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...
Approximately one month ago, Standard & Poor’s placed 15 European nations on review for potential credit downgrades. In spite of the implications, Italian bonds began to climb and their yields began to fall, as many were hopeful that an upcoming summit between European Union leaders might put an end to the region’s spreading debt crisis. Indeed, on [...] 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...
Motivational speakers frequently explain that the Chinese word for “crisis,” or “wei-ji,” represents a combination of “danger” (wei-xian) and “opportunity” (ji-hui). That said, how much opportunity can be found in crisis after catastrophe after calamity? For instance, the PIGS (Portugal, Italy, Greece, Spain) have been responsible for staggering levels of market volatility for 24 months. Time and again, one or more [...] 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...
Most believe that an agreed-upon plan for the Eurozone will not go far enough to increase economic growth in the region. And nearly everyone expects Greece to “officially” default. What’s more, if tighten-the-belt austerity doesn’t sit well with disenchanted Greek workers, how will it sit in the stomachs of 2-hour, lunch-breaking Italian employees? “Oh Gary,” you say, shaking your head. “Pray tell, sir, your reason for raising [...] Continue Reading...
The motion picture, “Contagion,” tracks the movement of a lethal virus that kills millions in a matter of days. Will the worldwide community come up with a cure? Or will the pandemic spread, annihilating every creature in its path? I don’t know the answer… I haven’t seen the movie. In fact, I don’t even plan to see the film because I [...] Continue Reading...
How many articles are going to emphasize how bad the month of August treated investors? The fact that U.S. stocks in the S&P 500 shed -5.7% speaks for itself. On the other hand, the reality that August had been down as much -13.3% eight trading days earlier is far more telling. Ironically, you still read how the U.S. credit downgrade [...] Continue Reading...
It’s one thing to claim that the stock market is pricing in Armageddon… that emotionality is trumping rationality. It’s another thing to dismiss investor fears as silly or absurd. Along these lines, the researchers at Bespoke published a fascinating table of “technically oversold” ETFs. In Analystville, one may regard an ETF as oversold when its current price is more [...] Continue Reading...
U.S. bond yields keep moving lower. Gold prices keep moving higher. Even the 3-month LIBOR rate is climbing, now up to 0.30% from 0.25%. These aren’t signs that fear has abated. On the contrary! It seems that the euro-zone sovereign debt crisis is very much alive. And yet, the media are almost giddy. Not only are they highlighting the recovery of losses since [...] Continue Reading...
