The New Fundamentally Indexed RALS ETF
Are you a neo-classicist or are you a behavorialist? No, I am not asking you a political question, nor is this a test from you psychology course. It is however the question that Rob Arnott is making us think about. Rob Arnott is no slouch and I recommend we all listen to him. Maybe not necessarily buy (just yet) a new ETF RALS based on his work, but it is …
Active ETFs: Start Paying Attention
There is a lot of talk about Active ETFs. Do I care? Should I care? Is it good for me? Most of the investment community is slowly and finally getting to know and appreciate your basic (at it turns out to be) ETF, when the market is already moving to the next big thing. If you look at the current set of about a thousand ETFs, you will quickly see …
Sector Rotation is Your Friend
We all have our favorite pair of jeans or a favorite sweater. We all have our favorite chair where we like to sit down and read or just simply lounge around. We always go back to that chair in the house, we jealously guard it from potential “intruders”. Why that particular pair of Levi’s? Why is that sweater so special? Why is that chair so relaxing? Well if you ask …
Sectors investing and why you should love it
Sector investing is a fundamental part of the classic asset allocation theory. If you are a prudent investor, who understands risk vs. reward tradeoff, you should look into sector investing, in fact I suggest you start investing in sectors vs. individual stocks. Holding a position in a sector provides inherent diversification and it reduces individual company risk. The bottom line is that investing in sectors provides better risk reward profile …
Short but not short changed
Short but not short changed – inverse ETFs are good tools in our investment toolbox At some point my mother or my father told me not to play with fire, appropriately so, and I most certainly intend to pass on this sage advice to my son. I think a similar advice is floating from lots of financial sources regarding shorting in general and regarding usage of the inverse ETFs in …
A Perfect Marriage
A Perfect Marriage – Classic Portfolio Theory and ETFs I want to get back to basics and talk about fundamental finance theory that we seem to forget at times and that is classic asset allocation. I teach finance and I talk about the benefits of the asset allocation theory time after time, I tell my students that this is where the money is. I practice what I preach – I …
Emerging Market Sectors
Sectors are my friends; they should be your friends as well. Sector investing provides inherent diversification, eliminates individual company risk as well as better liquidity vs. individual names. My firm, The Rockledge Group, focuses on investing in large cap US sectors, but I decided to take a look at emerging market sectors. If you look at the past three month performance you can see that a broad emerging market index, …
Bear Indication
Last week I talked about that this year is going to bring more uncertainty than we expect or want, and in my opinion, more to the downside. Well it started already. The short respite in the market due to us getting rid of the ten plus year menace did not last long. The month to date (MTD) return on the comprehensive S&P 500 index is actually negative 1.19%. So now …
A Very Uncertain Year
Another good positive day on Wall Street. We are coming close to the end of the month and it is another banner month up to now, S&P 500 is up +2.25%. It is up 7.79% for the year already, not bad for barely four months of work. At this clip we will add about 2% per month to a whopping 23% for the year. Now do you really think so? …
Reverse effect of the Dogs of the Dow technique for the S&P 500 Sectors
We all heard of the famous Dogs of the Dow investing technique. This investment philosophy sorts the stocks in the Dow Jones 30 Index by Dividend Yield on the last day of the year. Then an investor takes the top ten stocks with the highest dividend yield and holds them for the entire year, until the next rebalancing point, at the end of the next year. According to the Dogs …