Archive | Large Cap ETFs

Are All ETF Correlations Barreling Towards 1.0?

Since the S&P 500 hit 2011 on September 18, it has forfeited 4.1%. That may not represent a significant decline. Yet, the year-to-date damage across an array of 18 popular asset classes is a bit more vexing. Depreciation Across 18 Unique Asset Classes % Off 2014 High 200 Day MA Vanguard Total International Bond (BNDX) 0.0% Above Vanguard [...] Continue Reading...


The Barbell Approach To ETF Portfolio Allocation Continues To Shine

I did not invent the barbell strategy. At the start of the year, I simply offered readers a glimpse into the way that I would be managing ETF assets in the late-stage bull market. First, let me take you back to January when I explained that long-term rates would fall, not rise. The contrarian call had [...] Continue Reading...


Is The S&P 500 Now Safer Than A Diversified Portfolio?

Both the media and a wide array of financial advisers preach owning a diversified portfolio. Below, I have created a hypothetical asset mix that a moderate growth investor might employ: 30% iShares S&P 500 (IVV) 25% Vanguard Total Bond (BND) 12.5% iShares MSCI EAFE (EFA) 7.5% SPDR S&P Mid-Cap 400 (MDY) 5% SPDR High Yield (JNK) 5% Vanguard Short-Term Bond (BSV) 5% [...] Continue Reading...


What The Daily 1% Price Swings Mean For ETF Investors

In the first half of the U.S. stock market bull (i.e., 2009-2011), 10%-19% corrections occurred annually. That has not been the case in the second half of the bull market. Instead, the frequency as well as the duration of setbacks lessened. There were several 7% sell-offs in 2012, a couple of 5% pullbacks in 2013 [...] Continue Reading...


When Canaries Stop Singing, Riskier ETFs Can Croak

In a recent article at WSJ.com, the author interviews Michael Hartnett, a primary investment guru at Merrill Lynch. The top strategist explains that commodities, emerging markets, high-yield bonds and small-cap U.S. stocks are the “four classic canaries” in the investment mines. Moreover, he warns, the archetypal canaries have stopped singing. Yet Hartnett simply views the absence [...] Continue Reading...


Preparing Your ETF Portfolio For Increased Volatility

HSBC’s most recent Purchasing Managers’ Index (PMI) for the Chinese economy rose to 50.5 from a final reading of 50.2 in August. The manufacturing sector may be expanding, but the growth is noticeably restrained. Meanwhile, German factories registered their slowest growth in 15 months and the French manufacturing segment continues to shrink. Equally disconcerting, the [...] Continue Reading...


Reduce Your Allocation To Small Cap U.S. Stock ETFs

The Wall Street media may celebrate the 35% intra-day jump in Alibaba shares. They may tout the record highs in the Dow and the S&P 500. However, they are missing the boat on both the economy as well as key stock market divergences. Let us start with the economic environment. The all-important Conference Board’s Leading Indicators [...] Continue Reading...


What the Federal Reserve’s Policy Guidance Means For ETF Investors

The market supposedly climbs a “Wall of Worry,” at least until those concerns overwhelm participants. Yet the only apprehension that might send stock investors for the exit doors today relates to the timing and the pace of central bank rate hikes. When it comes to a number of the traditional alarms – geopolitical struggles, global [...] Continue Reading...


How ETF Investors Can Prepare For A 10% Correction

What is the longest period of time that the S&P 500 has traded without a 10% correction? According to Bespoke Investment Group, the record is a blissful 1,127-day run from July 1984 to August 1987. The current rally? 1,069 days. The waters are so calm, in fact, that only 13.3% of respondents to the most [...] Continue Reading...


Record Setting Stock ETFs: It’s About The Stimulus, Not The Economy

At the beginning of the year, analysts and economists explained why interest rates would climb significantly. They anticipated a year-end 10-year yield of 3.4%, not 2.4%. Only a few bond fund managers, doom-n-gloomers and contrarians dared to suggest that rates would drop. (For more on the topic, review my January commentary, “Against The Herd: Lower Rates, [...] Continue Reading...


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