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Blog ArchivesRallies and Resistance - May 5, 2008After many years in this business, I've become so accustomed to the local jargon that I sometimes expect everybody knows it. I was speaking with a friend about some interesting technical analysis of the current market, and he stopped me when I brought up "resistance." Explaining what I meant to him made me think it would be good to review it for you. Read more... More Foreign Currency ETFs to Avoid - May 2, 2008Drastically lower cash yields in the United States are stimulating ETF sponsors to bring out new foreign portfolios. The latest wave comes from WisdomTree and Dreyfus. Enough Americans have come to recognize that the dollar is weak that the industry is betting investors will flock to these things. Don't be among them. The dollar is doing better. Read more... A New Name for Energy - April 30, 2008One of my favorite ETFs recently changed its name. It hasn't changed anything else, fortunately. I have owned this fund for nearly four years, and it's been a part of ETF Insider Model Portfolios since they were launched last summer. Since then, as of yesterday, it has risen 16.6%, more than anything else we own except the hyper-risky BRIC ETF in the Growth Model, which has soared 34.1%. Read more... A Penny Saved … - April 28, 2008Morningstar, the mutual-fund analysis firm, last week released research showing that the average mutual fund investor paid 0.90% in annual expenses last year, down from 1.00% in 2002. Unfortunately, that good news was tempered by the fact these charges didn't go down at all in 2007; they remained the same they had been the year before. Read more... Small Cap ETFs Under the Microscope - April 25, 2008Earlier this week, I recommended boosting our holdings of small-cap stocks. But before acting, I re-examined our small-cap ETF in the context of its competitors. I want to share the results of this research with you. Read more... Buy Small Caps - April 23, 2008We've had some firming of the market lately. I think it's time to rebuild two positions in our portfolios that have been beaten down a bit by the recent unpleasantness. Read more... Private Equity ETFs Scramble Back - April 21, 2008Private equity, or the business of providing capital to unlock more of a company's wealth potential, has been gutted in the bear market. The two ETFs that provide entrée to this investment niche, PowerShares Listed Private Equity (PSP) and PowerShares International Listed Private Equity (PFP) are down 7.2% and 7.4% this year, respectively, as of April 17. And that is after the first of these two portfolios, which came out a year before its sibling, and therefore has a full-year record for 2007, went down 13.6% in that year. Read more... Investor Confidence Is Growing - April 17, 2008You have to love days like yesterday, when the Dow shot up 257 points, or 2.1%, and both the Nasdaq and the S&P 500 did even better. What I found so satisfying is that NYSE volume blossomed to 4.23 billion shares from less than 2 billion the prior day. Optimism is creeping out from behind the headlines. Read more... New ETF Targets Foreign Inflation-Protected Bonds - April 14, 2008Inflation-indexed bonds are not just an American idea. Indeed, Canada brought them out before the United States, and today they have become popular in developing as well as developed countries around the world. SPDR DB International Government Inflation-Protected Bond ETF (WIP), which was launched last month, holds bonds from Sweden, France, Japan, Poland, Germany and Israel among its 74 positions. Read more... Not Out of the Woods Yet - April 3, 2008The April First rally was a bracing tonic for our winter-worn nerves, and a real shot in the arm for our portfolios. At last night's close, our Income Model Portfolio was up 1.1%, Growth & Income up 2.0% and Growth up 2.8% in just two days. Read more... Yesterday's Rally Was No April Fool's Joke - April 2, 2008April First was our Independence Day. After six straight months of market misery, U.S. stocks rebounded explosively, carrying all three of the ETF Insider Model Portfolios back into positive territory since their inception nine months ago. I feel very good about coming through this wretched period almost unscathed. Read more... Dump the Hedge; Buy Financials - March 28, 2008If this is not the bottom, it's getting close. It's time to become more constructive on equities. Read more... Shedding Our Small Cap Hedge - March 25, 2008It's time for us to sell our small-cap inverse ETF. On March 3, I recommended buying it if the S&P 500 Index fell below 1,310, which it did on March 6. As of this morning, however, shares of this fund are down more than 12% since then, due to a Fed-inspired rally that has taken the S&P 500 Index back up to the 1,350 level. The good news is that the fund made up just 2.5% of assets in the Models, so the downside impact on our portfolios has been limited. Read more... Are We There Yet? No - March 17, 2008The amazing collapse of Bear Stearns opens another chapter in the financial horror show, and probably means there's yet more bad news to come. If you haven't already installed equity hedges in your portfolio it's not too late. Like a slow-motion version of the crash of a construction crane in Manhattan over the weekend, each tremor in the global financial chain weakens the entire structure. The bear market is taking another downward step. Read more... New ETN Opens Another Barn Door - March 14, 2008A newfangled kind of ETF that targets agricultural commodities was introduced three weeks ago, and it could offer some interesting competition to the one we use in two of our ETF Insider Model Portfolios. Read more... Rate Cut Rumored as Market Worsens - March 10, 2008Wall Street is buzzing this morning with a rumor that the Federal Reserve will announce an emergency cut in interest rates by 50 basis points, to 2.5%, before its regularly scheduled meeting March 18. That would be the sixth cut in a round of loosening of credit conditions since last September, and the second emergency reduction. Read more... How to Hedge If We Have to Hedge - March 3, 2008The stock market appears to be dribbling towards its low in the current cycle, which was 1,310 on the Standard & Poor's 500 Index, reached on Jan. 22. At that point the benchmark was 16% below its peak, which was set on Oct. 10, 2007. Read more... Active ETFs Rile a Passive World - February 29, 2008Several ETF companies, including PowerShares, have won or are about to win approval from the SEC to come out with actively managed ETFs. Publicly the companies are mum, saying nothing beyond what they've disclosed in SEC filings, but privately some of them are bragging that these new funds are the greatest thing since sliced bread. Read more... This Is How Bond Markets Look on Drugs - February 25, 2008As we approach the end of February, markets are just as confused and contrary as they have been since last summer. With the stock market down 1.3% this month, as of Friday's close, our stock-heavy Model Portfolios are up, and our bond-heavy Model Portfolio is down. Read more... Continuing Turbulence in Financials - February 15, 2008Last week in Orlando, Fla., I had the pleasure of meeting and chatting with a number of subscribers personally at the World Money Show. I'm told there were more than 12,000 people attending the show, and the sessions where I made presentations had audiences than ranged from 100 to 600 people. Back at the InvestorPlace Media booth, however, I was able to speak one-on-one with several dozen folks. I got some great feedback, and I'll be addressing some of the topics we discussed in future blogs and issues of ETF Insider. Read more... A Tax Trap in PowerShares DB Agriculture - February 12, 2008Taxation in the United States is hopelessly convoluted, and nowhere more so than in investments. There are taxes on interest and dividends and short-term gains and long-term gains. And, in PowerShares DB Agriculture ETF (DBA), there is a special 1256 tax. Read more... "Have REITs Turned the Corner?" - February 4, 2008This was the headline Barry Vinocur, editor of REIT Wrap, an advisory service for investors in real estate investment trusts, put on a bulletin he sent to his clients on Friday. He wrote: "There's cautious optimism among a lot of buy-side vets and other 'interested parties' that REITs bottomed in mid-January. And that rather than another bear market rally—remember the 20.7% bounce between August 15 and October 5 of last year—that this time it's the real deal." Read more... ETF 50 Index™ Tumbles 5.9% in January - January 31, 2008The ETF 50 Index™, the industry's leading measure of ETF performance, tumbled 5.9% in January, as big losses overseas and among domestic technology stocks overwhelmed a more-resilient S&P 500. Read more... The Bear Shows a Hint of Moderation - January 29, 2008We have gotten smacked around good in the last few months. We are officially in a bear market, probably induced by a recession, though recessions can't be confirmed until long after they are over. Knowing this, what can we do to protect our portfolios and preserve our capital? Read more... The Bear Market, the Dollar and Foreign-Stock ETFs - January 23, 2008We were richly rewarded last year for putting a portion of our equity assets into foreign-stock ETFs, in no small part because of the long and steep decline in the value of the U.S. dollar. This week's dramatic cuts in interest rates will hurt the dollar even more; most foreign central banks are not cutting rates, making their yields that much more competitive against ours. Read more... White Knight or Night Light? - January 22, 2008The Federal Reserve slashed interest rates in an emergency meeting this morning, hoping to stem a gargantuan slide in global equity markets that began Monday morning in Asia . The three-quarter point drop in the Fed funds rate, to 3.5%, is the sharpest downward move since August 1982—a month remembered on Wall Street as marking the birth of the biggest bull market in stocks in modern history. Read more... My Speaking Schedule at the Orlando Money Show - January 18, 2008In just three weeks, more than 11,000 investors are expected to congregate in Orlando, Fla., for the 2008 World Money Show. It runs from Feb. 6 through Feb. 9 at the Gaylord Palms Resort. As an ETF Insider subscriber, you're entitled to free admission to the show. Just call 800-970-4355 or visit www.worldmoneyshow.com . Read more... When Is a Correction More Than a Correction? - January 16, 2008A correction is Wall Street argot for a 10% decline in a major index, such as the S&P 500. If you consider price only, SPDR S&P 500 Index Trust (SPY) crossed this threshold in December, but then a dividend brought it back. Then on Jan. 8, even with the dividend, it crossed it again, closing 10.6% below its peak on Oct. 10. Read more... Still Too Early on Financials, But … - January 14, 2008Last week, Federal Reserve Chairman Ben Bernanke virtually guaranteed that the central bank will slash interest rates to combat recession. Early in my career, I worked for the Federal Reserve Bank of St. Louis , and served on its internal Open Market Committee, which advised the president of the bank how to vote on rate decisions at the Federal Open Market Committee, or FOMC. Read more... Good News: More Efficient ETF Trades Coming - January 10, 2008We ETF investors are blazing a trail that a vast number of others are expected to follow in a very short time. And that's good news for us, because it will make the marketplace more liquid, driving down transactions costs and encouraging the development of new and more-competitive funds. Read more... IRS Nixes Currency ETNs; ETFs the Better Choice - December 31, 2007The IRS ruled this month against the tax treatment Barclays Global Investors sought for its currency-based exchange-traded notes (ETNs). As I explained in the January issue of ETF Insider , these ETNs offered an alternative to CurrencyShares ETFs, sponsored by Rydex Investments. Read more... Take This December Tax Bill and Shove It - December 17, 2007For mutual fund investors, December is a cruel month. That's when most funds make their annual capital-gains distributions, and this year they can be doozies. Read more... Looking Back at My China and Technology Recommendations - December 12, 2007An ETF Insider subscriber asked for an update on two ETFs we own, a BRIC fund and a tech fund. As I told you previously, I had planned to re-evaluate about this time, before the year ends. Read more... Why ETFs Trade Late - December 7, 2007When you trade ETFs, you might notice that most of your orders indicate the funds you're buying or selling trade till 4:15 p.m. Eastern time, not 4:00 p.m., as is the rule with stocks. Read more... How to Wring Profits From Inflation in Europe - December 4, 2007Inflation in Germany is up to 3.3%, pulling the overall rate of the euro-zone region toward the 3% mark from 2.7% currently. Three percent is a full percentage point above the European Central Bank's stated tolerance of 2%. European money markets are pricing in a rising possibility that, when the ECB meets this Thursday, it will raise interest rates to 4.25% from the current 4.0%. Read more... ETFs Down 4.5% in November - November 30, 2007The ETF 50 Index™ sank 4.5% in November, its largest monthly decline of the year, dragged down by double-digit losses in Asian exchange-traded funds, notably iShares FTSE/Xinhau China 25 ETF (FXI), which tumbled 14.2%. Read more... Time to Hedge Our Equity Bets - November 27, 2007The long-awaited pullback in equities is upon us. So, probably, is a recession. That's poison for stocks. Setting aside the great bear market of 2000-02, to which a recession was only incidental, the recession that began in July of 1990 sent stocks on a roller coaster. The S&P 500 Index (ETFs weren't around yet) fell in seven months of that year, including tumbles of 9.0% in August and 4.9% in September. The full-year decline was only 3.1%, but it felt a lot worse along the way. Read more... Three Rules of ETF Investing: Expenses, Expenses, Expenses - November 20, 2007Perhaps you've wondered why I recommend Vanguard Emerging Markets ETF (VWO) in our ETF Insider Model Portfolios , rather than the much larger and better known iShares MSCI Emerging Markets Index (EEM). The answer is simple. Read more... The Markets Take a Turn - November 2, 2007Let me get this straight: The Fed cuts interest rates and the Dow goes up 138 points. The next day word spreads it probably won't cut rates again, and the Dow plunges 362 points. The day after that—today—employment figures come in higher than expected, and the Dow shoots up 60 points, before it shoots down 60 points. Read more... ETF 50 Index™ - October 31, 2007ETF investors racked up average gains of 3.8% in October, greatly outperforming the broad domestic stock market. But U.S. technology stocks did make a statement, with PowerShares QQQ (QQQQ) shooting up 7.0% in what is usually a strong season for that sector. Read more... ETF Insider Q&A - October 29, 2007Recently I've gotten several emails from subscribers that raise interesting questions about my investment philosophy, particularly with regard to such technical factors as stop-loss orders and options. I'd like to answer two of them here because they are important, and because I want you all to know the limits of my competence. "A man's got to know his limitations," Dirty Harry said, and I know at least some of mine. Read more... ETF Insider Blasts Ahead - October 26, 2007Since ETF Insider was launched four months ago, we've gone through an exciting period, in the Chinese sense of the word. We had the July/August subprime meltdown, and then September's rate cut-fueled recovery, and then this month's subprime echo. Since the end of June the stock market, as represented by SPDR S&P 500 Trust (SPY), is ahead a miserly 1.9%, and more than half of that is from dividends. Read more... An Emerging Markets Alert - October 24, 2007Yesterday Vanguard Emerging Markets (VWO) spurted 2.4%, bringing its gains to 9.8% for the last month and 61.4% for the last year. Today, with the market off again, it's down a couple of points. Read more... The Sky Is Not Falling - October 22, 2007When the Dow sank 2.6% Friday, the media began to pronounce that investors were reacting to lower corporate profits. This is news? Read more... January Effect: Who Cares? - October 19, 2007The January effect is the tendency of small-capitalization stocks to enjoy a rally in the month, having been depressed by profit-taking and tax-loss selling in December. But how well does it really work? Read more... How to Take Income From an ETF Portfolio - October 18, 2007Recently I got this email from one of our subscribers: "Tim, what's the easiest way to withdraw funds from income that ETFs produce?—T.W." I recommend three rules to income investors of all stripes, whether they use stocks, mutual funds or ETFs: Read more... Transitioning a Portfolio to ETFs - October 12, 2007Whether or not you're a new investor, ETFs are probably new to you. Nearly half of all of these streamlined, low-cost portfolios have been introduced this year. When the bear market started seven years ago there were 30 of them; since the bulls began running in 2003, their numbers have exploded to more than 550. Read more... An All-In-One Foreign Gem - October 10, 2007A flashy new Vanguard ETF offers complete foreign exposure in a single fund. If you're still trying to make up your mind on how best to invest overseas, this is an easy and efficient choice. Read more... CNBC Appearance Video - October 9, 2007If you didn't catch my appearance on CNBC's Closing Bell program yesterday, you can watch the video here. In this video, I discuss the investment portfolios of the major presidential candidates, as revealed in their required federal election financial disclosure documents. Read more... Appearing on CNBC Today - October 8, 2007I'll be appearing with MSN Money on CNBC's Closing Bell program today, October 8 , at about 4:30 p.m. Eastern time to discuss the investment portfolios of the major presidential candidates, as revealed in their required federal election financial disclosure documents. Read more... Tech Trading Opportunity - October 5, 2007I am not a trader, but sometimes trading ideas pop up, and the next two months or so is usually a fantastic time for tech. Read more... ETF 50 Index—September - October 2, 2007The ETF 50 Index™ finished September ahead 4.7%, its largest monthly gain this year. The benchmark of the most widely held exchange-traded funds advanced 3.5% in the third quarter to finish the first nine months of the year ahead 11.5%. Read more... Inflation Antidote: Energy, Especially Oilfield Services - September 28, 2007Though markets have celebrated lower interest rates the last couple of weeks, easier money raises the specter of rising inflation. If you don't have exposure to energy, get it. Oil is priced in dollars. Lower U.S. interest rates mean a weaker dollar, and oil producers won't happily accept a pay cut; they'll boost prices. Read more... Emerging Markets Give Our Dollars a Boost - September 26, 2007If you think emerging markets have gotten way ahead of themselves—up 175% in the last four years—think again. Developing countries are doing so well that even their currencies are contributing bonus dividends to U.S. investors. Read more... Nothing Looney About a Weak Dollar - September 24, 2007The Canadian loonie is now, for the first time in 30 years, trading on a par with the once almighty dollar. If you think that's looney, you're missing a major investment opportunity. Read more... Stocks Take a New Direction—Up - September 21, 2007When the Federal Reserve slashed interest rates by half a point, it restored confidence to a market that had been losing it. Because of this, I am very bullish about the near-term outlook: The market is going up from here. The only question is, what's the best way to catch the wave? Read more... Rate Cut Brightens Market Outlook - September 19, 2007The Federal Reserve's decision yesterday to lop half a point off interest rates sent SPDR S&P 500 (SPY) up 2.9%, bringing its year-to-date return to 8.4%. Not bad for a year of living dangerously. Read more... |
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