Six months ago to the day, the Dow Industrials was sitting near multi-year highs. At the same time, one or more institutional investors piled into leveraged intermediate treasuries. The exchange-traded fund? ProShares Ultra 7-10 Year Treasury (UST). The commitment? $40 million on 25x normal trading volume. Back then, it seemed like a long shot to [...] Continue Reading...
On Tuesday, 5/1/2012, CNBC trumpeted the Dow’s highest close since December of 2007. On Wednesday, the media giant celebrated the price-weighted index’s ability to shrug off weaker-than-anticipated employment data in the United States. There are reasons to be pleased with the progress of U.S. stocks in 2012. My clients continue to benefit from exposure to risk assets like Vanguard High [...] Continue Reading...
We can all agree that the first 3 months were wonderful for risk takers. What’s more, we can all feel good that U.S. stocks ran at their fastest percentage clip since 1998. Of course, what happened in the summer of 1998 is pretty intriguing as well. The infamous hedge fund Long-Term Capital Management helped exacerbate the spread of an Asian currency [...] Continue Reading...
Let’s face it. Maybe you weren’t cut out for volatility. And the stock market isn’t about to let you garner remarkable rewards in 2012… at least not without monstrous price swings. Can you turn to U.S. treasuries next year? Even if record-low yields didn’t rise, your return may not even keep up with inflation. It doesn’t look [...] Continue Reading...
I want to believe that I am still a capable basketball player. I am 6′ 2″ with an ample frame. I’ve got a fair amount of skill with my left hand. And I genuinely enjoy the half-court offense. (Translation: I’m “bulky,” left-handed and I don’t particularly like to run.) The reality may be even more dismal. [...] Continue Reading...
Holy Macaroni! For those who limited themselves to lamenting the 1% Cinco De Mayo losses on the Dow, they missed a stunning beat-down in the commodities universe. It’s not that it was entirely unexpected. Some may have read my commentary one week ago to the day when I offered the following: “That said, traders should begin to consider a near-term possibility [...] Continue Reading...
Corporations continue to post phenomenal earnings. And yet, macro-economic reports continue to register weaker-than-expected numbers. It’s a battle for the soul of the investing public. Do you believe that strength at classic cyclical organizations (e.g., Intel, Alcoa, etc.) will lead to improvement in hiring, consumption and overall GDP? This would likely be bullish for stock assets. Or do you anticipate [...] Continue Reading...
Hedge funds aren’t done buying or selling. And they aren’t particularly interested in making huge bets in this environment… on the long or the short side. So what are hedge funds looking to do if they aren’t trying to make money? Right now, they are far more interested in keeping their powder puffs dry. And that means… they’re still [...] Continue Reading...
Perhaps the most common question that I receive from financial journalists at popular publications (e.g., Investor’s Business Daily, Smart Money, Business Week, etc.) regards ETF risk. For example, with U.S. stock assets eclipsing their January highs, and coming off a 9.2% correction, writers are asking, ”What do you see as the next big hurdle?” In truth, it would be [...] Continue Reading...
In January, ETF fund flows depicted a number of seemingly incongruous events. Investors liked foreign stocks, but hated U.S. stocks. They distanced themselves from the risks of the financial sector, while they embraced the risks of energy and natural resources industries. Meanwhile, foreign currencies became outcasts, yet most forms of U.S. bonds received billions of new assets. Perhaps [...] Continue Reading...
