There are roughly 1400 exchange-traded vehicles on the U.S. exchanges. And yet, only a small fraction of them (about 5%) can lay claim to $1 billion in assets under management. These 70-75 influencers often explain the direction of stock, bond, currency and commodity markets. In fact, there have been times when a single asset defines the entire investing landscape. For example, PowerShares DB [...] Continue Reading...
In the last 8 weeks, bond traders have seemingly been willing to “fight the Fed.” The 10-year yield has crept up 50 basis since the start of February to 2.27%. What’s more, you don’t have to look very far to find an analyst willing to declare an end to the love affair that investors have had with U.S. government [...] Continue Reading...
It’s a funny thing managing money for families, small businesses and high net worth individuals. One minute, you can be helping them overcome the terror of a 5% portfolio pullback in a world that appears bent on self-destruction. (”OMG… Greece is going to default…war is going to erupt in the Middle East!”) The next minute, you [...] Continue Reading...
There are many times when it makes sense to choose an unconventional investing path. For example, last year, scores of prominent voices insisted that interest rates would rise. “Bond King” Bill Gross denounced U.S. government debt. Heck, S&P even downgraded it. And yet, investors who gobbled up U.S. Treasury bonds benefited from the “contrary-to-public-opinion” upside. The reasons for the unanticipated direction of yields are well-documented (e.g., expansion of the [...] Continue Reading...
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...
