During the last eight months, with the market bouncing up and down, there have been times when I did not look too smart buying stocks through it all.

Of course I looked the most foolish on March 9, when I wrote the prophetic Nostradamus was a punk! Have we reached bottom? Some folks were commenting that they were staying in cash until the DJIA dropped to 5,000. Today that looks highly improbable, even if the market gives something back over the next few months.

There must be some readers that also have contrarian instincts and made good money this year. This is a reminder to take something off the table. It's time to book some gains. We all did great in 1999 and 2000 only to give it all back and then some. Don't let that happen to you again!

Continue reading Serious Money: ETF that's better than cash

Serious Money: ETF that's better than cash originally appeared on BloggingStocks on Wed, 20 May 2009 15:20:00 EST. Please see our terms for use of feeds.

This post is part of a series in which TheStockAdvisors.com asked financial experts to name their top stock pick if McCain or if Obama wins the election.

"Go nuclear if McCain wins," says mutual fund and ETF expert Doug Fabian. Here, in his Successful Investing newsletter, the advisor looks at the Market Vectors Nuclear Energy (NYSE: NLR), an exchange-traded fund that focuses on the sector.

"What is likely to happen if McCain wins the White House? Well, based on what he has said so far in the campaign, I think we can make the following assumptions about the sectors most likely to thrive.

"When it comes to energy, we already have seen that McCain is a big fan of oil drilling. It is thus not a stretch to think that oil services and oil drilling firms are likely to thrive if the Republican takes power.

"McCain's other energy focus is nuclear, and that's good news for companies doing the yeomen work in the space. Once again, when it comes to getting invested in the best companies in a specific market sector, ETFs continue to be our best friends.

"The Market Vectors Nuclear Energy ETF is a fund designed to give investors exposure to the best companies in the nuclear energy sector.

Continue reading McCain stock: Fabian powers up with nuclear ETF, Market Vectors Nuclear Energy (NLR)

McCain stock: Fabian powers up with nuclear ETF, Market Vectors Nuclear Energy (NLR) originally appeared on BloggingStocks on Mon, 06 Oct 2008 09:58:00 EST. Please see our terms for use of feeds.

Mark Hulbert at MarketWatch

Dow 16,000? C'mon! originally appeared on BloggingStocks on Fri, 28 Mar 2008 14:20:00 EST. Please see our terms for use of feeds.

Continue reading ETFs every investor should know

ETFs every investor should know originally appeared on BloggingStocks on Wed, 26 Mar 2008 11:12:00 EST. Please see our terms for use of feeds.

According to The Wall Street Journal's Weekend Edition, investors are in for a treat:

A potentially cutthroat price war is shaping up between two of the biggest firms in the exchange-traded-fund business.

In coming weeks, Vanguard Group plans to roll out an ETF designed to directly undercut one of the biggest products on the market, from rival Barclays Global Investors, a unit of Barclays PLC (NYSE: BCS).

Vanguard is launching the Vanguard Europe Pacific ETF to track the MSCI EAFE index, which provides investors with broad exposure to developed-market equities.

The fund and its obscenely low 0.15% expense ratio take direct aim at Barclays' iShares MSCI EAFE ETF, which has an expense ratio of 0.35%.

Given that low expenses are perhaps the single greatest predictor of a fund's performance, this is awesome news for investors. Baseball speedsters like Kenny Lofton and Carl Crawford are often seen as reliable because it is said that "speed never goes into a slump." A power hitter like Barry Bonds or David Ortiz might lose his home run stroke for a while, but base-stealers can always run when healthy.

Low-expense funds are the Rickey Hendersons of personal finance, and as expense ratios continue their descent, investors will reap the rewards, although the profits of fund managers may decline.

Good news! An ETF price war! originally appeared on BloggingStocks on Mon, 09 Jul 2007 16:53:00 EST. Please see our terms for use of feeds.

It's great to see advisers increasing the use of ETFs. ETFs often have lower expense ratios than mutual funds, partly because the vast majority are passively managed index funds. A shift to ETFs in all likelihood means a shift away from actively-managed funds, and as reams of data show, that is great news for investors.

However, as always, I think investors can do better with ETFs without a financial advisor. ETFs generally are tax efficient and have low expenses, but adding the expense of a financial advisor can make those fees look a lot more expensive. Active trading tends to eliminate their tax advantages.

Continue reading Barron's wonders about ETFs as financial advisors turn to them more

Barron's wonders about ETFs as financial advisors turn to them more originally appeared on BloggingStocks on Fri, 06 Jul 2007 11:10:00 EST. Please see our terms for use of feeds.

I consider myself a proponent of exchange-traded funds (ETFs) as the best way for investors interested in making short- to medium-term macroeconomic bets. The Wall Street Journal has a nice article on the pros and cons of these investments. ETFs provide the potential for concentrated exposure to certain sectors or countries that can be very difficult to get through a conventional mutual fund -- In many cases, the expense ratio on an ETF is lower than that of a comparable index mutual fund.

Just as the tradability of ETFs is one of their most attractive qualities, it can also get you into trouble: ETFs almost beg to be traded and, even with $10 commissions, frequent trading can wipe out the advantages they have over traditional mutual funds.

The brokerage commissions make ETFs unsuitable for dollar-cost averaging or investing regular small amounts of money. As the Journal writes, "ETFs can be cheaper than conventional index funds for investors who have a big lump sum, like an inheritance or proceeds from a property sale, to invest. But if you are making numerous small investments, conventional index funds are typically a cheaper way to save for the long term."

So if you want to try your hand at George Soros-style macroeconomic bets, ETFs make that easier to do than ever. Marvin Appel's Investing With Exchange-Traded Funds Made Easy: Higher Returns With Lower Costs -- Do it Yourself Strategies Without Paying Fund Managers is the best introduction to to ETFs I've seen.

To do research on individual closed-end funds, visit ETFConnect.com.

The advantages of exchange-traded funds originally appeared on BloggingStocks on Mon, 21 May 2007 17:39:00 EST. Please see our terms for use of feeds.

Is volume no longer a valid indicator for small stocks? originally appeared on BloggingStocks on Sat, 10 Mar 2007 11:10:00 EST. Please see our terms for use of feeds.

Today is the last installment in the Financial Times' series on exchange traded funds. While most ETFs are passively managed index funds, the newspaper discussed fundamental ETFs, which are sort of a hybrid between active management and passive management. While traditional index funds are composed and weighted based on market cap, fundamental funds are weighted based on fundamental metrics, such as earnings, dividends, or the book value of companies. In some cases, they can be weighted to fit a certain investment style. For instance, a value ETF might select companies based on price/book ratio or dividend yield.

John Bogle, founder of Vanguard and probably the best friend individual investors will ever have, is skeptical of the funds. He told the Times, "They come armed with vast statistical studies that prove how well their methodologies have worked in the past....but in mutual fund investing, the past is not prologue." As any fund prospectus warns, past performance is not a guarantee of future sucess. Yet in spite of that warning, most funds brag about their past performance in advertising.

I would stay away from fundamental ETFs and stick with traditional index ETFs as a way to make investments based on macroeconomic bets. That has always been their greatest strength and I think it still is.

Fundamental ETFs originally appeared on BloggingStocks on Tue, 06 Feb 2007 17:40:00 EST. Please see our terms for use of feeds.

ETFs for the macro-investor originally appeared on BloggingStocks on Mon, 08 Jan 2007 10:56:00 EST. Please see our terms for use of feeds.