Not every exchange-traded investment is a sensible core holding. In fact, some may not even work particularly well as trading vehicles. In many instances, this is the way that I feel about volatility ETFs/ETNs. Volatility ETNs have been a nightmare for buy-n-holders. Many have seen their principal erode 30%, 40%, even 50%. And yet, the iPath S&P 500 VIX Short-Term Futures [...] Continue Reading...
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...
Until recently, investors showed little interest in hedging against a potential collapse in the S&P 500. Some might have even described the environment as complacent with the CBOE S&P 500 Volatility Index (VIX) spending most of the year in the “mid-teens.” Now the VIX is back above 20. At that level, options participants anticipate an “annualized” change of 20% over [...] Continue Reading...
I’ve never been shy about criticizing the momentum-based mutual fund ratings or fair value estimates at Morningstar. At this moment, however, it’s the cynic in me — not the critic — who is taking note of a “NEW” section at the information provider’s web site. Until recently, major tabs at the Morningstar home page included “Stocks,” “Funds” [...] Continue Reading...
Before the bell on Monday, 5/7/2012, Warren Buffett announced that he’d eagerly acquire shares in two major U.S. corporations. Yet tech standouts like Apple (AAPL) and Google (GOOG) aren’t on his “buy list.” Maybe they should be. According to Birinyi Associates, the current price-to-earnings ratio of the Dow Industrials is 14.5. For the NASDAQ 100? 11.8. Mr. Buffett [...] 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...
Doug Kass, prominent helmsman at Seabreeze Partners and frequent commentator at CNBC, embraces social media. In fact, Mr. Kass tweets roughly 8-10 times throughout the day. Yesterday (4/30), Mr. Kass tweeted that his largest investment was short bonds, and he listed Inverse Bond ETFs like ProShares UltraShort 20+ Treasury (TBT) and ProShares Short 20+ Treasury (TBF). This morning (5/1), [...] Continue Reading...
