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...
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...
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...
There are roughly 1400 exchange-traded vehicles on the U.S. exchanges. And yet, only a small fraction of them (about 5%) can lay claim to $1 billion in assets under management. These 70-75 influencers often explain the direction of stock, bond, currency and commodity markets. In fact, there have been times when a single asset defines the entire investing landscape. For example, PowerShares DB [...] 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...
Chartists often like to view sector performance relative to the S&P 500 via a price ratio. For instance, if you are interested in basic materials stock momentum, you might investigate XLB:SPY over a particular period of time. In comparing price ratios for each of the 9 largest sector ETFs on 3/20/2012, only two can be said to be gaining [...] Continue Reading...
It’s a funny thing managing money for families, small businesses and high net worth individuals. One minute, you can be helping them overcome the terror of a 5% portfolio pullback in a world that appears bent on self-destruction. (”OMG… Greece is going to default…war is going to erupt in the Middle East!”) The next minute, you [...] Continue Reading...
Renewed fears over Thursday’s deadline for Greece’s debt swap with private bondholders served as the excuse. The truth is… the price of the S&P 500 had lived more than one standard deviation above a 50-day moving average since the last trading day of 2011; stocks were nearly certain to pull back. And it’s not like warning lights [...] Continue Reading...
