telecom ETFs, US Markets and ETFs, Utilities ETFs | No Comments

Mortgage interest payments as well as non—mortgage interest payments are costing consumers more and more of their disposable income. Consider the non-mortgage variety. Personal interest payments have already recovered levels not seen since the financial crisis. To be sure, interest payments are not the only thing taking a bite out of the cost of living. Oil prices have moved meaningfully higher. According to a 2005 study by the Federal Reserve, oil price increases adversely affect aggregate consumer spending. Is it…

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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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Everything Is Wonderful… Ex-Energy, Ex-Retail And Ex-Banks

By | Biotechnology ETFs, Consumer ETFs, Energy ETFs, ETF Philosophy, ETF Strategy, Health ETFs, Materials ETFs, Popular Posts, Technology ETFs, US Markets and ETFs, Utilities ETFs | No Comments

As long as central banks around the globe are creating monetary credits at a breakneck clip of $200 billion per month, assets from stocks to real estate to higher yielding securities may have a floor underneath them. In particular, saber rattling in North Korea, government shutdown threats, natural disasters from Harvey to Irma, slower job growth and/or the demise of big name retailers may not cause long-lasting stock declines. And therein lies a problem: extreme complacency. The masses are beginning…

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Why You May Want To Sell Into The Post-Brexit Rally

By | Asia ETFs, Bond ETFs, Consumer ETFs, Currency ETFs, Current Affairs and ETFs, Dividend ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, Financial ETFs, Global ETFs, International ETFs, Large Cap ETFs, Mid Cap ETFs, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, Telecom ETFs, US Markets and ETFs, Utilities ETFs | No Comments

For the better part of six years, between December of 2008 and December of 2014, the Federal Reserve created hundreds of billions of electronic dollar credits to pump up asset prices (e.g., stocks, bonds, real estate. etc.). Theoretically, the subsequent wealth effect would encourage businesses to invest in their growth, consumers to spend on discretionary items and the overall economy to improve dramatically. Since the Fed terminated its stimulus program (“QE3”), however, riskier assets have struggled and “risk-off” assets have thrived….

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Are You Willing To Be The ‘Greater Fool’ By Acquiring More Stocks Today?

By | Bond ETFs, Commodity ETFs, Currency 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

It does not matter if stocks are insanely overvalued, as long as there’s a more foolish participant who is willing to pay a higher price. That’s the essence of the “greater fool theory.” And right now, there are more foolish buyers that want “in the game” than risk-reducing sellers who want to scale back. It does not even seem to matter that corporate profits have slumped roughly 18.5% from their peak on 9/30/2014. Certainly, earnings per share growth has not…

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