Volatility ETNs can serve as tools to protect assets that you already have in your portfolio. For example, 80% of the time over the last year, the iPath S&P 500 VIX Mid-Term ETN (VXZ) moved in the opposite direction of the S&P 500 itself. It follows that an active investor could purchase exchange-traded note protection if he/she is concerned about [...] Continue Reading...
The mainstream financial media may have caught a break in 2011. Neither the S&P 500 nor the Dow fell more than 20% from respective highs, meaning that nobody ran with the “Bear Is Back” headline. It follows that the 3/9/2009 lows still represent the start of a bull market uptrend. Not surprisingly, many have chosen to wistfully recollect the [...] Continue Reading...
The S&P 500 SPDR Trust (SPY) began 2012 with a bang, collecting 1.6% in the initial session. Yet it was far from the most impressive showing on Tuesday, January 3. Consider the performance of some of the castaways from 2011. Market Vectors Nuclear Energy (NLR) rocketed 2.4%. PowerShares Global Water (PIO) swam upstream for a formidable 3.2%. And Market [...] Continue Reading...
The prospects for corporate earnings haven’t mattered much to the markets in 2011. Instead, European debt news drives stocks dramatically higher or lower. Last week, stock assets tanked on less-than-anticipated demand for Italian bonds. This week, stocks skyrocket on better-than-expected desire for Spanish bonds. Traders used to profit from this kind of volatility. They haven’t been doing [...] Continue Reading...
By several measures, investors are every bit as afraid today as they were in the first week of October, when U.S. stocks had reached 52-week lows. Yet the S&P 500 is 11.5% higher than it was on 10/3/11. How can we tell that investors are still petrified? They’re flocking back to the perceived safety of the U.S. dollar and piling back into [...] Continue Reading...
Many investors have used precious metals to hedge against weak monetary policies of central banks around the world. Other investors believe that you can’t go wrong with “black gold,” since the global demand for oil will eventually outstrip the available supply. On these simple assessments, those who chose the PowerShares DB Precious Metals Fund (DBP) have seen their selection rise 22% [...] Continue Reading...
I represent hundreds of families as the president of my Registered Investment Adviser, taught financial concepts to classrooms around the world, spent years as the CFP on a national talk radio show and receive countless e-mails from wisdom seekers. Yet I would not be able to tally the number of investors who I have encountered in my lifetime. However, there [...] Continue Reading...
I didn’t pursue a Master of Business Administration when I was younger; rather, I felt there would be more value in a Master of Science in Industrial/Organizational Psychology (a.k.a. “the psychology of business”). Why did I/O beckon more than the typical MBA track for financial professionals? In essence, the crash in October of 1987 had a profound affect [...] Continue Reading...
In my 10/27/11 commentary, “3 Reasons Stock ETF Investors Should Continue To Tread Lightly,” I pointed to the fact that the month-long stock surge had not come from the spectacular earnings season; in fact, the average return for individual securities on the session following a Q3 earnings report was -0.21%, suggesting that the entire October run-up emanated from enthusiasm for pan-European cooperation. It follows that articles [...] Continue Reading...
The troubles in Italy, Portugal and Greece are shockingly serious. How serious? Many insist that these 3 little piggies will eventually succumb to disorderly bankrupties, causing Armageddon for world stock markets and the global financial system. For the doomsday crowd to be right, however, everything has to go wrong. Ev-er-y-thing! For instance, coordinated Eurozone plans for aid to Greece would have [...] Continue Reading...
