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...
The S&P 500 SPDR Trust (SPY) began 2012 with a bang, collecting 1.6% in the initial session. Yet it was far from the most impressive showing on Tuesday, January 3. Consider the performance of some of the castaways from 2011. Market Vectors Nuclear Energy (NLR) rocketed 2.4%. PowerShares Global Water (PIO) swam upstream for a formidable 3.2%. And Market [...] Continue Reading...
Even an ardent trend-follower who diligently tracks the price of the S&P 500 must be frustrated. Granted, had he/she sold when the heralded benchmark fell below its 200-day moving average in August, he may have protected principal… temporarily. However, the strategy would have left one buying-n-selling for losses in October, November and December. Yikes! Fundamental valuation wonks have [...] Continue Reading...
Economically sensitive sectors like energy failed to generate investor enthusiasm in 2011. Fears of a mammoth depression in Europe as well as a slowdown in China hampered share prices of mainstays from Anadarko Petroleum (APC) to Southwestern Energy (SWN). Looking forward, however, there may be reasons to cheer. China has shifted from restrictive fiscal and monetary policies to more [...] Continue Reading...
By several measures, investors are every bit as afraid today as they were in the first week of October, when U.S. stocks had reached 52-week lows. Yet the S&P 500 is 11.5% higher than it was on 10/3/11. How can we tell that investors are still petrified? They’re flocking back to the perceived safety of the U.S. dollar and piling back into [...] 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...
The weight of the health care sector in a given ETF can vary dramatically. In the S&P 500 SPDR Trust (SPY), health care accounts for about 12%. In contrast, First Trust Dividend (FDL) commits roughly 30% to the segment. Naturally, there are specific sector and sub-sector funds that provide 100% exposure. There’s 100% health care for the broader S&P 500 SPDR Select Health [...] Continue Reading...
Are you wondering if the market can go significantly higher by year end? Maybe your question should take the U.S. market’s remarkable resilience into account. Specifically, the S&P 500 has not closed in bear market territory. In fact, the large-cap barometer would have to close below 1096 to get there. Yet, with the exception of a few scary moments, the gauge has demonstrated its [...] Continue Reading...
In the 5-year bull market from 10/2002 through 9/2007, large-cap indexes typically carried price-to-earnings (P/E) ratios ranging from 17-18. Perma-bears harped on these “valuations” throughout the period, expressing that major benchmarks had not reverted back to a historical average of 15. With the real estate lending bubble bursting in dramatic fashion, stock assets plummeted 40%. Separately, the P/E price tag for the S&P [...] Continue Reading...
In spite of significant corrective activity in U.S. stock assets… in spite of bears clawing away at a number of foreign stock assets… the most popular company on the planet remains unharmed. In fact, shares of Apple hit a new all-time high on September 20, 2011. Everyone is “gaga” for Apple stock. That includes you, me… even the guy who takes [...] Continue Reading...
