That Wasn't a Bear Market, This Is a Bear Market! [View article]
Your thesis reads well in theory. However, the "average Joe" DID NOT merely "buy a smattering of mutual funds, individual stocks, sector ETFs." That's not a true accounting of historical events.
In the previous bear market, you had irrational greed for technology stocks and the so-called New Economy, resembling the irrational greed for real estate in the low interest rate environ that followed. People were heavily over-allocated to large-cap tech in the Nasdaq. Losses were 76% for the Nasdaq.
The market based wealth of most average Joe investors is/was based inside the 401k. The overwhelming majority of 401ks didn't even have small-cap funds inside them. That puts a further dent in the idea that you can use an equal-weight analysis.
Third, buy-n-hold investing was firmly entrenched in the minds of virtually all investors in 2000. The average Joe rode all of it down, mostly consisting of "get-rich-quick, tech fever" losses. This time, rational fear and irrational fear caused many more folks to sell earlier, rightly or wrongly, so many more people reduced the extent of their losses. Not so in the last bear.
As a radio personality, writer and money manager, I witnessed losses in the previous bear that far exceeded 50% in most cases. In fact, many were looking at 75% losses thanks to the tech heavy allocation of the "average Joe." In this bear, there were more efforts to mitgate thoses losses, since people weren't willing to suffer as badly as they had in the 2000-2002 period.
Obviously, from an emotional perspective, this bear is far, far worse. The last bear did not seem as bad due to home price appreciation. This bear feels worse because of a more severe recession and the epic real estate decline.
Nevertheless, if numbers are going to be used as though people were invested in a smattering, equal-weighted fashion, both then and now, that's inaccurate. It is also a bigger asssumption to asusme that everyone bought and held and hoped the way that they did in 2000-2002... many gave in earlier.
>>We cover ETFs from all issuers, regardless of whether they >>advertise on our site or any other, and we stick to facts when >>doing so.
It's possible that you are not required to disclose your financial relationship with Emerging Global... perhaps because your company, ETF Database, is not a Registered Investment Adviser. Yet I believe it is critical for influential writers/analysts to disclose such relationships. I know that I would.
When you omit the facts about stated cost, hidden costs, tradeability, low volume and index longevity... when you omit key facts about your sponsor Emerging Global's product(s)... when you identify "dirty little secrets" of non-sponsors like Vanguard and Barclays/BlackRock... it seems to me that you're sticking to selective facts that serve an advertiser/sponsor arrangement.
And you know what? I'm okay with biased opinions... regardless of their origin. Every one of us presents biased opinions. However, I'm NOT okay with the reality that you don't disclose to your readers the relationship that you have with your sponsors or advertisers.
China ETFs: Is Goldilocks in the House? [View article]
>>did you really know anything about china? where do you live?
Actually, yes... I know quite a bit about China. I speak a fair amount of Mandarin, worked and traveled in SE Asia for 5 years and married a mainland Chinese woman.
You're entitled to your opinion, of course. But perhaps you should learn more about my background before casting stones. Incidentally, there are plenty of top analysts and professionals living and working in China today who share my opinion.
The Secret To Surviving Today's Unpredictable Stock Market [View article]
E,
Indeed, there are many assets that investors must consider (other than stocks) to thrive and survive. Yet a 71% weighting in bonds and quasi-bonds (utilities) -- TIP, TLT, XLU, HYG, MBB -- is an egregious example of 20/20 hindsight.
I am not, nor have I ever been, a buy-n-holder. So there are times when my client accounts will be exceptionally income-oriented. In fact, there are times when I may hold a similar "risk-off" aggregation.
However, your article uses a buy-n-hold approach with a multi-year example of equal-weighted portfolios with zero changes along the way. When it comes to buy-n-hold, 14% in broad market U.S. stocks is super light... except for perma-bears.
King Dollar? The Swiss Franc May Become the World's Currency [View article]
Guardian3981,
The central theme of my commentary is that the U.S. dollar MAY be losing its safe haven status. I'm not talking about an extended period of stock market decline.
Putting away the semantics... the "turmoil/uncertainty" refers to civil unrest in Libya and the price spike in oil. How did safety-seekers choose to respond? They bought gold, the yen, and the Swiss franc, while others sold the U.S. dollar outright.
That's a different reaction from the one we witnessed during 2008's banking disaster. It's a different response from the one that we initially experienced with the sovereign debt "crisis" in Europe.
The dollar has already lost out to gold. Less clear is whether or not another fiat currency will take over the reins.
Oil ETFs: Still Crazy After All These Years [View article]
RGB
That's all well and good... but from the very beginning, USO was sold to investors as a way to capture the upside of "oil" as the investor knows "oil." We can discuss backwardation and contango until we're all blue in the face, but exchange-traded investors had higher expectations.
And with good reason. They were sold on getting crude oil, even if the propsectuses detailed the intricate/complex issues associated with futures.
Emerging Global Launches Brazil Infrastructure ETF [View article]
Michael,
Even though your company, ETF Database, may not be regulated by the SEC or the rules that Registered Investment Advisers must follow... even if publishing guidelines allow you to skirt disclosure issues... you ought to disclose the financial relationships with your sponsors and advertisers. That's the right thing to do.
Into the great wide open? I haven't seen you since you approached me at an ETF conference a few years back. And I haven't seen Mike in god knows how long.
Seeking Alpha has been very good to me over the years, though it is becoming a bit more crowded. Consider sending material to other prominent portals as well (e.g., theStreet.com). I also recommend that you look at ambitious start-ups; they may feature you/your ideas prominently.
Give me a buzz or an e-message whenever you'd like.
How Do You Know When An ETF Is Actually A Bargain? [View article]
ExBingoAddict... Bingo!
PollySerial... you picked up the point of the brief piece as well.
I can understand those who wanted a meatier editorial. I manage money for a living, so I cannot always put forward a phenomonal and lengthy feature. Yet, on balance, anyone can review my newsfeed to see a wealth of outstanding content.
As for any cynic who doesn't understand that SA republishes articles from my long-running ETF Expert site... that SA does not pay this author per click... that presidents of SEC-registered investment advisers are handsomely compensated in their primary role already... I'm not sure what to tell you. You can always choose to read another ETF enthusiast.
How ETF Investors Might Get In On Single-Family Rentals [View article]
Alan,
>>Jim Cramer lamented last year over the challenges...
I'm sorry, unless I'm writing about flip-flopping and/or questionable Bear Stearns comments, I'm not particularly interested in Cramer.
>>I know you cited it for correlation reasons, >>but recent correlation might not hold in the future.
Correlation is the only reason... but it is not one to be overlooked. What's more, I never buy-n-hold... I am not looking for 3-year or 5-year correlations. Besides, they wouldn't exist since the potential asset class is brand new in the REIT world.
>>Now, those other two REITs you mentioned >>I need to look into those...
A handful of individual REITs, mostly recent IPOs. They are true to the space, yet individual securities do not offer diversification. Moreover, 90% of all IPOs will close below the original offer price with 18 months.
In all, there are no perfect solutions here. I gave a few ideas, warts and all.
Abandoning High Yield Bond ETFs? Rethink Your Premises [View article]
Cranky... appreciation.
Flash... you wrote, "people have predicting a top in bond for years." Precisely. And that prediction has failed miserably. Diversified high yield corporates continued to perform.
High Oak... you wrote, "when spreads compress..." But that hasn't happened significantly... not yet. When they do, nearly all yield-oriented income assets will be hurt. If you read my article, I made the points that: (a) one shouldn't add to or abandon intermediate high yield, (b) the markets themselves will tell you when to lighten up on intermediate high yield, (c) one should consider three different investment possibilities rather than adding to intermediate high yield (i.e., BSJH, AUNZ, PFXF).
QE3 Continues To Rev Up Emerging Market Corporate Bonds And Currencies [View article]
Mr. Crouch,
Your sarcasm notwithstanding, you misinterpreted the point of this article. You've taken unnecessary and unfounded shots at my "aim" as well.
QE central bank intervention(s) are bad for the long-term well-being of the developed economies that employ them. Many emerging market economies, particularly those that are less dependent on exports, will be the benficiaries of the U.S. Federal Reserve's dollar-devaluating "wealth effect" efforts. It follows that emerging market sovereign debt, EM corporate debt, EM currencies and proxies like gold will benefit investors over time.
If you believe that investors cannot benefit from the poor decisions of governments, or if you believe that I have not identified the assets that will benefit from QE1,2,3,4,5, you are entitled to your opinion. However, you're not entitled to mischaracterize mine.
As for your ill-informed statement on my article's purpose, I do not have a financial arrangement with WisdomTree or any other ETF provider. Legal disclaimers are necessary for those of us who own successful SEC-registered investment advisers and who manage substantial amounts for families across the country.
Investing In 'Risk-Neutral' Inflation-Fighting ETFs [View article]
Fludolph,
>>When the economy recovers sufficiently and inflation starts to build, >>the Fed can remove that money by selling the bonds it bought
I suppose it would be nice to believe that this was even possible. Unfortunately, the Fed/intragovernmental holdings of $6.3 trillion represent 40% of the debt. Even the Fed alone with $1.7 trillion is 11% of the debt.
As the president of a Registered Investment Adviser with the SEC, I can assure you that it is no small task to sell 1/10 or even 1/100th of anything... not without moving the price of the entire market. It follows that the Fed will not be able tame inflation when the economy recovers sufficiently, not unless it is remarkably assertive with a quantitative tightening program. And does anyone really believe that the Fed will do that?
Even if the Fed wanted to tackle inflation with the same gusto as it is doing in its role as the buyer of first resort on treasury bonds, it would have to risk crippling rates. It may also have to contend with other rate rising factors, perhaps China/Japan wanting to reduce holdings or a predictable burst of the treasury balloon or a Euro-style California bailout by the U.S.. government.
Nope... the Fed will not be able to sell the bonds as you suggest, let alone take a truly aggressive tightening stance when the economy grows "sufficiently." They will accept inflation because this Fed will not risk being blamed for snuffing out a recovery and causing yet another recession with aggressive monetary tightening policy... they will opt for the employment side of the dual mandate.
That Wasn't a Bear Market, This Is a Bear Market! [View article]
In the previous bear market, you had irrational greed for technology stocks and the so-called New Economy, resembling the irrational greed for real estate in the low interest rate environ that followed. People were heavily over-allocated to large-cap tech in the Nasdaq. Losses were 76% for the Nasdaq.
The market based wealth of most average Joe investors is/was based inside the 401k. The overwhelming majority of 401ks didn't even have small-cap funds inside them. That puts a further dent in the idea that you can use an equal-weight analysis.
Third, buy-n-hold investing was firmly entrenched in the minds of virtually all investors in 2000. The average Joe rode all of it down, mostly consisting of "get-rich-quick, tech fever" losses. This time, rational fear and irrational fear caused many more folks to sell earlier, rightly or wrongly, so many more people reduced the extent of their losses. Not so in the last bear.
As a radio personality, writer and money manager, I witnessed losses in the previous bear that far exceeded 50% in most cases. In fact, many were looking at 75% losses thanks to the tech heavy allocation of the "average Joe." In this bear, there were more efforts to mitgate thoses losses, since people weren't willing to suffer as badly as they had in the 2000-2002 period.
Obviously, from an emotional perspective, this bear is far, far worse. The last bear did not seem as bad due to home price appreciation. This bear feels worse because of a more severe recession and the epic real estate decline.
Nevertheless, if numbers are going to be used as though people were invested in a smattering, equal-weighted fashion, both then and now, that's inaccurate. It is also a bigger asssumption to asusme that everyone bought and held and hoped the way that they did in 2000-2002... many gave in earlier.
Defending Emerging Market ETFs [View article]
>>advertise on our site or any other, and we stick to facts when
>>doing so.
It's possible that you are not required to disclose your financial relationship with Emerging Global... perhaps because your company, ETF Database, is not a Registered Investment Adviser. Yet I believe it is critical for influential writers/analysts to disclose such relationships. I know that I would.
When you omit the facts about stated cost, hidden costs, tradeability, low volume and index longevity... when you omit key facts about your sponsor Emerging Global's product(s)... when you identify "dirty little secrets" of non-sponsors like Vanguard and Barclays/BlackRock... it seems to me that you're sticking to selective facts that serve an advertiser/sponsor arrangement.
And you know what? I'm okay with biased opinions... regardless of their origin. Every one of us presents biased opinions. However, I'm NOT okay with the reality that you don't disclose to your readers the relationship that you have with your sponsors or advertisers.
>>Gary: Generally love your stuff
I am pleased to hear it
China ETFs: Is Goldilocks in the House? [View article]
Actually, yes... I know quite a bit about China. I speak a fair amount of Mandarin, worked and traveled in SE Asia for 5 years and married a mainland Chinese woman.
You're entitled to your opinion, of course. But perhaps you should learn more about my background before casting stones. Incidentally, there are plenty of top analysts and professionals living and working in China today who share my opinion.
The Secret To Surviving Today's Unpredictable Stock Market [View article]
Indeed, there are many assets that investors must consider (other than stocks) to thrive and survive. Yet a 71% weighting in bonds and quasi-bonds (utilities) -- TIP, TLT, XLU, HYG, MBB -- is an egregious example of 20/20 hindsight.
I am not, nor have I ever been, a buy-n-holder. So there are times when my client accounts will be exceptionally income-oriented. In fact, there are times when I may hold a similar "risk-off" aggregation.
However, your article uses a buy-n-hold approach with a multi-year example of equal-weighted portfolios with zero changes along the way. When it comes to buy-n-hold, 14% in broad market U.S. stocks is super light... except for perma-bears.
Gary Gordon Positions For 2012: Shunning Developed World Treasuries In Favor Of Emerging And Corporate Debt, MLPs [View article]
King Dollar? The Swiss Franc May Become the World's Currency [View article]
The central theme of my commentary is that the U.S. dollar MAY be losing its safe haven status. I'm not talking about an extended period of stock market decline.
Putting away the semantics... the "turmoil/uncertainty" refers to civil unrest in Libya and the price spike in oil. How did safety-seekers choose to respond? They bought gold, the yen, and the Swiss franc, while others sold the U.S. dollar outright.
That's a different reaction from the one we witnessed during 2008's banking disaster. It's a different response from the one that we initially experienced with the sovereign debt "crisis" in Europe.
The dollar has already lost out to gold. Less clear is whether or not another fiat currency will take over the reins.
Gary
Oil ETFs: Still Crazy After All These Years [View article]
That's all well and good... but from the very beginning, USO was sold to investors as a way to capture the upside of "oil" as the investor knows "oil." We can discuss backwardation and contango until we're all blue in the face, but exchange-traded investors had higher expectations.
And with good reason. They were sold on getting crude oil, even if the propsectuses detailed the intricate/complex issues associated with futures.
G
Emerging Global Launches Brazil Infrastructure ETF [View article]
Even though your company, ETF Database, may not be regulated by the SEC or the rules that Registered Investment Advisers must follow... even if publishing guidelines allow you to skirt disclosure issues... you ought to disclose the financial relationships with your sponsors and advertisers. That's the right thing to do.
Gary
How To Trade ETFs On Their Highs [View article]
Into the great wide open? I haven't seen you since you approached me at an ETF conference a few years back. And I haven't seen Mike in god knows how long.
Seeking Alpha has been very good to me over the years, though it is becoming a bit more crowded. Consider sending material to other prominent portals as well (e.g., theStreet.com). I also recommend that you look at ambitious start-ups; they may feature you/your ideas prominently.
Give me a buzz or an e-message whenever you'd like.
G-Man (G-Hambre to Cubanos)
How Do You Know When An ETF Is Actually A Bargain? [View article]
PollySerial... you picked up the point of the brief piece as well.
I can understand those who wanted a meatier editorial. I manage money for a living, so I cannot always put forward a phenomonal and lengthy feature. Yet, on balance, anyone can review my newsfeed to see a wealth of outstanding content.
As for any cynic who doesn't understand that SA republishes articles from my long-running ETF Expert site... that SA does not pay this author per click... that presidents of SEC-registered investment advisers are handsomely compensated in their primary role already... I'm not sure what to tell you. You can always choose to read another ETF enthusiast.
How ETF Investors Might Get In On Single-Family Rentals [View article]
>>Jim Cramer lamented last year over the challenges...
I'm sorry, unless I'm writing about flip-flopping and/or questionable Bear Stearns comments, I'm not particularly interested in Cramer.
>>I know you cited it for correlation reasons,
>>but recent correlation might not hold in the future.
Correlation is the only reason... but it is not one to be overlooked. What's more, I never buy-n-hold... I am not looking for 3-year or 5-year correlations. Besides, they wouldn't exist since the potential asset class is brand new in the REIT world.
>>Now, those other two REITs you mentioned
>>I need to look into those...
A handful of individual REITs, mostly recent IPOs. They are true to the space, yet individual securities do not offer diversification. Moreover, 90% of all IPOs will close below the original offer price with 18 months.
In all, there are no perfect solutions here. I gave a few ideas, warts and all.
Abandoning High Yield Bond ETFs? Rethink Your Premises [View article]
Flash... you wrote, "people have predicting a top in bond for years." Precisely. And that prediction has failed miserably. Diversified high yield corporates continued to perform.
High Oak... you wrote, "when spreads compress..." But that hasn't happened significantly... not yet. When they do, nearly all yield-oriented income assets will be hurt. If you read my article, I made the points that: (a) one shouldn't add to or abandon intermediate high yield, (b) the markets themselves will tell you when to lighten up on intermediate high yield, (c) one should consider three different investment possibilities rather than adding to intermediate high yield (i.e., BSJH, AUNZ, PFXF).
QE3 Continues To Rev Up Emerging Market Corporate Bonds And Currencies [View article]
Your sarcasm notwithstanding, you misinterpreted the point of this article. You've taken unnecessary and unfounded shots at my "aim" as well.
QE central bank intervention(s) are bad for the long-term well-being of the developed economies that employ them. Many emerging market economies, particularly those that are less dependent on exports, will be the benficiaries of the U.S. Federal Reserve's dollar-devaluating "wealth effect" efforts. It follows that emerging market sovereign debt, EM corporate debt, EM currencies and proxies like gold will benefit investors over time.
If you believe that investors cannot benefit from the poor decisions of governments, or if you believe that I have not identified the assets that will benefit from QE1,2,3,4,5, you are entitled to your opinion. However, you're not entitled to mischaracterize mine.
As for your ill-informed statement on my article's purpose, I do not have a financial arrangement with WisdomTree or any other ETF provider. Legal disclaimers are necessary for those of us who own successful SEC-registered investment advisers and who manage substantial amounts for families across the country.
Investing In 'Risk-Neutral' Inflation-Fighting ETFs [View article]
>>When the economy recovers sufficiently and inflation starts to build,
>>the Fed can remove that money by selling the bonds it bought
I suppose it would be nice to believe that this was even possible. Unfortunately, the Fed/intragovernmental holdings of $6.3 trillion represent 40% of the debt. Even the Fed alone with $1.7 trillion is 11% of the debt.
As the president of a Registered Investment Adviser with the SEC, I can assure you that it is no small task to sell 1/10 or even 1/100th of anything... not without moving the price of the entire market. It follows that the Fed will not be able tame inflation when the economy recovers sufficiently, not unless it is remarkably assertive with a quantitative tightening program. And does anyone really believe that the Fed will do that?
Even if the Fed wanted to tackle inflation with the same gusto as it is doing in its role as the buyer of first resort on treasury bonds, it would have to risk crippling rates. It may also have to contend with other rate rising factors, perhaps China/Japan wanting to reduce holdings or a predictable burst of the treasury balloon or a Euro-style California bailout by the U.S.. government.
Nope... the Fed will not be able to sell the bonds as you suggest, let alone take a truly aggressive tightening stance when the economy grows "sufficiently." They will accept inflation because this Fed will not risk being blamed for snuffing out a recovery and causing yet another recession with aggressive monetary tightening policy... they will opt for the employment side of the dual mandate.
Dividend ETF Bubble? Not Unless Treasury Bonds Burst First (Podcast) [View article]