Imagine for a moment that you are not familiar with ticker symbols. Now, let me name seven contenders for your investment dollars — assets that simultaneously diversify your portfolio as well as increase your risk-adjusted performance.
Ticker Symbols (Imagine That You Are Unfamiliar With Them)
Approx YTD %
SPDR S&P 500 (SPY)
Cut to the chase, right? [...] Continue Reading...
Many of the word’s most respected economists projected the direction of interest rates at the start of the year. The average assessment? Experts collectively anticipated that the 10-year Treasury bond yield would rise from 3.03% to 3.41% by the end of 2014.
I didn’t see it.
For one thing, the well-being of real estate in a below-trend [...] Continue Reading...
In the history of the NBA Finals, no team had ever come back from a 3-1 deficit. Miami Heat believers explained that records were meant to be broken. And Lebron James asked, “Why not us?”
To the dismay of some basketball fanatics, the San Antonio Spurs mercifully disposed of their inferior competition in the fifth game. [...] Continue Reading...
One of the key themes that I presented at the start of 2014 was the notion that capital would begin shifting abroad. Attractive valuations compared to U.S. equities, ongoing stimulative measures in Europe as well as “carry trade” funding of higher-yielding assets contributed to several high conviction purchases.
Chief among them? iShares MSCI New Zealand (ENZL). [...] Continue Reading...
The Internet buzzes with predictions for the next bear market. Some use fundamental analysis to make their case. For instance, Shiller’s cyclically-adjusted price-to-earnings ratio for U.S. equities (PE 10) employs 10 years of trailing corporate profits. It currently stands at 25.6, while the historical average is roughly 16.5. This suggests that if U.S. large-cap stocks [...] Continue Reading...
Home Depot, Target, Dick’s Sporting Goods, Staples, PetSmart, Sears, Lowe’s, Walmart. What do all of these companies have in common? They sell products to the middle class. Lately, however, these retailers have not been selling a whole of their wares to middle class consumers. ¬†Not only did they reveal disappointing top-line revenue numbers in the [...] Continue Reading...
Last week, at the same time that the Dow had been hitting an all-time high, the Russell 2000 had been crossing below its long-term 200-day trendline. This particular divergence between U.S. large-cap stocks and U.S. small-cap stocks has only occurred on two other occasions over the past four-and-a-half decades — in early 2000 and in [...] Continue Reading...
Back on April 9, I talked about a “Great Rotation” away from momentum plays (e.g., biotech, Internet, small-cap growth, etc.). Where did the smart money go? Demand had been picking up for the least popular asset classes from 2013, including long-dated treasuries, select emerging markets as well as commodities.
Five trading weeks have passed since I [...] Continue Reading...
Chief market technician at MKM Partners, Jonathan Krinsky, is the latest commentator to add perspective on the trouble with U.S. small-cap stocks. He noted that roughly 80% of large-cap S&P 500 components are currently trading above their long-term trendlines (200-day), while only 40% of small-cap Russell 2000 components are above their 200-day moving averages. According [...] Continue Reading...
U.S. corporate earnings growth has slowed. Heck, if you are looking at companies in the Dow Industrials, earnings have actually declined for three of the last four quarters. Yet record highs for broader U.S. stock benchmarks continue stealing the headlines.
Are U.S. corporations genuinely thriving? In the aggregate, one can say that they’ve increased profitability through [...] Continue Reading...