The mainstream financial media may have caught a break in 2011. Neither the S&P 500 nor the Dow fell more than 20% from respective highs, meaning that nobody ran with the “Bear Is Back” headline. It follows that the 3/9/2009 lows still represent the start of a bull market uptrend. Not surprisingly, many have chosen to wistfully recollect the [...] Continue Reading...
Even an ardent trend-follower who diligently tracks the price of the S&P 500 must be frustrated. Granted, had he/she sold when the heralded benchmark fell below its 200-day moving average in August, he may have protected principal… temporarily. However, the strategy would have left one buying-n-selling for losses in October, November and December. Yikes! Fundamental valuation wonks have [...] Continue Reading...
By several measures, investors are every bit as afraid today as they were in the first week of October, when U.S. stocks had reached 52-week lows. Yet the S&P 500 is 11.5% higher than it was on 10/3/11. How can we tell that investors are still petrified? They’re flocking back to the perceived safety of the U.S. dollar and piling back into [...] Continue Reading...
I didn’t pursue a Master of Business Administration when I was younger; rather, I felt there would be more value in a Master of Science in Industrial/Organizational Psychology (a.k.a. “the psychology of business”). Why did I/O beckon more than the typical MBA track for financial professionals? In essence, the crash in October of 1987 had a profound affect [...] Continue Reading...
In my 10/27/11 commentary, “3 Reasons Stock ETF Investors Should Continue To Tread Lightly,” I pointed to the fact that the month-long stock surge had not come from the spectacular earnings season; in fact, the average return for individual securities on the session following a Q3 earnings report was -0.21%, suggesting that the entire October run-up emanated from enthusiasm for pan-European cooperation. It follows that articles [...] Continue Reading...
Foreign bonds have always been one of my favorite areas for genuine diversification. Historically speaking, foreign bonds do not correlate negatively or positively with stocks. Until recently, however, ETF investors had slim pickings. You had vehicles such as SPDR DB International Gov’t Inflation Protected (WIP) as well as SPDR Barclays International Treasury (BWX). Yet WIP and BWX experienced enormous difficulties during [...] Continue Reading...
Last October, enthusiasm for Brazil had reached epic proportions. And why not? Not only had the iShares MSCI Brazil Fund (EWZ) risen 175% off its November 2008 lows, but the country constitutes one of the essential building blocks in the BRIC (Brazil, Russia, China, India) fortress. Indeed, the country boasts the world’s 7th largest economy, a consumption-oriented middle [...] Continue Reading...
The motion picture, “Contagion,” tracks the movement of a lethal virus that kills millions in a matter of days. Will the worldwide community come up with a cure? Or will the pandemic spread, annihilating every creature in its path? I don’t know the answer… I haven’t seen the movie. In fact, I don’t even plan to see the film because I [...] Continue Reading...
The Federal Reserve’s Fed Funds Rate is a target interest rate at which banks may lend money to each other overnight. For years, the U.S. central bank has targeted the rate at a paltry 0.00%-0.25%. And based on Bernanke’s comments one week ago, expect the bulls-eye to remain at 0.00%-0.25% for several more years. Economists generally acknowledge that lowering rates for [...] Continue Reading...
How confident should you be about Democrats and Republicans reaching an accord on raising the debt ceiling? Confident enough. Don’t get me wrong. I always have my stop-limit orders protecting key ETF positions. It’s just that the bond market as well as the stock market both agree… a deal will get done. 10-year treasury yields are still offering a [...] Continue Reading...
