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...
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...
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 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...
Copper is one of the world’s most popular metals. It is used in everything from water pipes to radiators to air conditioning systems. Some will say that the industrial metal posesses a Ph.D. in economics… it is that critical to world GDP growth. One country alone is responsible for about 40% of the world’s copper reserves and roughly 35% of copper [...] Continue Reading...
In 2011, U.S. financial stocks collectively posted the worst performance of the 10 major economic segments. Not only did the SPDR Select Sector Financial Fund (XLF) decline 17%, but the P/E ratio for the sector contracted 22%. In 2012, the skies have been a little brighter for banks, insurers and property developers. The S&P 500 SPDR Trust (SPY) has [...] Continue Reading...
Morningstar used to be a one-trick pony. The company rated mutual funds… and they weren’t particularly good at it. For instance, in 1999, nearly every investment in the Janus stable held 4 or 5 stars. The primary reason? Janus products demonstrated superior performance on a relative basis in most stock categories over popular time frames (e.g., 1 year, 3 year, etc.). Did [...] Continue Reading...
With the S&P 500 garnering 4.6% in less than 3 weeks, are money managers becoming skittish? If hundreds of millions flowing out of a few select ETFs is any indication, then the answer is, “Yes.” On 1/19/2012, institutional advisers used their block accounts to dump roughly $120 million of iShares Russell Top 200 Growth (IWY) and $80 million of [...] Continue Reading...
In 2011, S&P 500 profits expanded 15%. And yet, the benchmark’s price finished in the very same place that it started the year. In essence, since prices flat-lined and earnings experienced double-digit growth, a fundamentally inexpensive stock market via the price-to-earnings ratio (P/E) became even cheaper. The most common reason cited for P/E contraction in 2011? The Euro Zone debt crisis. Obviously, sovereign [...] Continue Reading...
LIBOR (London Inter-Bank Offered Rate) is the interest rate that fellow European banks will charge other banks. Put another way, it is the rate at which a financial institution in the region can borrow money. In order for banks to operate, they are consistently lending out and/or borrowing. If they cannot exchange with one another, required reserve levels could be deemed “inadequate” or investors could [...] Continue Reading...
