Archive | Commodity ETFs

Real Risk Taking Will Not Return Until The Fed Flip-Flops

In a strong bull market, higher volatility stocks tend to outperform lower volatility stocks. The PowerShares S&P 500 High Beta (SPHB):iShares USA Minimum Volatility (USMV) price ratio demonstrates how the bull market in equities has been giving way since the highs in the Dow and the S&P 500 one year ago (May 2015). Similarly, in a [...] Continue Reading...


What Happens To ‘Hold-N-Hope’ Portfolios When An Economy Struggles To Expand?

Some analysts may dismiss 115 years of economic data. I do not. In particular, if one averages the results of four respected stock valuation methodologies, one finds that stocks are wildly expensive. Greater irrationality in stock price exuberance only existed during conditions prior to the Great Depression circa 1929 and the tech wreck of 2000. Consider the [...] Continue Reading...


Are You Considering “Sell In May, Go Away?”

One of the signs that a stock market may be transitioning from a bull to a bear? Participants dismiss exorbitant valuations, cast aside disturbing shifts in technical trends, disregard economic stagnation and scoff at historical comparisons. For instance, it has been 352 days since the Dow Jones Industrials Average registered an all-time record high in [...] Continue Reading...


Why Should Stock Investors Pay 2016 Prices For 2012 Profits?

Since the S&P 500 logged an all-time record (2130.82) 11 months ago, there have been two violent price sell-offs of more than 10%. On both occasions, the popular index rallied back to recapture the 2100 mark. Yet the unknowable question still remains; that is, will the bull market demonstrate its durability by notching a new [...] Continue Reading...


Lack of Earnings Quality and Debt Downgrades Limit S&P 500’s Upside

Four in a row. That’s how many consecutive 3-point baskets Andre Iguodala scored against the Houston Rockets in last night’s playoff game. There has also been a “4 for 4″ in the financial markets. One after another, major banks have lowered their year-end targets for the S&P 500. Most recently, the global equity team at HSBC [...] Continue Reading...


Should Investors Take Notice When Reward Prospects Diminish?

The world’s central banks devise conventional and unconventional ways to depress interest rates. The impact? Consumers purchase goods and services on credit with favorable financing terms. Corporations issue low-yielding debt in order to buy back shares of their own stock. And governments issue low-yielding treasuries to continue spending far more than they generate in tax [...] Continue Reading...


No Bull. Economic Weakness Continues To Pressure Corporate Profitability

Is the U.S. economy really in great shape? The U.S. Federal Reserve does not seem to think so. They started the year with an intention of raising the overnight lending rate four times – from 0.25% to 1.25%. In March, they announced that it would more likely be a mere two. And today, the Atlanta [...] Continue Reading...


No Sales, No Profits, No Bull: What Happens When Valuations And Central Banks Collide

Total business sales – sales by wholesalers, manufacturers and retailers – have fallen 5% from their July 2014 peak of $1.365 trillion. At $1.296 trillion for January 2016, total business sales have dropped back to where they were in January of 2013 ($1.293 trillion). In fact, the erosion of total sales by American businesses are even uglier [...] Continue Reading...


Are Stocks Cheap Now? Get GAAP If You Want To Get Real

The times they are a changin’. In the ’80s as well as the ’90s, corporations reported quarterly results that corresponded to generally accepted accounting principles (GAAP). These days, the vast majority of companies report “pro-forma” earnings that adjust for unusual, special or one-time circumstances. Take a look at the dramatic rise in the percentage of [...] Continue Reading...


5 Huge Misunderstandings About The Current Investing Environment

Over the weekend, the Denver Broncos beat the New England Patriots in the AFC Championship. Popular football analysts had – across the board, it seemed – believed the Patriots were a “shoe-in.” They were wrong. Peyton Manning could still throw deep passes to score touchdowns. And Denver’s defense rattled Tom Brady on nearly every Patriot possession. [...] Continue Reading...


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