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...
On a quarterly basis, 61% of companies tend to beat top-line revenue numbers. However, corporations are only beating expectations by a paltry 39% for Q1. The revenue shortfall is not hard to explain. Multinational corporations are struggling to generate sales due to a slowdown in global growth, particularly in Europe and China. The modest achievement in [...] 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...
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...
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...
Ten short weeks ago, financial journalists celebrated a growth stock renaissance in 2012, applauding the super-sized gains for growth funds and downplaying the performance of value-oriented counterparts. Year-to-date (through 10/1), large-company growth mutual funds had amassed 17.1% whereas large-cap value mutual funds had picked up 14.3%. John Wagoner of USA Today explained that the lag had to [...] Continue Reading...
According to Paul La Monica at CNN Money, the level of insider selling is near the highest that it has been in a decade. Specifically, close to 1800 S&P 500 executives cashed in shares over the most recent 3-month period. Does this mean that the “smart money” is leaving equities? Or do perma-bears love to point [...] Continue Reading...
There are a variety of ways to interpret stock market volatility. A rising CBOE Volatility Index (VIX) often typifies greater fear on the part of “options” investors such that they require protection against a monstrous sell-off. A widening of the daily trading range on a popular benchmark may also be indicative of explosive moves to the downside or upside. Moreover, upward revisions to the [...] Continue Reading...
In the 2/10/2012 edition of USA Today, journalist Janice Lloyd presented a number of sobering stats for baby boomers. For example, the demand for knee replacements in the 45-64 age bracket has tripled over the past 10 years. What’s more, nearly 1/5 of the 4.5 million Americans who have already experienced total knee replacements may eventually require revisions due [...] Continue Reading...
How do “value” gurus determine worth? Bill Miller spent 30 years at the helm of Legg Mason Value (LMVTX), buying companies that he believed were deeply discounted. This often meant that he would purchase shares of a company where the market had priced the shares less than what was on the accounting books; sometimes, he might acquire shares for less [...] Continue Reading...
