An Uncertain Bull Market
Ă‚Â This is an unbelievably good market one may say, as of May 16, the S&P 500 is up 3.3% for the month and over 15.7% for the year. Just look at the numbers, the S&P 500 had six consecutive positive months and only four negative months for the past nineteen months going back to October 2011. If we continue at this rate the S&P 500 might be touching 2,000 mark …
This Low Volatility is Dangerous for the Markets
I was invited to speak at a conference recently. As I was presenting my ideas about generating alpha, some folks were nodding their heads gently in approval, some were doing their BlackBerry prayer, and some were simply “not present”. Typically that’s how it would end: some exchange of ideas, a nice conversation, but no more. But I had more to say. I started talking about volatility and how it effects …
How to Short the Market
Nice couple of days we are having so far. The S&P 500 is up with help from the tech sector due to Apple’s (AAPL) positive earnings surprise, helping to lift the SPDR Technology Select Sector (XLK) with it. So is this an upswing? Are we past the April blues? Based on our Sector Scoring and Allocation Methodology (SectorSAM) our view is that we are in a mildly positive upswing (see …
Four ETF Rules to Live By
In general ETFs are excellent investment vehicles. They are liquid and transparent, for one thing — you can always see what they hold, unlike the mutual funds. They also trade in real time, like stocks, and typically have lower management fees. ETF are just better technology than mutual funds. It is no wonder that ETFs are rapidly replacing mutual funds as investment vehicle of choice. But, in meeting with a …
Not Time to Panic
After a beautiful first quarter, which brought the S&P 500 a wonderful 12% return, things turned drastically downward. So far this month, the S&P 500 is down 2.82%. What is going on? Are we in for continued downward spiral or is this a correction? If you look at the first-quarter numbers, they all reflect rebound in economy and show growth. The top performing sectors showed continued stabilization of the financial …
There’s Always a Bull Market Somewhere
“Taking a buy-and-hold approach with sectors is like buying a Ferrari and then driving behind a school bus the rest of your life,” so begins Chapter 5 of Sam Stovall’s book, The Seven Rules of Wall Street. Without a doubt, if I had a Ferrari I would not want to drive behind a school bus ever. So, clearly I was intrigued by this. Here’s a bit of background about Sam …
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 …
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 …