There's an apt story in business: There's always room for one more. Take McDonalds (MCD) and Burger King (BKC) for example. Burger King competes directly with McDonalds.

The same is true in the exchange-traded fund (ETF) craze. There is already an ETF that tracks smartphones: the NASDAQ OMX CEA Smartphone Index (QFON). But like Burger King, we have a brand new ETF that tracks smartphones and other major holdings: the First Trust NASDAQ CEA Smartphone Index Fund (FONE).

Continue reading A New Smartphone ETF Launches

A New Smartphone ETF Launches originally appeared on BloggingStocks on Sun, 20 Feb 2011 10:10:00 EST. Please see our terms for use of feeds.

There's a catch-22 in world food supply and demand. The demand for food from developing nations is putting pressure on supplies across the globe. But governments are getting increasingly nervous and worried about unrest. To try and preempt civil disturbances, governments have stepped in and are buying food staples. This government buying is driving prices still higher.

Algeria and Saudi Arabia have announced extraordinary purchases of wheat, driving prices to a two and a half year high. Last week Algeria bought 600,000 tons of wheat, much more than usual. Saudi Arabia announced plans to double the size of its wheat stockpile.

Continue reading Governments Stockpile Food to Avoid Panic Buying, Social Unrest

Governments Stockpile Food to Avoid Panic Buying, Social Unrest originally appeared on BloggingStocks on Sun, 06 Feb 2011 13:40:00 EST. Please see our terms for use of feeds.

Proshares UltraShort Barc 20 Year Treasury ETF (TBT) closed up 3% on a weak five-year auction. Wednesday is the seven-year auction. February 39 and 40 calls are active on total call volume of 31K contracts, 12K puts. January put option implied volatility is at 31, February is at 33; compared to its 26-week average of 34, according to Track Data. Active call volume suggests investors could either be putting on outright bullish positions or hedging short underlying shares.

AIG (AIG) is trading near a 28-month high. January 60 and 62 calls are active on more total call volume of 33K contracts compared to 15K puts. January call option implied volatility is at 48, February is at 49, May is at 45; compared to its 26-week average of 45, according to Track Data, suggesting non-directional price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Options Update: Proshares UltraShort Barc 20-Year Treasury ETF Calls Active on Rally originally appeared on BloggingStocks on Wed, 29 Dec 2010 09:15:00 EST. Please see our terms for use of feeds.

In earlier days, the commodities markets were dominated by large trading houses and a small percentage of speculators. The trading houses used the markets to buy and sell their products and hedge their risks.

Now the world of commodities is completely different . Hedge funds, pension funds and mutual funds are a growing force in market participation. This year alone, contracts held by investors rose by 12% through October and are 17% higher than June 2008, as reported by the Wall Street Journal (subscription required).

Continue reading Investors Are a Growing Force in Commodities

Investors Are a Growing Force in Commodities originally appeared on BloggingStocks on Wed, 08 Dec 2010 11:00:00 EST. Please see our terms for use of feeds.

The scramble is on. Investors are racing to move money from riskier, higher-yielding trades to more conservative investments. And just like we saw during the financial crisis of 2008, U.S. Treasuries seem to be the conservative investment of choice.

This flight to safety and increased demand for U.S. Treasuries is pushing prices higher, but you need to make sure you are investing in exchange-traded funds (ETFs) that provide exposure to Treasuries with longer-term maturities if you want to take advantage of the boom.

Continue reading TLT: Profit from the Flight to Safety with Treasury Bond Fund

TLT: Profit from the Flight to Safety with Treasury Bond Fund originally appeared on BloggingStocks on Thu, 20 May 2010 14:00:00 EST. Please see our terms for use of feeds.

As a massive oil spill reaches the Louisiana coast, many environmentalists are quick to point out that this oil spill should eclipse the Exxon Valdez disaster.

The White House has even noted that this spill is "a leak of national significance," demanding that no additional drilling take place until the investigation into the oil spill is complete. David Axelrod, White House senior adviser, noted that the president "said he is not going to continue the moratorium on drilling but ... no additional drilling has been authorized and none will until we find out what happened here and whether there was something unique and preventable here." The "here" in the quote refers to the current oil spill.

Continue reading How Will the Gulf Oil Spill Impact Oil Stocks?

How Will the Gulf Oil Spill Impact Oil Stocks? originally appeared on BloggingStocks on Fri, 30 Apr 2010 11:30:00 EST. Please see our terms for use of feeds.

Air travel continues in a state of flux thanks to a "huge cloud of ash" emanating from an Iceland volcanic eruption. In fact, this cloud of ash has covered half of Europe and caused the "largest disruption of air travel since the Sept. 11, 2001 terrorist attacks."

After 6,000 flights were grounded yesterday, 17,000 are expected to remain on the tarmac today. What is the problem? Volcanic ash can block engines and cause them to fail. The problem isn't only in Europe, it has forced the cancellation of half of all trans-Atlantic flights. With thousands of air travelers stranded across the globe and no end in sight, is this another black eye for air carriers?

Continue reading Could Volcanic Ash Make Airlines Go up in Smoke?

Could Volcanic Ash Make Airlines Go up in Smoke? originally appeared on BloggingStocks on Fri, 16 Apr 2010 11:00:00 EST. Please see our terms for use of feeds.

"While global climate change may be over-politicized, there's no disputing that the issue is real," says Larry Edelson. In his Real Wealth, he looks at two favorite exchange-traded funds that invest in the water sector.

He explains, "Food shortages and the lack of fresh drinking water are likely the most acute and immediate problems. For example, Northwestern India is running out of water, China is raising water prices to curb use and Mexico recently restricted the water supply amid a shortage.

"Domestically, unbridled use of groundwater in Arizona is a potential disaster. The problem is pipelines and canals don't extend far enough to deliver water to everyone. And unrestrained drilling in outlying areas is draining the supply.

Continue reading ETFs for water woes

ETFs for water woes originally appeared on BloggingStocks on Tue, 22 Sep 2009 11:10:00 EST. Please see our terms for use of feeds.

Most investors got slammed last year, down 50% or more in their investments. Didn't matter if they owned stocks or real estate, they got hammered. Many have to start over. And if they're near retirement, it's scary. Years of patient investing wiped out, gains that were made over a long time disappeared frighteningly fast.

But now it's time to begin fresh, to rebuild. What's the safest way to regain some or all of the losses without suffering another wipeout?

Continue reading Comfort Zone Investing: Starting over

Comfort Zone Investing: Starting over originally appeared on BloggingStocks on Sat, 22 Aug 2009 10:30:00 EST. Please see our terms for use of feeds.

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.

The New York Times recently made a case for investing in stocks to gain exposure to commodities:

But there is an easy way to get a shot at commodity-like returns, without investing directly in commodities or their indexes. Investors can buy shares of the natural resource companies that produce commodities.

However, investors need to be careful: just because a stock is in a sector related to commodities doesn't mean that it will move with the prices of those commodities. Other factors, including decisions by management, any hedging the company may have in place, and other company-specific factors, may cause their returns to differ from those of the underlying commodities. While it's quite true that, as the New York Times points out, natural resources stocks have outperformed commodities in recent years, that is not a trend that will necessarily continue.

There may be good reasons to buy these stocks, but if you want to make a bet on commodities prices, the best way to do that is with exchange-traded funds (ETFs). Back in his days at the Motley Fool, BloggingStocks contributor (who is the source for news and analysis for private equity, by the way) Tom Taulli wrote a nice piece about how to invest in commodities through ETFs.

If you really want to learn about ETFs, I recommend picking up a copy of Investing with Exchange-Traded Funds Made Easy: Higher Returns with Lower Costs -- Do It Yourself Strategies without Paying Fund Managers by Marvin Appel.

Commodity stocks vs. ETFs: The best bet for buying in originally appeared on BloggingStocks on Sat, 07 Apr 2007 10:10:00 EST. Please see our terms for use of feeds.

Just prior to market's sharp decline, Peter Way cautioned his readers, "There are increasing odds that some market-wide bad times are ahead, and may be getting closer."

Unlike many advisors whose forecasts are based on highly subjective criteria, Way's prediction was based on a specific set of factors that he monitors -- the trading activities of institutional market makers, the positions they establish for their "big fund" clients, and the insurance they take out to hedge these positions. It's a fascinating strategy for more sophisticated investors.

Here, in his Block Trader ETF Monitor he explains, "For some time now, the million-dollar market-makers have sensed that their big fund clients are prepared to flee at a moment's notice. And they know that the exit door is only just so big. Nowhere big enough to let them all through.

Continue reading Big money market makers bet on homebuilders and internets

Big money market makers bet on homebuilders and internets originally appeared on BloggingStocks on Tue, 13 Mar 2007 13:04:00 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.

According to Marketwatch, investors fled global equity mutual funds to the tune of $2.39 billion last week, compared to a net in-flow of more than $2.7 billion in the week prior. What does this mean? If we use the lemming-like retail investors as a contrarian indicator, this is a screaming buy signal.

But there's a problem for mutual funds: If these retail investors are prone to buy at the tops and sell at the bottoms, their redemptions force mutual funds to buy and sell at precisely the wrong times. In January, I wrote about how this trend can effect mutual fund performance. I referred to a recent study that has shown that "liquidity-motivated trades" underperform trades made based on fundamentals. Mark Hulbert has suggested that investors consider using ETFs which, because they are closed-end funds, are not as vulnerable to shareholder redemptions.

I believe that investors should take a long look at exchange-traded funds for this, among other reasons. ETFs are often lower cost, easier to trade, and ideal for making macroeconomic bets. To learn more about ETFs, visit etfconnect.com.

The lemmings are running! Investors flee mutual funds originally appeared on BloggingStocks on Sun, 04 Mar 2007 10:10:00 EST. Please see our terms for use of feeds.