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...
In the first two months of the year, SPDR Dow Jones Industrials (DIA) garnered 6.5% and the underlying benchmark made a successful run at 13000. It was a phenomenally fast start that persuaded many investors with cash on the sidelines to reconsider. Perhaps surprisingly, foreign stock ETFs dramatically outperformed domestic counterparts in January and February. For example, Vanguard Emerging Markets (VWO) raked [...] Continue Reading...
It’s a funny thing managing money for families, small businesses and high net worth individuals. One minute, you can be helping them overcome the terror of a 5% portfolio pullback in a world that appears bent on self-destruction. (”OMG… Greece is going to default…war is going to erupt in the Middle East!”) The next minute, you [...] Continue Reading...
U.S. dollar strength has kept a number of commodities range-bound, including gold, silver, copper and agricultural grains. Yet industrial metals tied to economic expansion appear to be gaining strength on signs that China may loosen monetary and fiscal policy, while oil/gasoline continue to surge on Middle East uncertainty. In aggregate, commodity investing has been mildly beneficial in 2012. The iPath DJ UBS [...] Continue Reading...
Month-over-month, most sector investments have provided investors with ample capital appreciation. Country ETFs with ties to technology, energy and infrastructure have all performed admirably. Yet there are a variety of areas of weakness that cannot be disregarded as inconsequential. For instance, in my February commentary on underachievement in the transportation arena, I highlighted the concerns with the Dow Industrials Average [...] Continue Reading...
My wife texted me a few hours ago. She expressed enthusiasm for the fact that the Dow closed above 13000, exuberantly commenting that the stock market is so “high.” (Exclamation points and smiley faces.) I did not wish to throw hail stones on her proclamation (or maybe I did). Yet the Dow also “achieved” this milestone back in April of [...] Continue Reading...
Only Egypt and Greece spent more government money as a percentage of economic activity (GDP) than the United States in 2011. The U.S. national debt ($15,300,000,000,000) already exceeds the value of all final goods and services produced by Americans each year. And gasoline prices figure to make things even tougher, as the $15 spike in crude oil since [...] Continue Reading...
Stock assets are at a collective crossroads. The reasons to go higher? Federal Reserve determination to force investors as well as corporations out of cash with their zero-percent rates AND a 7%-plus earnings yield (E/P) for the S&P 500. According to Bloomberg, the spread between the earnings yield and the 2% offered by the 10-year Treasury bond is 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...
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...
