How bad is the current correction? It depends upon the assets you currently hold.
Here are the top 8 ETF positions for moderate risk clients at my Registered Investment Adviser, Pacific Park Financial, Inc.:
Moderate Portfolio: Percentages Below Respective Highs
Approx %
Vanguard High Dividend Yield (VYM)
-4.0%
iShares High Yield Corporate Bond (HYG)
-2.5%
iShares S&P Growth Allocation (AOR)
-3.4%
Vanguard Total U.S. Stock Market (VTI)
-6.4%
iShares [...] Continue Reading...
Citigroup’s Tom Fitzpatrick asserted that the U.S. market is emulating the pattern of a 1970s-style bear. The company’s chief technical analyst suggested that stocks would likely fall 20% or more on economic factors like sky-rocketing oil, declining economic activity, rising unemployment and a collapse in housing.
There are quite a few problems with Mr. Fitzpatrick’s assertion. Unemployment is woefully high due to a [...] Continue Reading...
There are times when the U.S. dollar tells investors all they need to know… at least in the short term. For example, the fact that the PowerShares DB US$ Dollar Bullish Fund (UUP) gained ground for 9 consecutive days is an expression of serious doubt in Europe’s finances as well as its leadership. Indeed, the almighty buck [...] Continue Reading...
Foreign stocks returned to their winning ways in the first 10 weeks of 2012. By mid-March, however, economic data out of China started to demonstrate sluggishness. A rapid rise in Spanish bond yields began threatening the country’s ability to manage its own finances. And European interbank lending ground to a halt.
Nevertheless, as recently as Tuesday (May 1), many commentators [...] Continue Reading...
On Tuesday, 5/1/2012, CNBC trumpeted the Dow’s highest close since December of 2007. On Wednesday, the media giant celebrated the price-weighted index’s ability to shrug off weaker-than-anticipated employment data in the United States.
There are reasons to be pleased with the progress of U.S. stocks in 2012. My clients continue to benefit from exposure to risk assets like Vanguard High [...] Continue Reading...
The iShares 20+ U.S. Treasury Bond Fund (TLT) has often exhibited wider daily trading swings than the S&P 500 SPDR Trust (SPY). This quirk alone has made it difficult for me to embrace the long end of the treasury bond curve.
Instead, I’ve been more apt to stick with intermediate investment grade corporate credit, as well as short-term and long-term high [...] Continue Reading...
You don’t have to agree with every aspect of “Dow Theory” to appreciate one of its most venerable features. In particular, the Dow Jones Transportation Index should lead the way higher for the Dow Jones Industrial Average.
Why has this particular axiom maintained a level of popularity for more than a century? In essence, transporters “take” materials to [...] Continue Reading...
Last year, world equity markets obsessed over the movement of sovereign debt yields in Portugal and Greece. Here in 2012, Spanish and Italian bond yields have risen enough to scare investors back into the perceived safety of U.S. treasuries. In fact, iShares Barclays 7-10 Year Treasury Bond Fund (IEF) is near 52-week highs.
Unfortunately, concerns about the 3rd and 4th [...] Continue Reading...
The Dow and the S&P 500 may have experienced the worst 2-week losses since November. Still, is it really time to panic? When one considers the reality that the major averages are less than -4% from multi-year highs, abandoning stock assets seems a bit premature. That said, you may want to avoid certain investments.
For example, [...] Continue Reading...
Less than two weeks ago, a large number of media writers and analysts were expressing their exuberance for higher stock market highs. Most seemed to ignore the possibility that fewer and fewer corporations were participating in the S&P 500’s accomplishments.
Sell in May and go away? The smart money may have already rebalanced in March… and it’s not like [...] Continue Reading...
