It's one of those unfortunate facts of life, everyone is going to get sick at some time in their lives. It could be something as simple as the common cold or a complex series of symptoms that takes years to diagnose. The upside of all of this is that the medical business is a relatively safe bet when it comes to investments. If you see the benefit of this and want to put some money into a health care related investment, look into an Exchange Traded Fund (ETF) that will give you the opportunity to hold shares in several different companies rather than trying to guess who's going to come up with the next miracle cure.
There are a couple different companies that let you get your feet wet in the medical field. You could invest in medical devices, which covers everything from stethoscopes to complicated surgical tools. iShares Dow Jones US Medical Devices ETF (NYSE: IHI) lets you in on an investment that includes leaders in the field such as Boston Scientific Corporation (NYSE: BSX), Medtronic, Inc. (NYSE: MDT), and Covidien, Ltd. (NYSE: COV). Each of these companies provides medical devices that hospitals simply cannot do without.
IHI looks to achieve results that correspond to the Dow Jones US Select Medical Equipment index and through a computer aided system, rather than by using money managers, they're able to charge only a 0.48% fee to maintain your stock.
Another great way to invest in the healthcare business is to buy shares in the companies who work tirelessly to provide lifesaving drugs. The Exchange Traded Fund SPDR S&P Pharmaceuticals (XPH) lets you in on several of the top pharmaceutical companies in the world by following a passive management strategy that tracks the total return performance of the S&P Pharmaceutical Select Industry index.
It seems that everywhere you turn you hear something about the price of gold, from analysts to commercials encouraging you to sell your old jewelry for big bucks. If you're tempted, how about a bit safer investment in the commodity? Let your money work for you -- invest in an Exchange Traded Fund (ETF) that hold shares in several different gold producers, and you can ride the wave of the industry.
Market Vectors Gold Miners ETF (AMEX: GDX) is a perfect opportunity to ride this wave with as the fund's goal is to mimic the price and yield performance of the AMEX Gold Miners index, before fees and expenses. This is a nondiversified fund that is comprised of several well known companies whose main operations involve gold and silver mining.
There are two reasons to buy GDX instead of the SPDR Gold Trust (NYSE: GLD) or the iShares Comex Gold Trust (NYSE: IAU) both of which are pure gold ETFs (you own a share of gold sitting in a safe). First, the ratio between gold and the value of the gold held by miners has been relatively stable for 30 years. But today, the gold miners are selling at 33% of that historical ratio, so bulls say it's better to buy the miners, not the metal. Second, the biggest expense of a mining company is energy. Oil today hit $54 per barrel, down 63% from a peak of $147. This adds to the profits of the Gold Miners.
The telecom business is definitely not recession-proof, as those that have followed the industry have recently realized, but it is not a field that is going to fade into the horizon any time soon either. Simply put, people need to communicate and the telecom business is poised to continue rolling with the new technology and bringing people what they need. If you see the value of telecom companies and agree that their future is, perhaps not golden, but definitely strong, then an investment in an Exchange Traded Fund (ETF) is an excellent way to invest in the future of the telecom field without placing all of your trust in one specific company.
iShares S&P Global Telecommunications Sector ETF (NYSE: IXP) let's you own shares in some of the most noted and reliable telecom companies by simply purchasing shares of the one ETF. With IXP you'll find your investment basket is loaded with companies such as Amercia Movil, S.A.B. (NYSE: AMX) a fixed and wireless provider in Latin America, AT&T, Inc. (NYSE: T) a telecom provider for customers in the U.S. and worldwide, Verizon Communications (NYSE: VZ) a wireline and domestic wireless provider across the globe, as well as several other highly rated and well known telecom leaders.
iShares charges only a 0.48% fee to maintain IXP using computers rather than money managers. IXP also has typically paid about $1.50 per year in dividends -- IXP is down about (41%) this year so that's about a 4% yield -- and these companies seem to have the cash-generating ability to continue dividends.
Of the 44 stocks in IXP, the top 10 holdings total about 71% of all total assets. Take note of the global exposure you'll get by investing in the future of the telecom industry:
The Nasdaq Stock Market announced Thursday that trading volume on ETFs reached a new record in September with an average daily trading volume of 785 million shares. That was part of a new record trading volume of 3.3 billion shares.
IndexUniverse says that ETFs now make up more than one-third of the U.S. market trading volume. They cite data from the National Stock Exchange , which says ETFs represented "a record 35% of all U.S. equity trading volume." That's up from 31% in August. Think about that: more than one-third of stock trades in America are for exchange traded funds.
Trim Tabs just came out with a report showing investors have been pulling money out of stock funds -- but throwing them into ETFs. Trim Tabs estimates investors took well over $40 billion out of all mutual funds in September, but meanwhile put about the same amount into ETFs. For the last 12 months, we've pulled $117 billion out of mutual funds and put $127 billion into ETFs.
For individual investors, the move makes sense. When the market is moving around like it has been, it's scary to be in a vehicle where you can only trade at the end of the day? But I can't imagine that all of that ETF volume isn't helping whip around the prices of the underlying shares.
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.
"One sector that I think will perform well if Obama wins the election is industrial infrastructure. The Democratic candidate repeatedly has said that the nation needs to rebuild its aging infrastructure, including bridges, the power grid and our water delivery and reclamation system.
"I think there will be a lot of federal money doled out to the states for this purpose if Obama is president -- especially if the Democrats gain seats in Congress.
"One way to play this likely increase in infrastructure spending is via the Industrial Select Sector SPDR, an exchange traded fund focused solely on this area.
"This ETF includes companies from the following industries: building products, construction, engineering, electrical equipment and conglomerates.
"This fund normally will invest at least 95% of its total assets in common stocks that comprise the Industrial Select Sector Index."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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.
"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.
The Wall Street Journal reports (subscription required) that XShares will close 15 of its 19 HealthShares ETFs, redesign the remaining four, and launch a few new HealthShares ETFs sometime in the fourth quarter.
XShares will, of course, bill this as a strategic shift but closing 15 of 19 funds is hardly an indicator of success and the HealthShares funds were pretty hyped up. More than a year ago, MarketWatch columnist Chuck Jaffe trashed the funds, calling them his "Stupid Investment of the Week."
The HealthShares ETFs failed to catch on with investors, and that's probably good: with expense ratios that were quite high for ETFs, and holdings that were very limited and gimmicky (An ETF that invests only in companies in the field of dermatology? Michael Jackson is out of money: Short it!), this isn't exactly a surprising failure.
For most investors, I don't think ETFs are the new paradigm that they've been made out to be: the ability to trade them like stocks on major exchanges may lead many to over-trade and, while a diabetes ETF might seem cool, most people would be better off just buying a total market index fund.
"There's no 'silver bullet' solution to the energy crisis; but there are some solutions that do work," says Sean Broderick, referring to wind and solar power.
In The Safe Money Report he says, "There are with some choice ETF to power your own bottom line." Here's a look at the two green technologies and how you can invest in these developing fields.
"Many Americans are disgusted by the fact that, faced with an energy crisis, the government seems to produce nothing but hot air. So let me give you my appraisal of two alternative energy solutions that work -- along with some choice exchange-traded funds that can power your own bottom line. Here are two energy solutions that work right now.
Solution #1: Wind Power
"Critics will point out that the wind seems to stop blowing when you want electricity most -- on hot summer days. And that is a problem. However, a study last year by Stanford University shows that wind power from interconnected farms can be used as reliable base load electric power.
Mark Hulbert at MarketWatch wrote about influential investment newsletter editor, Richard Band's outlandish forecast that the Dow Jones Industrial Average may end the year at 16,000. This very bullish estimate of a 33% gain in the index from someone who's not typically a headline-grabber made Hulbert take note.
Hulbert, who tracks performance of some of the best newsletters in the business, has been tracking Band's Profitable Investing newsletter since 1991. In that time period, Band returned a 8.6% annualized return compared to an almost 11% annualized return in the Wilshire 5000.
Not bad but not outstanding. So why is Band all bulled up?
Technical factors have Band singing a very upbeat tune. The first, according to the article "has to do with the stock market's internal characteristics when it hit a low earlier this month. Band argues that that low possessed "many striking technical resemblances to the great bear market bottoms of the past.""
So, how does Band recommend playing the markets at this important juncture. He recommends a couple of market ETFs. Specifically, Band points to the iShares Russell 1000 Growth Fund (NYSE: IWF), the iShares MSCI Emerging Markets Index Fund (NYSE: EEM). Another recommendation is in a fund I've never seen before (but maybe I should): the Selected American Shares (SLASX). This fund, a 4-star fund according to Morningstar, invests in US large caps and has returned an annualized return over the past 5 years of almost 13%.
Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
I primarily trade fun smallcap stocks, so until the past few days, I hadn't either. But when I began researching, I just kept finding more and more interesting ETFs -- it was addictive! Almost addictive as my new Twitter account where I've discovered I can chat with business legends, yesterday it was the founder of eBay Inc (Nasdaq: EBAY). Okay, maybe ETFs will never be that addictive!
Out the few hundred ETFs I looked into, here were some of the more interesting of the bunch:
People are always looking for the perfect investment that is going to be able to beat the market. I have been intrigued recently with the Ultra EFTs. For some investors Ultra ETF's may be the magic bullet to beat the market over the very long term.
ETF's such as SPY, QQQQ and DIA have become very popular tools for investors to mirror the indexes with minimal fees. The QQQQ has a management fee of 0.40% a real bargain compared to some mutual fund fees. The ETFs do not try to beat the market they try to match the market; but for an investor who has other investments it can be a great vehicle.
Recently, I noticed the ultra ETF and I guess they have been around for a couple of years. Ultra ETFs try to exactly double the market performance. If the market goes up 2% their goal is to go up 4%. On the other hand if the market falls 3% their goal is to fall 6%. No matter what the market does; the ultra EFT is suppose to double it.
The SEC is on the verge of approving a new type of ETF [subscription required] -- one that is actively managed, according to the Wall Street Journal.
Traditionally, ETFs have been index funds that simply buy and hold a basket of stocks, rebalancing on a quarterly or annual basis. Similar to closed-ended funds, an investment in a certain ETF could soon be more than a way to make macroeconomic bets; it could be wagering on the ability of a fund manager to beat the market.
The problem with that is that history has demonstrated amply that that's not a good bet to make. The vast majority of highly-skilled professional money managers do no better than passively-managed index funds -- and are less tax efficient and charge higher fees than index funds.
The best thing for most investors to do is to ignore these exciting new ETF-hybrid products. There will be a few winners, but it's a pretty safe bet that, on average, the traditional ETFs will outperform them.
To browse ETFs for possible additions to your portfolio, visit ETFConnect's Find a Fund screener.
The SEC has moved closer to approving the issuance of active exchange-traded funds by Invesco Plc's (NYSE: IVZ) PowerShares Capital Management. The Wall Street Journal reported that this is the start of additional SEC approvals that will change the face of the mutual fund industry.
The Wall Street Journal also reported that despite some major cost cutting efforts, General Motors Corporation (NYSE: GM) may be challenged to come close to breaking even this year. The company still has "serious kinks" in its core automotive business in North America.
According to the Financial Times, Morgan Stanley (NYSE: MS) will not be able to form a landmark securities joint venture in Vietnam after the government gave in to pressure from rival banks that did not approve of the deal.
OTHER PAPERS:
The Associated Press reported that Google Inc (NASDAQ: GOOG), looking to compete with Microsoft Corporation (NASDAQ: MSFT) in the e-mail security for businesses space, is expected to announce tools today that will build upon technology acquired last year from Postini and are designed to protect against leaks of information and to weed out potential viruses.
With the explosion in the exchange traded fund market, it was inevitable that we would get news that some ETFs were closing down. Following a recommendation and approval from their board of directors, Claymore filed with the SEC on Friday to close 11 of their 37 ETFs. See Zac Bissonnette's analysis of why he thinks total market index funds are the way to go.
There are two main questions skeptics have with all the ETFs on the market.
How many U.S. large cap ETFs can there be?
How many investors are interested in some of the minutiae ETFs that exist.
For example one of the funds that Claymore is closing is the Claymore/Clear Global Vaccine Index (AMEX: JNR). How many investors feel it necessary to have as part of their asset allocation, exposure to a global vaccine index? Have we heard investors pounding down the door asking for such an index?
I am a big believer in ETFs, and I think they will continue to grow and provide investors with a low-cost way to invest, and in many cases a more profitable way to invest as well. But as frequently happens, things go a bit too far. Look for Claymore's announcement to be the first of many as we get a bout of consolidation and closings in the ETF industry.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has no positions in any stock mentioned as of 2/3/08
For those who wish to hedge a portfolio against downside risk, Nate Pile suggests a pair of ETFs that benefit from a market decline. Here is the latest from his Nate's Notes.
"Although I would argue that much of the potential bad news has already been factored into stock prices, one of the mantras I have come to respect over the years is 'don't find the trend'... and the trend is currently down.
"Thus, I believe it would be foolish to not take at least a few cautionary steps with regards to protecting our portfolios until it becomes more clear just how bad things are going to get.
"As a result, I am recommending two 'short fund' ETFs as short-term investments -- ProShares UltraShort Dow 30 (AMEX: DXD) and the ProShares UltraShort QQQ (AMEX: QID). Both are designed to provide results, before fees and expenses, which correspond to the inverse of the performance of their respective indexes.
The Wall Street Journal 
"There's no 'silver bullet' solution to the energy crisis; but there are some solutions that do work," says 
Mark Hulbert at MarketWatch
If you've ever delved into investing in ETFs (exchange-traded funds, basically entire indexes and sectors that trade like stocks), you're already familiar with the most popular, those being 
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