Extraordinary rallies off bear market bottoms are typical. Bullish run-ups in March of 2003 as well as March of 2009 registered enviable unrealized gains of 35% and 65% respectively; each advance experienced little resistance for roughly 9-10 months. Powerful moves off minor corrections are less typical, if not downright suspicious. Investors in the S&P 500 SPDR [...] Continue Reading...
One of the most prominent names in perma-bear predicting, Nouriel Roubini, just advised that you buy stocks for a period of about 2 years. At that time, the professor expects a global economic depression to rock the world markets. There’s a great deal of irony in hearing “Dr. Doom” discuss riding a stock wave higher through [...] Continue Reading...
Half of the largest U.S. corporations are missing revenue targets this earnings season. Non-cyclical sectors from health care to consumer staples are beating the pants of economic growth standouts like technology and energy. Trading volume is noticeably larger on down days than on up days. Treasury bonds are notching new 2013 peaks on safe-haven purchasing. [...] Continue Reading...
There are moments in time when I get tired of hammering on a theme. For example, on April 1, I penned the article, Selecting Safer Growth and Income ETFs for the 2nd Quarter Pullback. The commentary made the simple case for shifting to sectors that do not exhibit a great deal of economic cyclicality. After [...] Continue Reading...
When you think about it, ultra-low interest rates can be credited with a wide variety of recent occurrences. Real estate became more accessible. Vehicles became more affordable. And higher-yielding stocks and bonds became unavoidable for those who required a return on their life’s savings; that is, CDs and treasuries were not able to provide retirees [...] Continue Reading...
For the first time in 2013, investors do not appear to be tripping over themselves to buy every fractional percentage dip. Here on 4/15, the media have blamed the accelerated selling on commodity price depreciation and a disappointing GDP reading (7.7%) out of China. So we’re supposed to believe that a manic Monday where the domestic [...] Continue Reading...
Over the course of the 4-year bull market, I’ve kept an eye on the percentage of S&P 100 stocks that reside above a long-term 200-day trendline. Market pressures always seemed to develop when the level approached 86%-90%. Similarly, when the 50-day moving average for the S&P 100 reached 85%, you could pretty much count on [...] Continue Reading...
People are feeling better about spending money. Similarly, investors are feeling better about risking it. The problem is, whenever people begin to feel wealthy due to a faulty premise (i.e., the U.S. Federal Reserve can keep buying bonds to depress interest rates without longer-term implications), they may spend more than they have. Others may blindly [...] Continue Reading...
Non-cyclical stock sectors (e.g., consumer staples, health care, utilities, etc.) often do well when there are concerns about economic growth. Indeed, exchange-traded funds representing one or more components of the non-cyclical arena have been the key drivers in the broader U.S. market’s run toward all-time records. Nevertheless, it is still a bit surprising that the potential [...] Continue Reading...
In previous years, consumers spent more money when the value of their 401ks and the value of their homes were rising. That goes a long way toward explaining the performance of the third best sub-sector ETF on a rolling 5-year basis. Specifically, SPDR S&P Retail (XRT) annualized at 16.1% over the past 5 years while [...] Continue Reading...
