Back to Relative Value
Back some weeks ago I talked about the “oil bubble”. Or more specifically the panic reaction to the political events in the Middle East. Last week I talked about EPS growth of major US economic sectors. Now I want to put it all together and suggest why Consumer Staples (represented by XLP) and Health Care (represented by XLV) is where you should be now. For the entire first quarter of …
Sector Allocation Today
So you think the recovery is on the way, everyone is talking about. So you want to get on the best growth opportunities, assuming recovery is finally here. Let’s assume for the moment that the recovery is here, then how does a prudent investor participate. My mantra is always to avoid individual stock risk and focus on the bigger picture. The bigger picture is and always will be the economic …
What is an Active ETF
At a conference this week, where I was presenting on the topic of Active vs. Index ETF, I was asked what I thought was a simple question: “What makes an Active ETF”?, which I answered, (see discussion below). Interestingly enough, my answer provoked many different responses and createdĂ‚Â a very lively discussion during my and the following sessions on the topic and definition of Active ETFs as well as indices. …
Active versus Passive ETFs debate – a “pseudo” dilemma
Two questions were asked of me recently “Will active ETFs succeed index ETFs?” and “Has the time for active ETFs to shine finally arrived?”. My short answer to both questions is both Yes and No! Please allow me to elaborate. First of all, the reason index ETFs became so popular is simply that they satisfied the need and craving of many investors to have low cost index investment vehicles. The …
Homemade Absolute Return Strategy
Things are just not getting better with the disaster in Japan and the Middle East turmoil is still have not come to any conclusion. So where would a prudent investor invest to safeguard his/her nest egg? There is fear in the market and safety is the issue. I have spoken several times about Absolute Return strategies on these pages. This is the “holy grail” of a prudent investor, where you …
How to launch your own ETF
With all these ETFs flying around, we as investors have pretty good pool to pick our investments from. In fact, there are even more ETFs coming along. Is that good or bad? Basically this is good, because it gives us more choice. Now what if you are an investment shop, that has a good strategy and wants to take it “public”, meaning making your strategy available to retail investors. I …
Benefits of Diversification in the Health Care Sector
I am all for diversification of my portfolio to reduce risk and improve my portfolio returns. I also think the times are uncertain, both political and economic, and we need some safety and peace of mind. I strongly believe that health sector is a good place to allocate to at this time. My reasons are, political, geopolitical and economic. Let me explain. Political. the health care reform shenanigans are over, …
Oil Bubble
Up, up and away, buy oil, buy energy – when I look at a XLE, IYE, OIH I see an almost perfectly trending up straight line. It looks beautiful, it looks like a sure thing. With the political turmoil in the Middle East and North Africa this looks like the right place to be. Nope, wrong, that’s my opinion! Now why would I say that? Can’t I see the obvious? …
Modern Version of Asset Allocation
In my first posting I spoke about the benefits of the portfolio diversification and modern portfolio theory and last week I discussed absolute return strategies. Here I would like to propose a (relatively) new way to put the two together for better returns with lower risk. As a quick reminder, a classical portfolio allocation would have your portfolio in different asset classes, for example 60% in stocks, 30% in bonds …
A Breed Apart – Absolute Return strategies
Last week I talked about uncorrelated strategies and how to achieve them. I hope that was useful, please let me know. Now I want to take you down further the rabbit’s hole and speak about the Absolute Return strategies and how it will save your portfolio and avoid the types of collapse of 2008. If you are a trader and not an investor, you are yawning already, so I recommend …