Archive | Special Sectors ETFs

Sidestepping The S&P 500 ETF Trap

Upon his passing, Warren Buffett would like a trustee to place 10% of his wife’s money in short-term government bonds and 90% in a low-cost S&P 500 index fund. Buy-n-holders see this as vindication for the idea that lazy asset management is superior to every other approach. After all, who in the world can claim [...] Continue Reading...


Three ETF Investments For Persistent Euro Weakness

One of the key themes that I presented at the start of 2014 was the notion that capital would begin shifting abroad. Attractive valuations compared to U.S. equities, ongoing stimulative measures in Europe as well as “carry trade” funding of higher-yielding assets contributed to several high conviction purchases. Chief among them? iShares MSCI New Zealand (ENZL). [...] Continue Reading...


Managing ETF Portfolio Risk: Be Mindful Of Reversions To Long-Term Averages

The Internet buzzes with predictions for the next bear market. Some use fundamental analysis to make their case. For instance, Shiller’s cyclically-adjusted price-to-earnings ratio for U.S. equities (PE 10) employs 10 years of trailing corporate profits. It currently stands at 25.6, while the historical average is roughly 16.5. This suggests that if U.S. large-cap stocks [...] Continue Reading...


Uber and Tech ETFs: Stupid Is As Stupid Does

Economist Hyman Minksy argued that when a private sector accumulates too much debt, an economic system buckles. Supporters of his theories point to the catastrophic effect that sub-prime mortgages had on the 2007-2009 U.S. economy. Detractors simply highlight the 2010-2011 euro-zone crisis. In essence, the excessive borrowing and spending by beleaguered European nations nearly destroyed [...] Continue Reading...


Are Record Levels Of Consumer Credit Dangerous To Your ETF Portfolio?

Technology was the best performing sector in the five years prior to the 2000-2002 stock market bear. The acceleration of dot-com mania created a boom-to-bust scenario that few had ever seen. Yet “tech” actually weakened before other segments of the economy. What’s more, corporate shares of technology companies witnessed far more violent sell-offs than stock [...] Continue Reading...


3 “Risk-Off” Signs For ETF Investors

Committee members of the U.S. Federal Reserve forecast economic growth every year. Not surprisingly, investors place a great deal of faith in those projections. After all, Fed estimates may impact monetary policy. Estimates for each of the last five years turned out to be exceedingly rosy. Time and again, the “recovery” turned out to be sluggish [...] Continue Reading...


Are Precious Metals ETFs Dead In The Creek?

Flash back to the summer of 2011. The U.S. Congress struggled with a decision to raise the debt ceiling. The “PIGS” (i.e., Portugal, Italy, Greece, Spain) had dramatically overspent, endangering the existence of the euro-zone. Stocks cratered. The CBOE S&P 500 Volatility Index (VIX) soared. Meanwhile, the SPDR Gold Trust (GLD) catapulted 26% in a [...] Continue Reading...


“Old Tech” ETFs Are Better Risk-Reward Prospects Than “New Tech” ETFs

Scores of investors often regard Benjamin Graham as the grandfather of value investing. Even those who shun Graham’s methods of analyzing securities tend to revere quotes attributed to him. For example, on market complacency, “… chief losses to investors come from the purchase of low-quality securities at times of good business conditions.” In this discussion, we [...] Continue Reading...


The Great ETF Rotation Is Accelerating

Back on April 9, I talked about a “Great Rotation” away from momentum plays (e.g., biotech, Internet, small-cap growth, etc.). Where did the smart money go? Demand had been picking up for the least popular asset classes from 2013, including long-dated treasuries, select emerging markets as well as commodities. Five trading weeks have passed since I [...] Continue Reading...


ETF Moves You Can Make Before The Crowd Gets Restless

Nobody can tell you when a 10% stock market pullback is imminent. That has not stopped many from issuing erroneous prognostications over the last 31 months. By the same token, no individual can predict when a correction will morph into a 20% bearish sell-off. Yet Marc Faber (”Dr. Doom”) has routinely served up enormously frightful [...] Continue Reading...


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