exchange traded fund
Written by Dani, May 02nd, 2012
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.
Written by Dani, April 26th, 2012
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.
Written by David, February 08th, 2012
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.
Written by David, April 28th, 2010
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.
Written by David, January 25th, 2010
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.
Click here to download this free special report as a PDF.
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.
Sincerely,
Doug Fabian
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.
Written by David, January 20th, 2010
With the energy sector exhibiting a second-straight year of weakened demand, the situation could be appealing to investors who may be willing to short utilities in a search for quick profits. Exchange-traded funds (ETFs), such as ProShares UltraShort Utilities (SPD), are available to allow aggressive investors to bet on a retreat in utility stocks. The question is when to pull the trigger on such a trade, since utilities still seem to be aided by the stock market’s general upward trend.
ProShares UltraShort Utilities is a leveraged ETF that seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Utilities Index.
Indeed, U.S. electricity output fell 3.7% last year to mark its biggest drop since 1938, according to federal statistics. That decline in output comes on the heels of close to a 1% production dip in 2008. Reduced U.S. energy production does not appear to be a fluke. The downward trend in demand and production for energy are attributed to a slow economy, conservation efforts and, at least last year, a relatively mild summer in many parts of the United States. As a result, forecasting demand and revenues is becoming increasingly challenging. Without a clear sign that energy demand will be rebounding, it makes it difficult for utilities and the analysts who follow them to make accurate projections.
The question for investors is whether the energy sector is on the verge of giving up some of the gains that it collected since the market began advancing last March. I currently am not recommending shorting energy stocks; however, a case certainly can be made for doing so.
If you needed to pick the industries that are most vulnerable to a retreat, utilities probably should be on your list. Of course, it does not mean investing in a leveraged short fund will help you to turn quick profits right away. You may want to wait and watch the sector in the coming weeks before deciding whether shorting utilities with a leveraged fund is something that you want to try.
Written by David, June 10th, 2009
I am constantly being bombarded with questions about exchange-traded funds (ETFs). Basic inquiries such as just what ETFs are, how they work and how they can be used in an investment portfolio are some of the most common I deal with each week.
Now because I want to be sure that you know all of the basics about these fabulous investment vehicles, I’ve decided to do a short video presentation explaining exactly how ETFs work, their history, and how they can be a huge benefit to your portfolio.
I believe that ETFs are the greatest wealth-building tools for your portfolio because of their diversity, low cost and transparency, and you owe it to yourself to make sure you know just how great ETFs can be.
To find out more about ETFs, and to watch my presentation, click here.
Written by David, April 09th, 2009
Millions of people have seen their 401(k)s, IRAs and stock market portfolios hammered by the current bear market. As the S&P 500 and the Dow slid further and further last year, many investors flocked to so-called bear market funds. The general philosophy behind bear market funds is to take advantage of market slumps by investing in positions that go up when the market goes down.
Bear market funds use various strategies to profit, although the chosen method usually is through short positions. Certain exchange-traded funds (ETFs) now are beginning to use derivatives and options to replicate the inverse of market indexes instead of simply shorting them.
In 2008, several bear market funds — shorting all kinds of stock exchanges — performed well. They rose while the global markets slumped. However, history shows that bear market funds have been long-term laggards. While bear market funds are not permanent fixtures in most portfolios, since the stock market tends to rise over time — they are a great way to seek short-term gains in a sagging market.
Depending on the ETF you choose, for every 1% dip in the market, you can turn a profit of 1%, or even 2% if you use a leveraged position. Now, let me introduce you to a handful of bear market funds.
The ProShares Short S&P 500 (SH), which shorts the S&P 500, was up 39.21% last year. More aggressive investors bought the twice-leveraged UltraShort S&P 500 ProShares (SDS), which returned 61.36% in 2008.
For investors interested in international bear market funds, ProShares Short MSCI EAFE (EFZ) shorts European, Australasian and Far Eastern markets. This ETF had a one-year return of 38.90%. Risk-taking investors may be interested in the twice leveraged ProShares UltraShort MSCI EAFE (EFU), which had a 51.92% one-year return.
While bear market funds are a great way to profit during market slumps, beware of bear market rallies such as the one we’ve had recently. SH and EFZ both are down more than 20% since the rally started on March 9. As leveraged funds, SDS and EFU each dropped nearly 40% in the last month.
The market’s extreme volatility and uncertainty during the last month leaves an open question about how to play the rally. For those investors who think the rally will extend further into the year, a long position might be a good idea. Investors who think that the rally is going to fizzle may decide that a short position is best.
Written by David, March 31st, 2009
Today’s stock market beast is not the same animal it was a decade ago. In fact, the pace of change has been relentless in recent years, and even the most conscientious individual investor has had a tough time keeping up with the all of the financial market upheaval.
If you’re managing your own money, are you getting the results you think you should?
Or, is your money being managed by a stockbroker or investment advisor who insists
you “buy and hold” stocks even while Wall Street—and your portfolio—get savaged by
a malicious bear?
Now more than ever, individual investors need expert guidance and continuous “eyes
on” monitoring of all of their positions, not just occasionally, but every trading day. The
simple fact is that in today’s market environment, you’ve got to have an experienced
ally on your team if you want to successfully navigate these treacherous market seas.
At Fabian Wealth Strategies, we believe that innovation is at the forefront of each
client’s success.
Click here to learn more about how Fabian Wealth Strategies can help you manage your assets according to your goals in a simpler, easier and more cost-efficient way than ever before.
Written by David, February 04th, 2009
It’s no secret that most 401(k)-type retirement plans are in shambles as a result of the recent market meltdown. And while there is no simple, quick-fix solution for an ailing 401(k), 403(b) or 457 plan, if you have the ability to self-direct your retirement assets there is a way to put yourself on the road to recovery.
Here are the dos and don’ts of turning around that big drop in your retirement nest egg.
First of all, you have to fight “city hall.” All 401(k) providers want you to buy your investment and hold them in perpetuity. I don’t care where your 401(k) is, the mutual fund companies want you to choose a mix of funds and then just leave that mix alone. They have placed rules and restriction on you, and in many cases they make it hard for you to do what you want with your own money. Your first assignment is to know the rules of your 401(k) plan’s fund exchange policies. Hey, it’s your money, so don’t let anyone talk you out of doing what you want with it.
Second, you need to know your retirement plan fund choices. Usually, these choices fall into three categories; stocks, fixed income or cash. Look closely at your safe choices in the cash category; this could be labeled “stable value” or “money market.” As I have been saying for the last year, you need to use this account as your safe harbor in these uncertain times. I’d say you need at least a 50% safe harbor allocation right now.
In the fixed income category, there are some choices that I like. One popular fund is the PIMCO Total Return Fund, a balanced bond fund that posted a total return of 4.2% in 2008. I think you should stay away from those fixed income funds that went down in 2008.
Third, you need to get out of stock mutual funds. I realize that some of you may want to hold on to some of your exposure to stocks, but for me and subscribers to my newsletter services, we have zero exposure to equity mutual funds right now. Ideally, if the S&P 500 can recapture 900, we could make a run to 950. If this happens, then it will represent the best opportunity for those still in equity mutual funds to sell into strength.
Fourth, are you able to get some money out of your 401(k) plan? Here’s what I mean by that. Traditionally, 401(k)’s are very restrictive. Their very design means you have limited choices and more trading restrictions than you would otherwise have in a self-directed IRA. If you are able to, you should transfer assets out of you 401(k). You can do this if you are over age 59 ½, as you may be able to do what’s called an in-service rollover. This is when you transfer all or part of your 401(k) to an IRA rollover account. And while this is perfectly legal, your plan must allow for it.
Also, if you have a 401(k) at a previous employer you should roll that account into an IRA. This will give you the ability to buy and sell exchange-traded funds (ETFs), which come at lower cost than mutual funds—along with virtually no trading restrictions and with the utmost transparency, so you know always know what you own.
Finally, I know what I am outlining here runs counter to establishment thinking, but ask yourself this: are you happy with the results you had in your 401(k) last year? I dare say that that the answer for most people is no, and that means it could be time for some radical change.
Remember that success in anything doesn’t come without a little effort, and real success almost never comes about by following the conventional wisdom. In order to rescue your 401(k), you simply have to get involved and start thinking for yourself.
