Here in the first week of April of 2013, an overwhelming number of folks believe one truth to be unassailable. For worse or for better, the U.S. Federal Reserve’s unconventional interest rate easing has pushed dollars into riskier assets, including higher-yielding debt, equities and real estate. Beyond crediting the Fed with a modern-day “wealth effect,” however, [...] Continue Reading...
I came across an interesting fact on the news wires recently. The S&P 500 has corrected at least 5% at least one time in the first 5 months of every year since 1996. What does that mean? It implies that the probability of seeing the benchmark fall to 1485 from 1565 is greater than any [...] Continue Reading...
The warning signs for a stock market pullback are everywhere. Historically, a 17% move over 17 weeks (sans correction) is not only substantive in size, it may be “long in the tooth.” What’s more, the ultra-low levels on the CBOE S&P 500 Volatility Index (VIX) demonstrate complacency. Seasonal patterns are another concern. Specifically, a wide variety [...] Continue Reading...
Non-cyclical stock sectors (e.g., consumer staples, health care, utilities, etc.) often do well when there are concerns about economic growth. Indeed, exchange-traded funds representing one or more components of the non-cyclical arena have been the key drivers in the broader U.S. market’s run toward all-time records. Nevertheless, it is still a bit surprising that the potential [...] Continue Reading...
With S&P 500 stocks approaching all-time highs daily, it may be more instructive to look at potential hedges and “diversifiers.” Here are 3 ETFs that are less likely to receive accolades when investors are smitten with Google (GOOG) and Gilead (GILD). 1. iShares Silver Trust (SLV). Over the last year, SLV has served as a fine [...] Continue Reading...
In a “Then and Now” piece, the Wall Street Journal published a number of fascinating statistics. “Then” represented October of 2007… the last time that the Dow Jones Industrials Average notched nominal highs. “Now” represents March of 2013… the first time that the price-weighted index ever closed above 14,250. Household income has slipped 5.6% since October [...] Continue Reading...
Media outlets continue pressing the notion that new cash is entering the stock market from the sidelines. And for the most part, this may be an accurate depiction. Anecdotally, many of my risk-averse money management clients have asked me to move them up from “ultra-conservative” to “moderately conservative.” Similarly, a number of traditional “moderates” are asking [...] Continue Reading...
Yellow lights may not signal that a driver should slam on the brakes. On the other hand, anyone who has ever pushed the pedal to the floor to make it through an intersection has been burned by a speeding ticket or three in his/her lifetime. Similarly, when warning signs appear, investors should not abandon every exchange-traded [...] Continue Reading...
Bullish commentators have been busy admonishing those who might be cautious. Their reasoning? Long-term investors should focus on the signs that point to stable economic growth in the U.S., a recovery in China as well as unwavering stimulus by the Federal Reserve. Besides, with Treasuries offering more risk than reward, where else are you going [...] Continue Reading...
The Guggenheim Insider Sentiment ETF (NFO) has been around long enough to demonstrate its chops. During one of the worst downturns in U.S. history (10/07-3/09), both NFO and the S&P 500 SPDR Trust (SPY) reached a similar bottom at a similar pace. Buying-n-holding either one of these exchange-traded trackers was a recipe for ridicule. During the bull [...] Continue Reading...
