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Inflation and Deflation in the Markets

The third week of August, Doug will be in San Francisco for the San Francisco Money Show, and you can attend and hear his talk on ETF investing and other important investing topics. For more information on the Money Show or to buy tickets, check out their website here.

We are seeing some price inflation – in commodities like milk, meat and other agricultural products, in entertainment (movie tickets, etc.), healthcare, water and in energy prices. There is inflation in taxes and government fees. But, this is not the inflation of the 1970′s, because the Federal Reserve only calculates inflation based on wages and rent, neither of which have gone up significantly.

Also, we are seeing deflationary action in some market areas, such as: clothing, technology, fuel efficiency and natural gas. The U.S. dollar is falling once again, and we are only about 2% away from recent lows there, which would lead to more inflation.

However, even if that happens, we don’t think that interest rates will raise significantly. We believe that interest rates will remain stable because the world economy cannot handle sharply higher interest rates in the U.S.

If you have questions about investing and how inflation or deflation might affect your portfolio, please email askdoug(at)dougfabian(dot)com.

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Investing in Energy with ETFs

There are five major ways to invest in energy with Exchange Traded Funds:

  • Master Limited Partnerships (MLP)
  • Direct Commodities (such as gasoline, oil, natural gas)
  • Exploration and Production companies (E&P or “big oil”)
  • Energy Services (Companies that handle oil rigs, deep sea exploration, fracking, etc.)
  • Alternative Energy (solar, wind, fuel cells and other stocks)

ETFs give investors unique access that you can’t get with traditional mutual funds or other investing products. We are holding some of these positions, and we think that energy is a vital piece to any income or growth portfolio today. Consider using ETFs for your energy investment – they are accessible, inexpensive and flexible for all investors.

For questions about ETFs and your portfolio, email askdoug(at)dougfabian(dot)com.

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Video Update: New Newsletters from Eagle Publishing!

Click here to see the full video and hear Doug’s tips for ETF investing.

Successful Investing is now Successful ETF Investing, and the Making Money Alert is now called The Weekly ETF Report. For more information on these newsletters and to subscribe, please visit Fabian.com.

Investing in energy is easy to do with Exchange Traded Funds, and we want to encourage you to use ETFs to access energy investments. For more information on these investment ideas and others, please watch the full video here.

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Trends in the Market: Doug’s Recommendations

Here are a few of Doug’s recent recommendations for investors:

  • Dividend stocks
  • Emerging markets
  • China
  • Closed-end funds
  • Double-line funds
  • American energy
  • Bonds

Sometimes, you just need to ride the wave of current trends, and right now we think it’s important to watch these trends and invest wisely. If you have questions about how to do so and what will work for your portfolio, please email Doug at askdoug(at)dougfabian(dot)com or call our offices at 800-391-1118.

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Look at Our ETF Snapshot Today!

We have done ETF snapshots on:

  • Energy
  • International dividends
  • BRIC
  • Emerging markets
  • Multi-asset

All of these snapshots are still relevant and have great information for all investors. If you have questions about Exchange Traded Funds and you want more information, please check out our snapshot reports here.

For more information on how we can help you grow your portfolio, listen to Doug’s podcast here.

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Chris Versace on KSRO 1350, Sonoma County’s Morning News

“Melanie Morgan is an award-winning radio talk show host, author, columnist, journalist, TV anchor, and reporter. Known for her advocacy on behalf of the American military and defense of the War on Terror, and a conservative perspective, she has been a frequent guest on many cable TV shows, including Fox News, CNN and the BBC.

Melanie is the News Director and host of Sonoma County’s Morning News. Melanie has been a host on KSFO for almost 15 years.” Read more about Melanie here and KSRO here.

Listen to Melanie’s interview with Thematic Growth Portfolio manager Chris Versace:

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Video Update: The ETF Revolution

Most investors just don’t understand Exchange Traded Funds, but we think this is a crucial idea for you to consider. For the first time in history, you as an individual investor have the ability to invest in any idea, anywhere in the world through ETFs.

Commodities, international, large and small companies, specific countries, individual industries and market sectors. This is an incredible, unprecedented opportunity for investors and we think that you should seriously consider ETFs in your portfolio. If you want a full list of the ETFs available, please click here.

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ETF Snapshot: BRIC

The acronym BRIC, which stands for Brazil, Russia, India, China, came into the market’s collective conscience in 2001, and since then it’s been a powerful investment theme.

Recently, that theme has waned, and many are now are negative on the BRICs. After a decade of rapid growth induced by cheap credit, a commodity boom, and a push to globalize, many analysts feel a deceleration in BRICs is looming.

We believe that despite a recent slowdown in the rapid growth of some BRICs, there still are significant profit opportunities in the segment. Case in point is the India market, which is up about 25% year to date. Long term, we believe BRICs will continue to offer strong performance, and thus should be monitored closely. Below are several reasons that support this thesis:

  • Valuation
    As of mid-May, Brazil was trading at a P/E of 16.2, Russian had a P/E of 6.4, India had a P/E of 18.1, and China had a P/E of 9.9. Perhaps you may have missed the train on India; however, Russian and Chinese equities are still at potentially very attractive levels for value-conscious investors.
  • Technical
    The individual BRIC ETFs as well as the broad market BRIC ETFs have all enjoyed a recapture of long-term moving averages. Although the long-term averages could get tested, they now serve as support for any pullbacks.
  • Psychology
    After several months of outflows, April saw a reversal of fortune. Not only did emerging markets see inflows, the iShares MSCI Emerging Market ETF (EEM) garnered the most assets of any other ETF. While one month does not make a trend, we believe this a turn to monitor closely for follow through.

To see which funds made our top 10 list of favorite BRIC ETFs, just check out the ETF Snapshot today!

(This blog-post is for educational purposes only. For more information and for precise investing advice for your specific portfolio, call our offices at 800-391-1118.)

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Emerging Markets or Domestic Markets?

You’ve heard the old adage “sell in May and go away.” That wasn’t very good advice this year, especially if you were allocated to emerging markets. In fact, there’s been a battle raging in this market: emerging markets versus domestic markets.

So far in 2014, emerging markets, as represented by the iShares MSCI Emerging Market Index (EEM) are up about 6.2% (as of June 2) while the domestic markets, as represented by the SPDR S&P 500 Index (SPY), are up 5.5%. That’s not a very big difference, but when you look at the action in the last three months the fight moves decidedly in favor of emerging markets.

In the three months that ended June 2, EEM was up more than 10% while SPY managed a gain of just slightly more than 4%. That’s an outperformance of nearly 150% in just about 12 weeks. The relative outperformance in emerging markets is one of our main investment themes, and it’s one that argues that there is more upside potential in emerging markets than there is here at home.

As you can see by the table below, the top-performing exchange-traded funds (ETFs) during May (excluding leveraged funds) were in the emerging markets.

Ticker   Name                                                    Return      Assets (millions)
SCIN     India Small Cap ETF                                 23.53%           20.40
SCIF      India Small-Cap Index ETF                       23.12%         110.35
INXX      India Infrastructure ETF                           22.72%           16.50
SMIN      MSCI India Small Cap Index Fund            18.83%             5.37
RSXJ      Market Vectors Russia Small-Cap ETF       15.08%           16.19
ERUS     iShares MSCI Russia Capped ETF              13.53%         388.08
RBL       SPDR S&P Russia ETF                               12.88%           33.36
RSX       Market Vectors Russia ETF                        12.61%      1,187.90
EPI        India Earnings Fund                                  11.87%      1,022.03
INCO     India Consumer ETF                                 11.13%             4.47

The rise of markets such as India, and the formerly beaten-down Russia, shows the power of emerging markets—power that savvy investors need to consider putting on their side as we quickly approach the latter half of 2014.

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Doug Fabian’s ETF Trading Tips

Here’s a couple of trading tips from Doug, that might be helpful for you as you trade ETFs and grow your portfolio.

  • Many mutual fund investors assume that they will get the same price on ETFs no matter what time of day they buy or sell – but this is not true for Exchange Traded Funds. ETFs fluctuate in price with the market, and so timing is an important thing to pay attention to. We suggest that you avoid buying or selling ETFs when the market is closed.
  • Also, do not buy as soon as the market opens, or in the first hour of trading. This is rarely a good idea for advantageous pricing on ETFs, and is often called the “amateur hour”.
  • Always use a reasonable limit-order for your ETFs. This enables you to get a better price and stay on top of the market as an individual investor.

(For more details on this topic, listen to our full broadcast here.)

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