Continue reading Schwab's bad advice about sector investing

Schwab's bad advice about sector investing originally appeared on BloggingStocks on Wed, 03 Jun 2009 15:20:00 EST. Please see our terms for use of feeds.

Continue reading Today's technical outlook: Markets desperately seeking support

Today's technical outlook: Markets desperately seeking support originally appeared on BloggingStocks on Fri, 06 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

Continue reading Chip sales fall 22% in December

Chip sales fall 22% in December originally appeared on BloggingStocks on Wed, 11 Feb 2009 08:45:00 EST. Please see our terms for use of feeds.

Investors are always evaluating the landscape to determine where they should put their money. With all of the uncertainty in the banking sector, they are moving into gold. In Europe in particular, exchange traded funds increased their holdings to more than 40 million ounces. This has the effect of establishing a cushion under the market.

The spot "gold fix" in London reached an all-time high of $1030.80 per ounce. On the futures market, gold traded above $900.00 per ounce. Traders expect the price to consolidate at these levels and move a bit higher.

Continue reading Gold is above $900 per ounce

Gold is above $900 per ounce originally appeared on BloggingStocks on Tue, 27 Jan 2009 14:15:00 EST. Please see our terms for use of feeds.

Another record for ETF volume during the market volatility: Coincidence? originally appeared on BloggingStocks on Fri, 17 Oct 2008 09:58:00 EST. Please see our terms for use of feeds.

After rising more or less in line with overall market volume for years, there has been a noticeable surge since the spring in the relative turnover of selected exchange-traded funds (ETFs).

For the SPDR Trust Series 1 ETF (AMEX: SPY), which tracks the S&P 500 index, the average daily volume (ADV) compared to New York Stock Exchange Composite ADV increased from 6.1% in April to 16.8% last month. For the PowerShares QQQ ETF (NASDAQ: QQQQ), which emulates the Nasdaq-100 index, the numbers went from 6.3% to 14.1%. For the iShares Russell 2000 Index Fund ETF (AMEX: IWM), which mirrors the small cap benchmark, relative turnover rose from 3.4% to 6.7%.

Although it's not clear whether the activity was related to hedging or outright position-taking -- or both -- the sharp increase in activity suggests that there has been an important change in the underlying dynamic of the U.S. equity market. If so, it raises some interesting questions.

Could this be a sign, for example, that the influence of hedge funds, proprietary trading desks, and other speculative operators is expanding dramatically? Are investors of all stripes becoming increasingly focused on ETFs as an investing vehicle? Does this emphasis on trading bundles of shares mean that more individual issues are "mispriced"?

Whatever the case, this is a trend worth paying attention to.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle.

ETF volumes have really taken off originally appeared on BloggingStocks on Tue, 18 Dec 2007 10:10:00 EST. Please see our terms for use of feeds.

A chart comparing the S&P 500 index to the MSCI EAFE index (a global benchmark comprised of stocks from Europe, Australia, and the Far East, which has an equivalent exchange-traded fund, or ETF (NYSE: EFA) ) points to a potentially significant shift in the relationship between U.S. and foreign equities.

That is, U.S. shares appear poised for a comeback, at least in relative terms.

Interestingly, this comes at a time when the world at large appears to be suffering from the consequences of a bursting U.S. housing bubble and a meltdown in the American subprime finance sector.

While it is too soon to say for sure, could this be a sign that U.S. investors are beginning to repatriate funds back home? Or that foreigners are reverting to past form with a knee-jerk move towards what has historically been seen as safer shores?

If so, foreign share markets may well suffer disproportionately in the wake of further unwelcome announcements and upheaval in global financial markets.

Some might say that's an ironic turn of events.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle.

Why stocks may be poised for a (relative) comeback originally appeared on BloggingStocks on Mon, 20 Aug 2007 12:50:00 EST. Please see our terms for use of feeds.

As exchange traded funds explode in popularity, investors are having a harder time finding bargains. According to Marketwatch, "In March, shares of closed-end funds covered by Lipper traded at a median discount of 2.34% to net asset value, the lowest level in 12 months. That level marked a 0.86 percentage-point decline from the end of February. During the one-year period ended March 31, the combined discount on closed-end funds declined by 4.29 percentage points."

However, the discount on exchange-traded bond funds has narrowed, meaning that many investors are looking for yield rather than capital appreciation right now. Investors should be careful about investing in ETFs for income, and evaluate them the same way you would evaluate a dividend-paying stock: Is the yield sustainable (What is the payout ratio? How will the payout be taxed?)

In many cases, I think some of the online high-yield savings accounts are the best bet for conservative income investing. They are safe, accessible, and provide yields of 5% and higher. Try ING Direct or Emigrant Direct.

Are ETFs a good bet for income? originally appeared on BloggingStocks on Fri, 13 Apr 2007 20:50:00 EST. Please see our terms for use of feeds.

For the past two decades, Jim Lowell developed an industry-leading expertise in analyzing mutual funds, with a particular focus on Fidelity funds. During that time he developed an annual feature known as his "Hot Hands" pick.

He explains, "Those who have followed my Fidelity Investor newsletter know that one trick in our proprietary playbook has been buying the previous year's best performing Fidelity fund and sticking with it for the new year. More often than not it turns out to be a big winner."

Given the growing popularity of exchange-traded funds, Lowell recently launched a new service, The Forbes ETF Advisor. And for the first time, he is applying his Hot Hands approach to ETFs.

He cautions that this strategy has not beaten the market every year. However, he says, "It has provided very healthy long-term result and I believe that many growth-oriented investors could improve their performance by putting a reasonable (5% to 10%) portion of their money to work following my Hot Hands strategy."

He explains, "Here are the ground rules for the strategy. First I looked at all of the diversified ETFs for each year between 2000 and 2006. I excluded single-sector ETFs, and on the international side, I excluded the geographically nondiversified (single country) international ETFs.

Continue reading Lowell's hot hands strategy: The #1 ETF for 2007

Lowell's hot hands strategy: The #1 ETF for 2007 originally appeared on BloggingStocks on Wed, 14 Feb 2007 08:10:00 EST. Please see our terms for use of feeds.

Please pardon me while I get a bit whimsical here. I get a prose bug from time to time. You must forgive me if this is light duty reading for such a well read crowd but I'm just having fun!
Submitted for the approval of our readers:

If I had bet upon the game and chance did let me win, let's say my take was twenty grand and now let us begin. I'd take ten grand right off the top and invest in GE (General Electric Company (NYSE:GE)). A stalwart and diverse keystone is paramount to me.

I'd next place 4k in the hands of Limited Brands (NYSE: LTD) for care. It's hard to take a loss, my friend, in sexy underwear. And candles bright and fragrances and things the ladies like, assure me that our LTD is on an upward hike.

Two grand I'd sure send Wal-Mart Stores, Inc.'s (NYSE:WMT) way, though kicked around a lot. I just can't seem to shake the truth they'd be a safer spot.

Continue reading If I had won $20 grand on the Super Bowl . . .

If I had won $20 grand on the Super Bowl . . . originally appeared on BloggingStocks on Mon, 05 Feb 2007 11:04:00 EST. Please see our terms for use of feeds.

The Financial Times has a excellent series on Exchange-Traded Funds, an increasingly popular and often superior alternative to traditional mutual funds. In yesterday's article, the paper discussed active ETFs, which differ from the vast majority of ETFs in that they are not passively-managed mutual funds.

While the rise of actively-managed ETFs in inevitable, I think investors would do well to avoid them for the same reason that they should avoid traditional actively managed mutual funds: the expenses will be higher, the tax burden will be worse, and the fund managers will not do any better than the indexes, even before these expenses. The real strength of ETFs, in my opinion, is that they allow active investors to make macroeconomic bets. With traditional mutual funds, you can't trade during the day, and you may be charged a redemption fee if you hold the fund for less than a year.

I've been an ETF-evangelist on this site in several articles. But I was referring to passively-managed funds. If you decide to venture into the waters of actively-managed ETFs that's a whole other story.

Active ETFs and regular ETFs: which is the safer bet? originally appeared on BloggingStocks on Wed, 31 Jan 2007 14:34:00 EST. Please see our terms for use of feeds.

Book Review: Gerald Appel's Opportunity Investing originally appeared on BloggingStocks on Tue, 23 Jan 2007 13:11:00 EST. Please see our terms for use of feeds.