We like to pick growth Exchange Traded Funds that are tied to some long-term cyclical positives around the world. We think that the following ETFs are either good investments or good ticker symbols to put on your watch list as you manage your portfolio.
Here are our five favorite ETFs for growth:
FRAK – small, focused on natural gas infrastructure
PBW – clean energy
VEGI – global food companies
DXJ – Japanese stocks
EEMV – conservative stocks in the emerging markets
As always, if you have questions about the state of your portfolio, how to use ETFs or market action, email questions or concerns to askdoug(at)dougfabian(dot)com.
This is a podcast summary. For more information, please listen to the entire broadcast here.
The stock market is soaring, and there’s what we call a “feeding frenzy” – an emotional free-for-all amongst investors in the market this week. Just remember that markets are emotional, and you are much better off investing when everyone is in a panic than when everyone is feeling good. Don’t worry about being left behind, better opportunities for your money are still to come.
Tuesday was the 20th anniversary of the Exchange Traded Fund! Now it is an institution on Wall Street, and we encourage you to check out our full ETF report.
This is a recap of our recent (Tuesday, January 15, 2013) teleconference titled: Opportunities and Risks for Investors in 2013. If you missed the presentation, we encourage you to listen to the audio recording and download the handout, as well as read this blog for more information.
The purpose of this teleseminar is to help you with a thoughtful investment process. This is for general information and education, not personal investment advice.
Investor psychology – setting up for success in 2013
Don’t let news and fear dictate your investments. When opportunities come, be prepared to act, don’t wait. Many people are worried about their money, and they delay investment decisions because of this. There are trillions of dollars sitting on the sideline because of this. Worry is a negative emotion – nothing positive comes from it. Worry can cause bad decisions.
These are our four themes for 2013 (and the charts for them, below):
Global economy (agricultural commodities will be important because of an increasingly global economy and rising international middle class)
Precious metals. Money printing by central banks is a reason to own gold. Gold doesn’t need inflation to move higher, and will present opportunities.
(Click on any chart to enlarge)
Opportunities for growth
Download our ETF report here. See all of our available ETFs, categorized by type and themes. We think that ETFs are the easiest way to invest in these sectors.
Asia: China and Japan have both been under performing for many years, but may be emerging into a new bull market soon. Japan has significantly lowered their currency value via their central bank, which is good for their exports and equities. We believe that Asia will present some very nice opportunities in the year to come. Ticker symbols to watch: FXI, HAO, FCA, EWJ, SJC
Agriculture: If you were looking for a country that has the best, most productive agriculture abilities, you would look at the U.S. The U.S. has abundant farmland, water, and technology. Businesses are way ahead of commodities, so commodities are a better short-term opportunity, but businesses could be a great opportunity later in the year as well. Ticker symbols to watch: DBA, RJA, CORN, SOYB, CANE, WHET, MOO, PAGG, CROP
Precious Metals: We know that there is strong support for gold, because every time it gets down to $1500, people buy it. It can certainly fall below that, but it wouldn’t surprise us if it did test that support by falling briefly below $1500, then shooting straight up. Central bank and money printing make gold attractive for many people. Ticker symbols to watch: GLD, IAU, SLV, GDX, GDXJ, SIL
Energy: There are huge natural gas reserves here in the U.S., which is a good thing. Energy companies and master limited partnerships are not currently at a good price point, but this is a great sector to be watching for corrections and opportunities. Ticker symbols to watch: AMLP, IEZ, XOP, FRAK
Dividend Equities: Companies that are paying dividends are on very solid footing, have been around a long time, which makes them a good investment. Dividends are still taxed at a favorable rate for most Americans. We think it needs a sharp correction to really be a good value for investors, but keep an eye on it. Ticker symbols to watch: DDY, SPLV, XLU, IYR, DEM
(Click on any chart to enlarge)
Opportunities for income
We think that there are still a lot of reasons to own bonds around the world. We think that bonds are still a good investment and we are not concerned about a bond bubble right now.
Star Bond Fund Managers: Such as Vanguard, PIMCO, Double Line Funds, Really like using these top fund managers. They know what they’re doing and are performing very well for investors. Ticker symbols to watch: DLTNX, BOND
Short Term Bonds: Don’t have huge yields, but can be a good solution. These are easy to use and great for high-cash or income portfolios. Great for holding money short-term while you wait for opportunities.
Municipal Bonds: Cuts or shutdowns with debt ceiling could give buying opportunity for municipal bonds. If you have a lot of income right now and want good tax-free income, this is especially good to keep on your watch list.
Emerging Markets: Bonds of emerging market countries and companies are great opportunities for this next year. Remember that this is not necessarily an option today, because we’d like to see correction before buying, but a great sector to watch.
Dividend Equities: Telecommunications, utilities, etc. Nice yields right now, and might present us with opportunities as the year continues, but again, not today. Good to watch and on your buy list when you see weakness in the market.
Risks for investors in 2013
Today, we purposefully decided to talk about risks after we discussed opportunities. You need to stay positive and think opportunity first, so that you are ready for it. Manage risk, but don’t be a slave to it. Don’t obsess about politics and their outcomes, we aren’t in charge and we’re just going to have to watch and see what happens. Remember that the following risks are not predictions, just possibilities.
U.S. – higher taxes, slowing economy, recession
European sovereign debt crisis
Strategies to manage risk:
Asset allocation – know where your investments are and how much risk you have
Sell discipline – have a goal and a designated sell point
Entry point – buy wisely and watch for opportunities, not worry
Put volatility to work for you!
Vigilance in monitoring – know what you have and why, and have a watch list
Finally, let’s make an action plan:
Have a written goal for your investments – income or growth – whatever you decide on is valid, but you have to write it down and create a plan to make it happen
Invest based on what you and your family needs
Take inventory of your allocations and overall portfolio – decide what to do about risk and how to plan for this year.
Reallocate – look at some starter positions and some new ideas – maybe some of the ideas we discussed today.
Prepare for corrections, opportunities and sell points
As a thank you for participating in our seminar we would like to offer you a free consultation to discuss your portfolio and strategies to achieve your financial goals. This includes an in-depth analysis of all the holdings in your portfolio. We will share with you the unique strategies we are using for our clients right now and how active portfolio management can be of benefit to you.
This offer is available for goal-oriented investors with more than $250,000 in their investment portfolios. Contact us for a brief introduction and to schedule an appointment to review your accounts.
To schedule your free Portfolio Assessment, call us at 800-391-1118.
We’ve been asked to outline our top three favorite Exchange Traded Funds for investing in 2013. Over the next couple of weeks we’ll give you all three, and today we’ll talk about the first one: FXI.
FXI is an ETF made up of the China 25 ETF. It’s made up of the top 25 companies in China, and we picked FXI because the Chinese stock market has been underperforming for the last two years, and is likely to present some great investment opportunities soon.
If you’d like to find out about the opportunities, and perhaps more importantly, the risks you are likely to confront in the year ahead, then we invite you to join us this coming Tuesday, January 15, at 1:00 p.m. Pacific Standard Time, for our first live teleconference of 2013.
This teleconference, aptly titled, “Opportunities and Risks for Investors in 2013,” will give you our latest outlook on the equity markets as we embark on another year of uncertainty, and unknowns. Register here.
What do you want to hear? We have received 20 or so emails so far, and we would love to get more. We want to improve, to be helpful to you and your portfolio, and to answer your needs through our podcast and blog. If you have questions, comments or suggestions, please send them to askdoug(at)dougfabian(dot)com, and let us know what you think!
We also wanted to highlight some of the feedback we’ve already gotten. One thing that we keep hearing is this:
People want to hear more about ETFs. It seems obvious that our readers and listeners want us to talk about exchange traded funds, explain what they are and how they work, and so we will endeavor to do a better job of that as we continue in our podcast and blog efforts. We will also continue to share watch lists and advice, but, despite the requests, we are not going to give specific buy and sell lists here on the blog or the podcast, as that would not be fair to our paid subscribers. However, if you’d like to sign up for one of our paid services, check our newsletters out here, or give our offices a call and talk to one of our advisers at 888-300-3684
Another concern we heard a lot of was this:
Many people feel that we have been too political on the blog and podcast. We’d like to explain why – because politics affects your investments. We think that the level of deficit spending in Washington is worrisome, and that it is the fault of both political parties. We think it’s obvious that government spending and entitlement spending are out of control, and that politicians in general have not been honest with the American people.
For every dollar that we spend at the federal level, we are borrowing 46 cents of that dollar, which is a dangerous path that could easily be the end of our country as we know it. As a nation, we need to get our act together and our financial house in order. Unfortunately, that’s just a reality of the times we live in – we know it’s not always fun to talk about, but we will do our best to give nonpartisan, common sense analysis, and we’ll continue to talk about it, because it will impact your financial life.
Again, please send us your thoughts, comments, questions and suggestions to askdoug(at)dougfabian(dot)com. We are looking forward to hearing from you and continuing to improve our blog and podcast.
This is a podcast summary. For more complete details, listen to our full podcast here, and don’t forget to pass this blog on to other friends and investors who might benefit from our perspective. Plus, if you haven’t already, please take some time this week to check out our recent teleseminar for in-depth information on post-election investing and our outlook on the markets.
As many of you know, we have a comprehensive list of ETFs on our website. Our latest edition of the Fabian ETF report recently came out, summarizing 1200 funds and highlighting 100 new ETFs for 2012. To get a copy of our ETF report, click here.
Another great way to hear our strategies is through our exclusive teleseminars. Our next teleseminar is titled: Strategies for Growth in Uncertain Times, and will be presented by Doug Fabian, on Tuesday May 8th at 1:00 p.m. Pacific (4:00 p.m. Eastern).
If there is one statement we can all agree with – we are living in uncertain economic times. Half of the countries in Europe are in recession, China is feeling the effects of slowing global growth, and the U.S. is struggling with trillion dollar deficits that are needed to keep the economy afloat.
In what will likely be a very challenging summer for the markets, having the right strategies in place to both preserve and grow your capital is absolutely critical to your investment success. Now is the perfect time to decide how you should position your investment dollars to achieve your financial goals for the remainder of 2012.
In this special one-hour presentation, you will learn:
Doug’s three favorite growth strategies over the next three years.
How to stay ahead of inflation with your portfolio.
A global economic update and how world events can impact your money.
The latest product innovation in the exchanged traded fund world.
Plus much, much more
While this teleconference is FREE, attendance is limited, so please be sure to register HERE and reserve your spot today.
We expect to invest in emerging markets this year, and want our audience to be aware of changes and trends in this area. Over the last 10 years, here’s what’s happened in emerging markets:
2003 ended the bear market and began a new bull market in the U.S. – 400% increase in emerging markets that year.
2007-2009 emerging markets fell 65%
2009-2011 emerging markets moved up 135%
There are over 100 Exchange Traded Funds for the emerging markets. You can invest broadly or even focus on a single country or industry group using ETFs. We think this is incredible, as it gives investors a chance to invest in as specialized of an area as they like.
While established markets like the U.S. and UK have had centuries of equity investing, the emerging markets are relatively new, and have much greater earning potential than developed markets. We believe that emerging markets offer great potential, and that this is an area that you need have in your portfolio long-term.
This year we plan to invest in emerging markets, but our approach holds that we do not want to buy until the rest of the market starts to panic. When that happens, emerging markets will go on “sale”, and we think that is the best time for investors to jump at this opportunity. If you have questions about when to invest and why, please call us at 800-391-1118.
Thanks for reading our podcast summary. If you want more details on what is discussed on the blog, please listen to the full podcast here.
After the precipitous fall of the emerging markets during the second half of last year, many exchange-traded funds (ETFs) devoted to those countries are coming back twice as fast. India, in particular, is one of the best-performing stock markets in the world so far this year. What also has helped boost prices in India has been an appreciating Indian rupee. The rise of the rupee specifically has fueled the returns of Indian ETFs. For example, WisdomTree India Earnings Fund (EPI) is one of the top-performing ETFs in this country category.
The fund seeks investment results that correspond to the price and yield performance, before fees and expenses, of the WisdomTree India Earnings Index. EPI is the first ETF I have found that invests exclusively in India, one of the world’s fastest-growing economies.
Within this ETF, the financial services sector makes up nearly 25.99% of its holdings. Banking continues to be one of the top growth sectors in India, since many of the people there still do not use banks. As India’s economy continues to expand and its middle class grows, more people will be using banks for the first time. As a result, banking has been a boom sector of late and there still is room to grow. It is clear that India, the home of the most Bengal Tigers in the world, is showing strength so far in 2012 that is worthy of the big cat.
As investors from around the world are watching returns from the developed economies diminish, they are looking toward developing markets such as India. The Indian market can be extremely volatile, though, since it depends heavily on foreign investor interest. So, weigh your potential risks before investing. The large run up in equities to start 2012 is a good reason to consider waiting for a pullback before adding ETFs like EPI to your portfolio.
Airlines and their related exchange-traded funds (ETFs) recently got a boost, as they hit 52-week highs, given lift by the broader market rally. The recent Icelandic volcano eruption kept European flights grounded for a number of major carriers and caused the share prices of those companies to dip. The question is whether airline stocks will continue to fall or whether they might be ready to rise again.
Keep in mind that when the 50-day and 200-day moving averages that I track fall well below current equity prices, stocks typically pull back – just as they did yesterday when the Dow Jones Industrial Average closed at its lowest level since April 7. However, such market retreats offer a chance to profit if you make the right trades.
If you think airlines will recover from the recent market turbulence and fly to new heights, the Claymore/NYSE Arca Airline ETF (FAA) may be the right fund for you. The FAA ETF is designed to mirror the performance of the NYSE Arca Global Airline Index, which tracks the largest and most liquid common stocks and American Depository Receipts (ADRs) of airline companies that are traded on the exchanges in developed markets. The index holds shares in 25 companies from 14 countries, with market capitalizations ranging from $750 million to more than $9 billion.
News of a merger between United (UAUA), Continental (CAL) and U.S. Airways (LCC) has helped fuel anticipation that FAA could be on its way up. Even a merger between United and Continental on their own could mean upside, if the airlines consolidate resources to boost revenues and margins.
I am not currently recommending FAA, but I am watching it closely for key technical signs that could cause me to book a flight on this airline ETF.
Most investors sustained serious damage to their wealth in 2008 – damage that, in many cases, will be difficult to recover from. Certainly Wall Street titans, reckless lenders and irresponsible home buyers all deserve their share of the blame.
But one part of the financial world has not received much scrutiny for its role in the evaporation of investor wealth, and that is the mutual fund industry.
Mutual funds control the majority of Americans’ retirement assets through 401(k)s, IRAs and annuities. Sadly, a gullible public has bought into the idea that steady investments in mutual funds, regardless of market conditions, is the way to make their financial dreams come true. This is one of the biggest fallacies of investing, and why mutual funds are hazardous to your wealth.
In my latest special report entitled, Mutual Funds are Hazardous To Your Wealth, I expose the five serious flaws of these investment vehicles and talk about how exchange traded funds are a far superior alternative.
Why? Because ETFs are less expensive to own than mutual funds and more diversified than individual stocks. For most people looking to grow their serious money over the long term, ETFs are quite simply the best investment vehicles available today.
As a bonus to this report I would like to offer you a free Mutual Fund Assessment – this includes an in-depth review of your investment goals and analysis of all the funds in your portfolio.
This offer is available for goal-oriented investors with more than $250,000 in their investment portfolios. Contact us for a brief introduction and to schedule a phone call time with you to get some help.
To schedule your free Portfolio Review, call us at 800-391-1118.
President, Fabian Wealth Strategies &
Host, Doug Fabian’s Wealth Strategies Radio Show
Note: Fabian Wealth Strategies, Inc. is a registered investment advisor with the U.S. Securities and Exchange Commission. Doug Fabian is a registered investment advisor representative. The information expressed by Fabian Wealth Strategies is for informational purposes only and should not be construed as a recommendation to buy, sell, or hold any specific security.