Long-time readers and listeners know that I am an active manager of passive “Index ETFs.” I favor exchange-traded index vehicles because the diversification comes with low expenses, exceptional tax-efficiency and intra-day liquidity. The media have regularly inquired why I rarely endorse the use of “Active ETFs.” Â For one thing, these funds involve more frequent trading, creating [...] Continue Reading...
Right now, the good folks at Morningstar view Low Volatility ETFs as too expensive. The analysts at the investment evaluation giant believe that investors should focus on mega-cap brand name corporations instead — companies that may have more reasonable prices relative to earnings and/or fair value estimates. Mega-cap ETFs include assets like Guggenheim Russell Top 50 (XLG) [...] Continue Reading...
On Monday, April 29, the S&P 500 may close at an all-time record peak. Yet very few folks seem to be talking about “selling high, and buying low.” If anything, a number of respectable analysts cheerily predict that any efforts to sell into market strength in May will be met quickly with a steady demand [...] Continue Reading...
Treasury bonds are rocketing, commodities are reeling and the euro-zone’s economy is contracting. That is hardly the backdrop for continued equity price appreciation. Yet the U.S. stock market has had little resistance in capturing all-time records. Regardless of region, asset classes typically move in the same direction. It follows that one would not expect unabashed buying [...] Continue Reading...
I genuinely expected the primary media outlets to spin the 7.6% unemployment rate as cause for celebration. Instead, many finally chose to explain the reality behind employment in America; that is, the number of potential employees in the labor force is at 63.3% — the lowest percentage of workers in the workforce since 1979. Psychologically, it [...] 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...
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...
What exactly makes an exchange-traded fund in a given economic segment “cheap?” I am beginning to think that the concept is as arbitrary and as disobliging as the automatic spending cuts in Washington D.C. For example, Russ Koesterich is the Chief Investment Strategist for Blackrock. I genuinely enjoy reading his perspectives on “everything iShares.” Indeed, every [...] Continue Reading...
Prior to the 2007-2009 financial meltdown in the U.S., risk-takers thoroughly embraced the idea that emerging markets would regularly trounce the developed economies. At times, this simply meant that emerging market stocks would outperform on the upside. At other times, this referred to the ability of “emergers” to hold on to gains… even if U.S. [...] Continue Reading...
Over the last 3 months, U.S. small cap stocks as well as foreign and emerging market small caps logged spectacular profits. Moreover, they beat the pants off of larger-cap competition. Consider the recent highs in various price ratios. For instance, SPDR S&P Emerging Market Small Cap (EWX):iShares MSCI Emerging Markets (EEM) demonstrates increasing relative strength for [...] Continue Reading...
