Archive | US Markets and ETFs

How Should Investors Prepare For The Credit Cycle’s Retreat?

An economy begins to grow, picks up steam, peaks, slows down, and eventually contracts. The process is known as the business cycle Рan inevitable progression from expansion to recession to renewal and recovery. Central bank policy makers have been trying to eliminate recessions from the picture since the 1990s. Some folks believe that their prescriptions [...] Continue Reading...


Stock Market Levity: What Goes Down Must Come Up?

Issac Newton is famous for having said, “What goes up must come down.” He¬†is equally well-remembered for a falling apple striking his noggin, supposedly inspiring¬†the physicist to develop the theory of gravity. Near market tops, bullish investors embrace the notion of an opposite force: levity. They maintain that what goes down must come back up, [...] Continue Reading...


Billionaires Have Been Raising Cash In Their Portfolios… Should You?

According to a¬†Wealth-X census,¬†the world’s billionaires have roughly 22.2% of their total net worth in cash. That’s the highest percentage since tracking began in 2010. Why are the wealthiest among us choosing an asset that currently yields next-to-nothing? The report cites uneasiness related to the global economy as well as anticipation that asset valuations will [...] Continue Reading...


Here Is What You Should Know About The Last Three Bear Markets

Earnings per share (EPS) for the S&P 500 for Q2 came in at $87. Those results are no better than the EPS data from four years earlier. Worse yet, the $87 GAAP-based earnings are 18% lower than the $106 reached in Q3 of 2014. Now look at the price-to-earnings (P/E) ratio chart below. For the [...] Continue Reading...


Fatal Consequences: One Way Or Another, The Credit Boom Will Go Bust

The conductors of the crazy credit train – Janet Yellen, Mario Draghi, Mark Carney and Haruhiko Kuroda – are running out of tracks. Consider the following: 1. Central banks own $25 trillion of the world’s financial assets. That approximates 8%-8.5% of the total dollar value of stocks, bonds and the array of market-based securities available. [...] Continue Reading...


Why Aren’t Businesses Investing In Their Futures?

The last three times that private businesses cut back on fixed asset expenditures – plants, trucks, tools, software, hardware, equipment, office buildings and other capital goods – the country slipped into recession. Is this time different? Or does company reluctance to buy machinery, commercial real estate and electrical appliances signify that economic contraction is around [...] Continue Reading...


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...


Do Celebrated Fund Managers Know More About the Credit Balloon Than You Know?

There was a time when hedge funds may have offered something unique in the way of performance. You may have been able to make a case for them alongside a mix of stocks and intermediate-term treasury bonds. Over the last three years, however, hedge funds have been downright abysmal. Consider the IQ Hedge Multi-Strategy Index ETF (QAI). It [...] Continue Reading...


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