A Salute to One Trailblazing ETF
In the active ETF world, we’ve just hit a major milestone — IQ Hedge Multi-Strategy Tracker ETF (QAI) is now three years old. Although there is no front-page Wall Street Journal article on this, and while CNBC did not pop champagne, I am nonetheless very excited and I believe it is a major achievement — both for the ETF industry in general and active ETF space in particular. The reason …
A Case Study in Individual Stock Risk
As investors, we don’t like surprises. Even if there is a 50% chance of getting a good surprise from our investment, we don’t like the other 50%. We actually hate it, and there is more pain on the downside than happiness on the upside, and we remember pain longer. That’s just human nature. So imagine how Goldman Sachs (GS) investors felt last week, when on March 14 the company’s value …
Quell Your Worries With Liquidity
We’ve all heard the saying, “cash is king,” but in our investment world the word cash should be replaced with the word liquidity. Yes, for us, liquidity is king. Why am I even talking about cash and liquidity in this up market? After all, in this balmy and spring-like March, the market is doing very nicely indeed. Although the S&P 500 was down 1.6% in the first days of the …
Curb Your Worries
The market has dropped like a rock since Feb. 29, with the S&P 500 falling 1.42%, and it feels as though there is more room to go. Should we panic? Is this a beginning of the new “risk-off” period? The beginning of the year was stellar — the “January effect” rolled into some kind of February effect, and the S&P 500 gained an incredible 8.59% for both months. But it …
Alternative Investments Hit the Mainstream
Goldman Sachs says, “We believe the world has changed over the past decade, challenging participants’ ability to stay on track and achieve retirement goals.” This is the headline of Goldman’s recent advertisement promoting alternative investments for defined contribution retirement plans. Now if Goldman Sachs is promoting this, it means that this is either the height of the bubble for alternative investments or the beginning of an avalanche of funds flowing …
Choose Carefully Before Making a Permanent Move
This month Global X launched a new and unique product Permanent ETF (PERM). I would like to applaud the innovation of the product, but criticize its timidness. First, the good. The product aims to provide an all-inclusive answer to investors who seek diversification and invest in many different asset classes, akin to what the endowments do. The endowments, such as Yale and Harvard, allocate their portfolios to different asset classes, …
A Dangerous Game
There’s no doubt about it: Energy is on the rise. The space, as measured by the Energy Select Sector SPDR (XLE), is this month’s best-performing sector. The fund has gained 4.2% as of Feb. 15, outperforming the S&P 500 by 1.8%. Sector ETFs, Month-to-Date Performance Source: The Rockledge Group That’s quite a difference from last month’s performance, when it was close to the bottom of the pile, underperforming S&P 500 …
A Study in Sector Allocation
We are having a very good time now. The S&P 500 is up 4.4% in January and 2.9% going into Wednesday, for a cumulative return of 7.4% year to date. So, yes, it is turning out to be a very good run. What a difference from the virtually zero gain on the S&P 500 for all of last year. Last year was nerve-racking for sure, with so many macro and …
The Benefits of Alternative Strategies
This week’s Barron’s featured an article called “Just Don’t Lose It!” It was an interesting examination of how investors are nervous about the current and future state of the market. Even though January’s market returns were excellent, investors have a good memory of stock and economic gyrations going back to the collapse of 2008, and all the way to the wild up-and-down swings of the past year. This was my …
What I learned at the IndexUniverse Inside ETFs Conference
I just got back from one of the larger and better ETF conferences inside ETFs, sponsored by the IndexUniverse. Clearly being in sunny Florida for a couple of days, getting away from the snow in New York has its attractions. Just seeing bright sun and breathing fresh ocean air does lift one’s spirits and clears one’s mind. But let’s not forget the conference itself. There were over a thousand participants …