Archive | Special Sectors ETFs

Quantitative Failure: Is The Faith In Central Bank Omnipotence Fading?

What do investors in “high quality” bonds worry about the most? The folks and Bank of America Merrill Lynch Global Research wanted to know. It turns out, investors are increasingly concerned about the bursting of a bubble in credit. It may not be surprising that nearly one-third of high-grade credit respondents are troubled by the [...] Continue Reading...


The Mad Scramble For Yield Ignores A Real Risk Of Financial Loss

Is debt inherently bad? Probably not. After all, most homeowners require a mortgage to afford the “American dream.” Indeed, most folks believe that financing real estate is a venerable wealth-building endeavor. They trust property appreciation more than they trust market-based securities like stocks. Bear in mind, low mortgage rates in the 5.5%-6.5% range coupled with [...] Continue Reading...


Buy Or Sell Tesla (TSLA)? Tell Me What The “Feds” Are Going To Do

A client recently asked me for an opinion on Tesla (TSLA). I snickered. Not because I had a negative outlook on the electric vehicle manufacturer. Nor did I laugh because I doubted Elon Musk’s ability to lead. Did I chuckle because auto demand might be peaking? No, that wasn’t it. Or because low gasoline prices [...] Continue Reading...


How Should You Address The Existing Risk Of Disastrous Loss In The Market?

The previous decade’s financial crisis did not begin in earnest until 2008. Bear Stearns. Lehman Brothers. AIG. And yet, the warning signs had appeared long beforehand. Real estate sales had turned negative on a year-over-year basis in 2006, even as prices kept climbing. Meanwhile, SPDR Select Sector Financials (XLF) logged -21% in 2007, even as [...] Continue Reading...


5 Inconvenient Stock Truths For The Bold And The Reckless

Here are five big-league reasons to evaluate your current asset mix: 1. Credit Fundamentals Are Deteriorating. What do you remember about the financial crisis in 2008? Perhaps you think about a term like “subprime mortgage.” Or maybe you recall the way home values and stock prices collapsed. Either way, most would agree that households and [...] Continue Reading...


What Is The Most Opportunistic Asset Class Right Now?

Are the new all-time highs in U.S. large cap stocks as big a deal as the media would have you believe? On a year-over-year basis, other asset classes have been more impressive. Bonds via Vanguard Total Bond Market (BND), gold via SPDR Gold Trust (GLD) and the “risk-off” Japanese yen via Currency Shares Yen Trust [...] Continue Reading...


Stocks and Bonds: Which Asset Class Balloon Will Pop First?

In 2013, the S&P 500 closed at a record high at the same time that the 10-year U.S. Treasury bond yield closed at a record low. The reason? The Federal Reserve had been buying hundreds of millions of government bonds as part of its quantitative easing (QE) program. Indeed, back in 2013, Fed leaders determined [...] Continue Reading...


Bonds Say To Stocks, “We’re Just Not That Into You.”

Five years ago, several European countries (e.g., Portugal, Italy, Greece, etc.) appeared as if they might default on their sovereign debt obligations. Gold prices spiked. The Japanese yen soared. U.S. Treasury bond yields plummeted. And the S&P 500 fell nearly 20% before globally coordinated central bank activity resuscitated investor appetite for U.S stocks. Today, Europe appears [...] Continue Reading...


Why You May Want To Sell Into The Post-Brexit Rally

For the better part of six years, between December of 2008 and December of 2014, the Federal Reserve created hundreds of billions of electronic dollar credits to pump up asset prices (e.g., stocks, bonds, real estate. etc.). Theoretically, the subsequent wealth effect would encourage businesses to invest in their growth, consumers to spend on discretionary items [...] Continue Reading...


Lower Rates For Longer: Will It Genuinely Benefit Stock Investors?

If the price that one pays for an asset is “fair” or “reasonable,” then one should not doubt having made the transaction. He/she might need to reevaluate whether the current price still reflects a reasonable value at a later date. After all, if a company’s share price has risen dramatically in relation to declining sales [...] Continue Reading...


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