Volatility ETNs can serve as tools to protect assets that you already have in your portfolio. For example, 80% of the time over the last year, the iPath S&P 500 VIX Mid-Term ETN (VXZ) moved in the opposite direction of the S&P 500 itself. It follows that an active investor could purchase exchange-traded note protection if he/she is concerned about [...] Continue Reading...
A variety of talking heads have explained the drop-off in performance for dividend-producing ETFs in terms of sector rotation. Specifically, low-risk superstars from 2011 like iShares High Dividend Equity (HDV) are losing out to higher-risk cyclical segments like SPDR Select Sector Technology (XLK) and SPDR Select Consumer Discretionary (XLY). Here’s the problem with this sort of simplistic assessment. Some economic bellwethers are [...] Continue Reading...
There’s been a great deal of discussion about the NASDAQ’s ability to log an 11-year high this past week. What hasn’t been mentioned, however, is that the tech-heavy composite remains 42.5% below its 12-year high. In fact, the composite would need to pole vault 74% from the current 11-year peak to recover the losses incurred from the bursting of [...] Continue Reading...
Investors are piling into stocks again. However, with 22.5% gains for the S&P 500 since the October lows, one may want to take a deep breath. Consider the fact that the Bureau of Labor Statistics (B.L.S.) lowered the national unemployment rate to 8.3%. If you believe the B.S. (I mean, B.L.S.) report, corporations may be back [...] 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...
Consider the reality that existed a mere 4 months ago. Stocks were at 52-week lows and, in many cases, 2 1/2 year lows. A short while later… a wide variety of the very same risk assets have jumped 20%-30%! Of course, healthy bull markets typically experience pullbacks. And while the methodology for determining when a pullback might arrive differs from [...] Continue Reading...
There’s a tendency for many writers, analysts and money managers to lump all industrializing nations into a single entity. For better or worse, the popularity of Vanguard Emerging Markets (VWO) and iShares MSCI Emerging Markets (EEM) illustrates the way the developed world chooses to invest money. (Heck, Jim Cramer recently described the investing environment in terms of a 4-legged [...] Continue Reading...
In January, the S&P 500 rocketed 4.4%… the largest monthly run-up for U.S. stocks since 1997. At the same time, 5-year U.S treasury bond yields hit record lows and the yields on 10-year treasuries remained below 2%. Is this normal? For riskier stocks and “risk-free” treasuries to gain ground in the same month? Not if you believe in historical [...] Continue Reading...
In 2011, the S&P 500 began the year with remarkable fanfare. The benchmark raked in 2.4% in January alone. And yet, in 2012, the S&P 500 has been even more impressive, snagging an eye-popping 4.4%. The reasons for the risk-on gains may be easy to identify, from the notion that U.S. economic prospects are improving to the feeling that Europe will contain [...] Continue Reading...
Less than 60% of all U.S. corporations have beaten analyst estimates for Q4 profits. Revenue numbers are equally questionable, as the “beat rate” is only 54%. Both readings are the weakest since the bull market in stocks began in March of 2009. Bespoke Research Group points out that forward guidance has been equally disconcerting. By analyzing the spread between the percentage of corporations raising guidance (expectations) [...] Continue Reading...
