Tag Archives: ETFs

POCKETBOOK: Week ending June 17, 2018

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  • Not so subtle signs

The great divide between our two America’s — one in which the wealthy enjoy the fruits of their fortunes and the much larger group that finds making it harder and more challenging than ever—is not-so subtly showing signs of widening.

On the one hand, the Fed says the economy is roaring along just fine even guestimating GDP growth could hit something like 4% this year. On the other, the second rise in key short-term rates this year from 1.75 to 2% may add pennies to one’s saving accounts and money market fund accounts. But, it is also making a bigger dent  for those  who will see increases on the interest rates charged by credit card accounts,  rates on mortgages, variable line-of-credit accounts,  car loans. etc.

And everybody is noticing. Two examples: CNBC reported that half of Americans aren’t taking summer vacations this year and  real estate developers are offering super deals for new home buyers.

In my local paper on Friday (6/15/18), I saw  new home developers offering  mighty attractive discounts to entice  new home buyers to buy.

At On Top of the World, a 55+ community in Ocala, Florida where new homes are priced from the $160s to over $400s, ran a full-page read, “GET MORE FOR LESS” offering a 25% on all options.

Divosta, a developer with a huge and long-standing presence in Palm Beach County, was —get this— giving a free pool with screen enclosure—to new home buyers at their Sonoma Isles development in Jupiter through June 18th.

That said, my adult life’s experience in South Florida has shown me that whenever  real estate developers start discounting their prices and/or offering what’s typically costly upgrades, it’s been a sign that they’re concerned about sales.

The good news here is  anybody who can qualify and afford a new home at either of these developments has got to love getting any kind of discount or a new pool.

The bad news is  not everyone can either qualify for or afford to buy a new home these days. And even small interest rate hikes upward only exasperate that problem.

Now imagine what a number of interest rate hikes upward will do.

 

  • Market Quick Glance

LISTEN UP!!!! Two, yes, not one but two of the indices followed here scored big last week: Both the NASDAQ and the Russell 2000 hit new all-time record numbers last week. Yahoo for  them.

That’s something to crow about particularly since the rest of the investing arena is in a little bit of quandary with interest rates on the rise. As we all know, any move in any direction of interest impacts all sorts of things including equities.

Below are the weekly and 1-year index performance results for four major indices— including the dates each reached new highs—according to CNBC.com based on prices at the close of business on Friday, June 15, 2018.

DJIA 1.50% YTD ouch as that index is down again from the previous week’s return of 2.42%

  • 1 yr Rtn 14.27% big downward move from the previous week’s 19.52%

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 3.97% YTD up a hair from last week’s 3.94%.

•1 yr Rtn 14.27% up a bit from last week’s 14.19%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ 12.21% YTD a whopping big move up from last week’s 10.75%

  • 1yr Rtn 25.64% also a big up from last week’s 20.94%

Nasdaq reached a BRAND NEW ALL-TIME HIGH on June 14,2018 of 7,768.6. The previous highs was reached on March 13, 2018 of 7,637.27

 

-Russell 2000 9.66% YTD up from last week’s 8.92%

  • 1yr Rtn 19.42% up from last week’s 18.15%

The Russell 2000 reached a BRAND NEW ALL-TIME HIGH on June 12, 2018 of 1,686.37. The previous high was reached on January 24, of 1,615.52.

 

-Mutual funds

Last week’s data not available yet. Data below is from previous week:

The total return performance of the funds under the U.S. Diversified Equity Funds heading enjoyed an average return of 5.11% at the close of business on Thursday, June 7, 2018, according to Lipper. That’s up a lot from the previous week’s average total return of 2.84%.

In the big time skids this year are Latin American Funds. Of the 33 that Lipper tracks, the y-t-d average total return was underwater at -12.00%.

Other World Equity Funds that haven’t fared well so far this year was India Funds, -7.50%. And in third underwater place Emerging Markets Funds, -1.38%.

Overall, World Equity Funds are up 0.90%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  • Golden opportunities?

If you’re a believer in Morningstar data and research, the pros over at that Chicago-based firm aren’t expecting much in returns from that precious metal we call gold.

In a recent column by Kristoffer Inton, “Gold Steady in Face of Rate Hikes”, had this to write about the recent the impact of interest rates on gold: “This rate doesn’t change our view…. We continue to expect the gold price to fall to $1,225 per ounce by then end of 2018…. “

He continued:  “Additionally, although the recent rise in inflation bodes well for gold, we think that higher inflation will only spur a more rapid pace of rate hikes.”

And then there is this from a recent ETFTrends.com story: “China is the world’s largest consumer of many commodities, including precious metals.

“Tariffs on China could be a game changer for metals markets, ” George Gero, managing director at RBC Capital Markets, told the WSJ.”

The ETFTrends.com story points out that one area precious metals are making positive strides is in inverse or bearish ETFs.

If you’re a fan of gold, that’s an area worth investigating.

Sometimes down pays up.

 

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POCKETBOOK: Week ending April 7, 2018

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Lots of worries over what could happen if Trump starts a trade war. This Op-Ed cartoon is from the Sunday, April 8, 2018, Palm Beach Post.
  • Trading places

Lots of talking heads have lots of things to say about the likelihood of trade wars developing should the mighty US of A decide to let President Trump rule and impose additional tariffs on goods and services from places where tariffs already are in place.

In general, many talking heads agree that there is an imbalance in our trade agreement with China. And many think that getting into a tariff war with that country could be very disruptive and costly to us, as in the average consumer.

What’s important to remember is that no new tariffs have been imposed on any country, anywhere,  yet.

It’s also important to remember that it’s really smart to remember to pick your battles.

 

  • Market Quick Glance

Q: Dear Wise One:

Any perspective investors ought to keep in mind with respect to the markets’ recent volatility?

 
A: Yes.

Right now the stock market is as jumpy as a long-tailed cat in a room full of rockers. And that’s just how it is. Today.

Below are the weekly and 1-year index performance results for four major indices— including the dates each reached new highs—according to CNBC.com based on prices at the close of business on Friday, April 6, 2018.

 

DJIA -3.18% YTD down more than the previous week’s -2.49%

  • 1 yr Rtn 15.82% down from the previous week’s 16.28%

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 -2.59% YTD down more than last week’s -1.22%

  • 1 yr Rtn 10.48% down from last week’s 11.52%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ 0.17% YTD down from last week’s 2.32%

  • 1yr Rtn 17.62% down from last week’s 19.43%

Nasdaq reached a brand new all-time high on March 13, 2018 of 7,637.27. The previous high was reached on March 9, 2018 of 7,560.81.

 

-Russell 2000 -1.45% YTD down more than last week’s -0.40%

  • 1yr Rtn 10.91% up a tiny bit from last week’s 10.64%

The Russell 2000 reached an all-time high on January 24, of 1,615.52. The previous high was reached on January 16, 2018 of 1,604.02.

 

-Mutual funds

At the close of business on Thursday, April 4, 2018,  the average fund that falls under the broad U.S. Diversified Equity Funds heading had a year-to-date return of +0.32%. That’s up—yes up—from the previous week’s average of -0.37%.

Large-Cap Growth and Small-Cap Growth funds were up on average well over 3% last week. Science & Technology Funds and Global Science & Technology Funds both up at 4.92 and 5.08% respectively.

Latin American Funds, too, were up—averaging almost 6% y-t-d.

The biggest loser fund type of all were Energy MLP, down on average -10.02%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  • ETF returns

 I heard Jack Bogle, Vanguard’s founder, point out that mutual funds have had better returns than exchange-traded funds, ETFs, a point I found worth thinking about. Seems the big push to advertise big time by various ETF brand families is one thing. But, out performing various categories of index funds however, is another.

So, while some consider the ability to buy and sell ETFs throughout the day –as one can do with both stocks and ETFs– is appealing, it isn’t necessariy financially rewarding.

One reason  is that  Bogle thinks ETFs could encourage individuals to trade their holdings more often rather than  holding their investments  for the long term. Doing so, he said makes  it difficult for an investor/trader to outperform the market.

Good point.

Then again, Bogle loves index funds.

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POCKETBOOK: Week ending Sept. 8, 2017

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    Hurricane preparation Florida style.  (Source Bruce R. Bennett/Palm Beach Post)
  • Hurricanes and me

Hurricane David. Remember him? Deadly. Cat 5. Hit West Palm Beach, Fl. as a Cat 2. Year: 1979.

David was my first. Very scary for someone from Minnesota who knew nothing about hurricanes. Today, barely anyone remembers his name. But ask me and I’ll tell you that you always remember your first.

Back then the preparation drill was to masking tape your windows, head to the liquor store and hit Kentucky Fried Chicken for supplies and nourishment.

Today, it’s make sure you’ve got water, food and have enough meds for me and the dog.

For everyone likely to experience any hurricane, including Florida’s approaching Hurricane Irma, take care, stay calm and know, as with everything else in the universe, this too shall pass.

Some hurricane trivia: While September has historically been a not-so-hot one for the stock market, it’s been a rip-roaring one for hurricanes.

According to NOAA’s Hurricane Research Division, from 1851 through 2015 within the United States there have been a total of 107 hurricanes during the month of September. That’s makes it the #1 month for U.S. hurricanes. Second in line is August with a total of 78 followed by October with 54.

 

  • Market Quick Glance

One downer of a week for all four of the indices below in both year-to-date and 1-yr performance returns.

It would be great if there were one of those great big sponge  fingers that you could hold up and use to point to a specific incident that caused equities to close lower but the political climate has been as unpredictable and goofy as the weather. So no help there.

Bottom line: Who knows what next week will bring.

Below are the weekly and 1-year index performance results— including the dates each reached new highs— according to data from CNBC.com. Data is based on prices at the close of business for the week ending on Friday, Sept 8, 2017.

-DJIA +10.30 YTD down from last week’s 11.26%.

  • 1 yr Rtn +17.95% down from last week’s 19.37%

 

The DJIA reached its most recent all-time high on August 8, 2017 of 22,179.11

(Most recent highs include: August 4, 2017 of 22,092.81; 21,841.18 on July 28, 2017; July 14, 2017 of 21,681.53; July 3,2017 of 21,562.75; 21,535.03 on June 20, 2017; 21,391.97 reached on June 14, 2017; 21,305.35 on June 9, 2017; 21,225.04 on June 2, 2017; and 21,169.11 on March 1, 2017.)

 

-S&P 500 +9.94 % YTD down from last week’s 10.62%.

  • 1yr Rtn +12.84% down from last week’s +14.08%

The S&P 500 reached its most recent all-time high on August 8, 2017 of 2,490.87.

(Previous high of 2,484.04 was reached on July 27, 2017 and 2,477.62 was reached on July 20, 2017. Prior to that date new highs and dates include: 2,463.54 on July 14, 2017; 2453.82 on June 19,2017; 2,446.2 reached on June 9, 2017; 2,440.23 reached on June 2, 2017; 2,418.71 reached on May 25, 2017; 2,405.77 reached on May 16, 2017; 2403.87 on May 9, 2017; 2,400.98 reached on March 1, 2017.)

 

-NASDAQ +18.15% YTD down from last week’s +18.55%.

  • 1yr Rtn +23.11% down from last week’s 23.11%

The Nasdaq reached its most recent all-time high of 6,460.84 on July 27, 2017.

(Previous highs include: July 20, 2017 of 6,398.26; 6,341.7 on June 9, 2017; 6,308.76 on June 2; 6,217.34 reached on May 25; 6,170,16 on May 16; 6,133 on May 9, 2017; 6102.72 on May 2, 2017; 6074.04 on April 28, 2017; and 5,936.39 on April 5, 2017.)

 

-Russell 2000 +4.16% YTD down from from last week’s +4.16%.

  • 1yr Rtn +11.21% down from last week’s +14.02%

The Russell 2000 reached its latest all-time high on July 25, 2017 of 1,452.09.

(Previous highs include: 1,452.05 on July 21, 2017; 1,433.789 on June 9, 2017; 1,425.7 reached on April 26, 2017 and of 1,414,82 reached on March 1, 2017.)

 

-Mutual funds

The year-to-date cumulative total reinvested returns for U.S. Diversified Equity Funds closed at 8.60% on Thursday, September 7, 2017. That’s down from the previous week’s figure of 9.04%.

Sector Equity Funds have seen some top performances as Global Science/Technology Funds were up on average 32.01%. They were followed by Science & Technology Funds, up 26.90% and Commodities Base Metals Funds, up 23.85%.

Those performance figures make it a tight race for rewards when compared to World Equity Funds. Funds under that broad heading continue to climb and ended last week at 21.20%–that’s ahead of their previous week’s Thursday close of 20.41%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

  • ETFs

People love their ETFs with one group especially taking to them.

Charles Schwab & Co’s lastest ETF Investor Study revealed that investors on average have 27% of their portfolio invested in ETFs—that’s up from 16% in 2012.

As for who is buying, it’s the Millennials with 56% saying it’s their go-to investment. For Boomers, on the other hand, it’s 30%.

 

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