On Wednesday, 5/8/2013, U.S. stocks recorded gains for a 5th consecutive session. In fact, the S&P 500 logged its 12th gain in 14 trading days, rising 6% since a mid-April hiccup and reaching yet another all-time peak. Equally intriguing, the last week has witnessed a renewed interest in foreign equities. In spite of a deepening recession [...] Continue Reading...
The relative strength of the primary U.S. benchmarks — the Dow Industrials and the S&P 500 — distorts the true picture for risk assets today. In fact, we do not even need to look closely to see the cracks all along the wall. For example, the most important metal to the world’s economy appears destined for [...] Continue Reading...
Many member countries of the euro-zone have had to agree to cut spending and increase taxes. Since there is no government stimulus to go around, unpopular austerity measures have placed a noticeable burden on businesses and consumers to grow respective economies. Unfortunately, consumers do not appear to be capable of ending the region’s recession. In the [...] Continue Reading...
Media outlets continue pressing the notion that new cash is entering the stock market from the sidelines. And for the most part, this may be an accurate depiction. Anecdotally, many of my risk-averse money management clients have asked me to move them up from “ultra-conservative” to “moderately conservative.” Similarly, a number of traditional “moderates” are asking [...] Continue Reading...
Few seem to care about the potential for monstrous declines when stock assets are within a few percentage points of all-time highs. In fact, it becomes increasingly difficult for an objective observer to see the investment environment as it is… rather than through magenta-colored glasses. At times like these, bears go into hibernation. Meanwhile, bulls present [...] Continue Reading...
Japanese stocks have been perennial underachievers. So when I suggested on December 20 that investors might benefit from WisdomTree Japan Hedged Equity (DXJ), I was asking certain readers to challenge conventional wisdom. (See “A Foreign Stock ETF For A Rapidly Declining Currency.”) My thought process on the matter was relatively straight-forward. The incoming prime minister of [...] Continue Reading...
Las Vegas odds-makers believe that the San Francisco 49ers will beat the Baltimore Ravens to win Superbowl XLVII this Sunday, February 3. That’s what is implied by a 4-point spread. In contrast, if the professionals did not feel that the 49ers had a definitive edge, there would neither be a spread nor a so-called “favorite.” And [...] Continue Reading...
ETF enthusiasts can make profitable investing decisions based upon government/central bank currency manipulation. For example, a little more than a month ago, I wrote “A Foreign Stock ETF for a Rapidly Declining Currency.” In the article, I discussed Shinzo Abe’s determination to devalue the yen substantially through aggressive monetary intervention so that Japan’s exports would be [...] Continue Reading...
Every year for the past 3 years, scores of pundits have predicted the demise of high yield bonds. Reasons have included record low yields for the asset class, an imminent rise in interest rates, questionable balance sheets, recession, inflation and overvaluation. In spite of gloomy forecasts, Morningstar revealed that high yield bonds have averaged 10.5% annually over the past 3 [...] Continue Reading...
In early September, the European Bank (ECB) put its money where Mario Draghi’s mouth was. Specifically, the congregation of decision makers agreed to purchase unlimited amounts of short-term, troubled country bonds in the event that a beleaguered sovereignty requested aid. (Note: A country would have to agree to certain reforms, but… who genuinely wants details?) Apparently, the ECB [...] Continue Reading...
