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Gary Gordon

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  • ETFs For Those Seeking Greater Tax Freedom [View article]

    Thank you... you are correct about my mistake for the taxable equivalent yield for the 35% tax bracket. I had been hastily looking at numbers... and yes, for TFI with a 2.4% yield, the taxable equivalent is 4.0% annual, irrespective of cap app. It is not 6.9%, and I will remedy that in the article.


    Apr 15, 2014. 12:39 PM | Likes Like |Link to Comment
  • Great Rotation? ETFs Encounter A Different Kind Of Shift In 2014 [View article]

    This year, last year, and throughout 2013, you will find commentary where I extol the virtues of "pharma." Indeed, for the past several years, I have over-weighted the sub-sector.

    Below are several articles from 2013 alone:


    One of the primary reasons for the over-weighting of pharma/healthcare has been the less volatile drawdown. However, PJP has since become more volatile. The fund hit pre-determined stop-limits, experienced wider-than-normal daily trading ranges, and breached key trendlines in March and April.

    In essence, I do not buy-n-hold for my clients... not ever! If I need to take a large gain, a small gain or a small loss on an asset class or an individual asset to eliminate the possibility of a big loss, that's what I do to reduce risk.

    I still hold Tech Dividend (TDIV) and Healthcare (XLV) at this moment in time, though I have sold Pharma (PJP) in most, if not at all, client accounts. To learn more about how I manage ETF assets, you can read more at the Pacific Park Financial, Inc. web site:
    Apr 9, 2014. 06:31 PM | Likes Like |Link to Comment
  • Portfolio Greatness: Bill Miller's Advice On How To Make Money In This Market [View article]
    It is intriguing to see what Bill is up to these days. Yet is there "value" in Bill Miller's picks up-and-above sensible indexing?

    From June of 2007 to March of 2009, Bill Miller’s Legg Mason Value (LMVTX) plummeted 73%. Bear market math shows that while S&P 500 index funds fell roughly 55% in the same time period, requiring 122% to get back to even, the 73% decimation of LMVTX required 270% to recover. Naturally, the fund has changed managers/names so that the historical track record no longer applies.

    Bill Miller had an unprecedented run prior to 2007. That truth cannot be denied. Yet Bill's deep discount approach ignored insuring against disaster and, ultimately, ended in disaster. Unfortunately for Legg Mason Value believers, the fund underperformed its Large-Cap Value Lipper Average over 1, 3, 5, 10 and 15 years.
    Mar 28, 2014. 04:28 PM | 3 Likes Like |Link to Comment
  • 3 Reasons Top Earners Should Favor High-Yield Muni ETFs [View article]
    Kapusta Kid,

    I am not sure how you come to an across-the-board conclusion on what top earners invest in. I am a top earner. I represent retirees and those who are still working, and the latter are most definitely top earners. And with $125M in AUM coupled with a quarter century in financial services, I do not restrict myself to individual issues; rather, I readily purchase held-to-maturity bond ETFs and highly liquid bond ETFs on behalf of my clients.

    A diversified vehicle that is easily converted to cash is highly desirable to top earners. Trying to purchase 50 individual issues to achieve diversification is rarely as successful as indexing, not to mention the poor liquidity of some of those individual muni bonds.

    Individual, hybrid (ETF), fund -- each has advantages and disadvantages. You may want to check your assumptions.

    Regarding your desire to become a top earner, wishing won't make it so. Motivation, skill and hard work will.

    Mar 26, 2014. 01:01 PM | 2 Likes Like |Link to Comment
  • U.S. Stock ETFs Completely Decouple From U.S. Economic Concerns [View article]
    >>Ok you like to put your clients in XLY, XRT, XLB, ITA, USMV,
    >>and SCZ? I think I got it right this time.

    No, you have it wrong again. I have some of my clients and some of our assets allocated to Health Care (XLV), Aerospace/Defense (, Minimum Volatility ( and Small Cap EAFE ( I do NOT own Consumer Discretionary ( or Retail ( or Materials (

    >>You have your clients is beta style investments with low yields.

    You have read one article... I have written 1000s. You have mistakenly determined that four positions constitute the entirety of every portfolio in 100s of managed portfolios. We have tailored portfolios that typically host 14-16 positions that target both "alpha" and "beta" for optimal diversification (non-correlation) where possible. Equally important, we do not buy-n-hold every asset. Yield matters, except when it doesn't... like when yield chasers experienced 2013's taper tantrum.

    In fairness, it is silly to presume that you can determine the value that a particular adviser provides to his/her clients. For one thing, you do not appear to have an appreciation for insuring against big losses. Again, there are those who understand the value of losing less when markets are getting killed, including, but not limited to, the financial well-being and the emotional peace of mind. For another, our clients have the ability to speak with us about everything that touches their money, from retirement to estate to taxation to business formation.

    I believe strongly that investors with time/desire/emotional fortitude/and financial know-how should invest for themselves. They have low cost indexes and liquidity via ETFs to achieve goals on their own. I have taught financial concepts around the world and believe many can DIY successfully.

    Yet not everyone understands how to reduce risk with mechanical, unemotional tools. Not everyone has the time or desire to insure their financial success by protecting against the big loss. I represent many exceptional minds -- CEOs, executives, doctors, educators -- who may not have the wherewithal to dedicate themselves to their finances.

    Apparently, you believe success comes down to picking winners on the upside. Respectfully, I disagree. The upside pretty much takes care of itself. Risk-adjusted, no mutual fund manager has ever beaten the S&P 500 for 15 years and tens of thousands have tried. There was Bill Miller... though you may want to read about what happens to one's dollars if he/she loses 70%+ in a single year.

    Those who have chosen our registered investment adviser know that we will achieve plenty of the upside, but that, primarily, our value is the ability to protect folks against devastation. We seek to insure investment success. Investment success is about avoiding the big loss... it is insurance... it is staying out of the water hazard. Clients and non-clients alike have benefited from my quarter century of work in this capacity.

    Mar 7, 2014. 05:50 PM | 1 Like Like |Link to Comment
  • U.S. Stock ETFs Completely Decouple From U.S. Economic Concerns [View article]

    You seem really upset. When one gets upset, he is likely to make many mistakes about another's point of view.

    For example, you have written that the author is in basic materials (XLB), Retail ( and Consumer Discretionary ( That is entirely incorrect. My clients and I hold positions in the non-cyclical assets with less rate sensitivity, such as XLV and ITA. I also mentioned that we "own" less volatility via USMV as well as fundamental value in SCZ.

    The fact that investors currently have little fear of economic uncertainty does not mean that I implied that the sky is falling, nor did I indicate that I would "short stocks" or "run for the hills" during this remarkable uptrend.

    What it does mean is that -- as a CFP who is the president of a registered investment adviser -- I have a fiduciary responsibility to place the interest of 200 families ahead of my own. I have been using ETFs for decades, long before they were wildly popular. I employ stop-limit orders and trendlines on most of these ETFs to minimize huge losses. This is the way in which I helped others reduce the financial and psychological hardships associated with 2000-2002 as well as 2008-2009.

    I realize that you're not aware that I was one of the first professionals to talk about ETFs in the late 90s as the CFP on a national talk radio program. You may prefer to "buy-n-hold" mutual funds or ETFs. However, ETF popularity is due to liquidity. Money managers like myself will indeed take measures to reduce risk when trendlines break and stop orders hit; we recognize the mathematical impact on portfolios when one suffers big losses as well as the psychology of what a wannabe buy-n-holder actually does at the tail end of a panic.

    These truths have nothing to do with doom and gloom. One does not expect to crash his car when he drives to work; he does not expect his home to be destroyed by a fire or to find out he has a cancerous tumor. Yet we plan for these things by purchasing insurance and by placing important documents in safes/ lock-boxes. We plan ahead.

    It follows that, for those who have a different opinion than you do, we stand ready to protect against the extremely adverse effects of 1929, 1930-1932, 1937-1938, 1939-1942, 1946-1947, 1961-1962, 1968-1970, 1973-1974, 1981-82, 1987, 1990, 2000-0002, 2007-09, 2011, next bear. That's not doom-n-gloom. We are investing. We just know that insuring against disaster is financially rewarding.

    Mar 7, 2014. 02:40 PM | 1 Like Like |Link to Comment
  • 3 Lesser-Known ETFs For An Escalating Ukraine Conflict [View article]

    My preference as well... which is why I wrote:

    "Granted, a money manager like myself cannot necessarily use a fund with limited liquidity such as the lesser-known XAR."

    Indeed, ITA has been in many of my client portfolios. Liquidity matters for those who do not buy-n-hold. Nevertheless, it is still worth noting that XAR has outperformed ITA over 1 month, 3 months, 6 months and 1 year.
    Mar 4, 2014. 10:52 AM | Likes Like |Link to Comment
  • 5 ETF Indicators Battle The Risk-On Herd [View article] the chart is in the article above. The 50-day SMA for Vanguard Long Term Bond (BLV) crossed above its 200-day SMA. (See the chart in the article.)
    Feb 26, 2014. 04:19 PM | Likes Like |Link to Comment
  • China ETF Bashers Cannot See The Forest For The Trees [View article]

    There are a wide variety of ETFs purporting to represent China exposure. Depending on the one that you use, the long-term trend (200-day) may be favorable for a trend-follower.

    Here is a short list of China ETFs where the slope of the 200-day is positive and the current price is above the 200-day: (1) GXC, (2) HAO, (3) PGJ, (4) CHIQ, (4) CQQQ, (5) YAO, (6) CQQQ, (7) ECNS.

    Keep in mind, I am not recommending that investors buy one or more of these ETFs. I wrote commentary that questioned the pervasive negativity on China, and suggested that investors keep an open mind going forward. That means, one should continue to track a wide variety of technical and fundamental indicators involving China ETFs.

    Feb 20, 2014. 01:50 PM | Likes Like |Link to Comment
  • 3 Ways An ETF Investor Can Approach The Increasingly Erratic Stock Market [View article]

    You are absolutely correct on the way in which insurance works... and I am okay with it. I am glad to hear that you are getting better with the psychological aspect of taking small losses to avoid the possibility of a huge hit. I am even happier to learn that your portfolio is working better for you!


    Feb 6, 2014. 02:24 PM | Likes Like |Link to Comment
  • 3 Ways An ETF Investor Can Approach The Increasingly Erratic Stock Market [View article]


    Keep in mind, I primarily manage assets as the president of a Registered Investment Adviser with the SEC. That said, I did offer a subscription-based e-letter in 2010. People loved it... but with only 200 subscribers... it was not financially viable. I would have continued if 1000 subs had joined in year 1.

    In any event, I am glad that you enjoy reading my commentary!


    Feb 6, 2014. 02:20 PM | Likes Like |Link to Comment
  • Telecom, Utilities ETFs Ride The 'Risk-Off' Train Alongside Lower Interest Rates [View article]

    It was an end-of-the-year (2014) forecast, but yes... thank you for recognizing my commentary on deflationary scares and the possibility of lower rates.

    Jan 29, 2014. 04:20 PM | Likes Like |Link to Comment
  • ETFs Let You Invest With Your Head, Rather Than Your Heart [View article]

    Naturally, a variety of ETFs hit stop-loss limits and broke below 200-day moving averages circa the first week of August 2011, leaving 35%-50% in cash in most client portfolios. The heightened volatility led to higher-than-usual cash levels for roughly two months. Circa mid-October, depending on the risk of the client, dollars moved back into income producers and/or wish-list domestic equity ETFs.

    You can see this at many of my articles from Oct 2011:

    As the article above shows, EWM was essentially flat from the time I sold to the current day. And while not all investments were monster gainers upon reinvestment, all of the reinvested dollars were successful outcomes; that is, reinvested cash resulted in realized or unrealized big gains, small gains, or realized small losses. Clearly, most domestic assets have been up rather dramatically since the first week of August 2011.

    More on my investing process?

    Jan 24, 2014. 06:41 PM | Likes Like |Link to Comment
  • ETFs Let You Invest With Your Head, Rather Than Your Heart [View article]
    Dear User,

    Beta is one measure of risk that investors should consider. In most articles, including this one, I also discuss the risks associated with an asset price falling below a key moving average like the 200-day moving average. Similarly, in most articles, like this one, I talk about the benefits of reducing risk with stop-limit orders when an asset's drawdown exceeds a pre-determined percentage drop.

    It follows that it does not appear you have accurately addressed the intention(s) of the editorial. For example, you chose to quote a line from the piece where I mentioned that EWM's performance achieved 3x the gains of the S&P 500 with less beta risk in 2010. For unknown reasons, you then proceeded to talk about the Sharp Ratio and drawdowns of the two assets from 2011-2013. The apples-to-oranges comments do not apply.

    What is relevant? In the above-mentioned piece, I talk about the many reasons for purchasing EWM in August of 2009 and the primary reason for selling EWM in August of 2011. During the calendar year 2010, or if you prefer, in the two-year period 8/2009-8/2011, the drawdowns and the beta for EWM were less than those for the S&P 500. Risk as a function of long-term trendline breaches (200-day) were also less for EWM than the S&P 500. Those are three examples of how EWM was less risky than the S&P 500 in the period discussed.

    If you'd like to calculate the Sharp Ratio from 8/2009-8/2011 for both EWM and SPY, feel free to do so. However, you will have missed the broader intent of my commentary; that is, exchange-traded funds help money managers/Registered Investment Advisers with the SEC like myself invest with their heads, not their hearts. As described in the piece, it was beneficial for me to own EWM when I did, and it was beneficial to sell the asset when the drawdown hit my stop and the 200-day moving average gave way in August of 2011.

    Jan 24, 2014. 04:18 PM | Likes Like |Link to Comment
  • ETFs Let You Invest With Your Head, Rather Than Your Heart [View article]

    Yes, MUA is a CEF. And yes, of course I venture into closed-end territory. As I wrote in the article above:

    "Similarly, there are a number of yield-oriented income investments in the muni and corporate credit space that I have added to a variety of portfolios here in 2014, including Blackrock Muni Assets (MUA) and Guggenheim BulletShares 2020 High Yield (BSJK). Bear in mind, the "rates can only go up" argument has been largely one-sided."
    Jan 24, 2014. 04:12 PM | 1 Like Like |Link to Comment