This is a prepaid event and the in-person class costs $20. You must register and pay through PayPal (you can use a credit card) at: https://www.paypal.com/cgi-bi/webscr?cmd=_s-xclick&hosted_button_id=ZHARD4QPF4P94 (this URL is good for in-person attendance and not the webinar).

Space is limited and all of this group's previous classes have sold out. Please register early.

There is a webinar available for the class (you hear the presentation and see the slides, there is no video) and the cost is only $15. You can register for the webinar at: https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=55SXFKTV644C6.

The class will be held at the group's meeting hall at 5th Avenue and 21st Street in Manhattan. You will receive directions and at least one reminder after you have paid and registered.

The New York Investing Meetup group offers a profitable alternative to Wall Street hype. It provides unbiased, practical stock market education and economic analysis from independent traders and successful investors. You can view their videos on You Tube at:http://www.youtube.com/watch?v=BnSltpGcKNM.

CLASS LEVEL: Beginner/Intermediate Investor

SPDR University, the ETF information arm of State Street Global Advisors released a report yesterday, Election 2012: A Time of Polarizing Politics & Heightened Uncertainty, outlining the best ETFs to hold depending who you think will win. Written by David Mazza, State Street's head of ETF investment strategy, it's no surprise that all the recommended funds comes from SPDR.

In this low interest rate environment, high yielding equities have been a favorite among investors. Under a Mitt Romney win, Mazza expects favorable tax treatment for dividends to continue, thus companies that pay dividends would be big beneficiaries. Certain sectors and industries would also benefit under a Romney administration. Increased domestic production would help the energy sector, while less regulation would boost the metals and mining sector. A less restrictive tax environment would help that transportation industry and an increase, or at least few cuts, in defense spending would help the aerospace and defense sector.

The ETFs SPDR suggests for a Romney win:

SPDR S&P® Dividend ETF (SDY)
Utilities Select Sector SPDR Fund (XLU)
SPDR S&P Telecom ETF (XTL)
Energy Select Sector SPDR Fund (XLE)
SPDR S&P Oil & Gas Exploration & Production ETF (XOP)
SPDR S&P Metals and Mining ETF (XME)
SPDR S&P Transportation ETF (XTN)
SPDR S&P Aerospace & Defense ETF (XAR)

Under another four years of Obama taxes are likely to rise. Mazza suggests municipal bonds to investors in higher tax brackets. If taxes rise on dividends, REITs would offer a better choice for investors seeking income. However, increased government spending could spark a rally in the infrastructure sector. The healthcare industry should also "react favorably" to the president's reelection.

The ETFs SPDR suggests for an Obama win:

SPDR Nuveen Barclays Capital Short Term Municipal Bond ETF (SHM)
SPDR Nuveen Barclays Capital Municipal Bond ETF (TFI)
SPDR Nuveen S&P High Yield Municipal Bond ETF (HYMB)
SPDR Dow Jones REIT ETF (RWR)
SPDR FTSE/Macquarie Global Infrastructure 100 ETF (GII)
Health Care Select Sector SPDR Fund (XLV)
SPDR S&P Health Care Services ETF (XHS)
SPDR S&P Biotech ETF (XBI)

Should the political paralysis that has gripped Washington over the past two years continue in the future, preventing major changes, Mazza suggests non-dollar denominated assets and those low to no correlation to dollar-denominated assets. This could lead to a broad move away from U.S. assets to those in high growth emerging markets. For those looking to invest in local currencies, he suggests non-US fixed income. Gold would continue to rise if countries continue to devalue their currencies to boost exports or the U.S faces another debt crisis. And with increased government spending leading to a long-term inflationary environment, assets with a real return should rally.

The ETFs SPDR suggests for an political paralysis:

SPDR Barclays Capital Emerging Markets Local Bond ETF (EBND)
SPDR Gold Trust (GLD)
SPDR SSgA Multi-Asset Real Return ETF (RLY)

The third-largest airline, in terms of traffic, whined that it couldn’t compete with the other big U.S. airlines, because they had all cut costs by declaring bankruptcy at least once during the last decade, while American had not.

However, the entire airline industry has been funk due to higher fuel prices and an lagging economy that leaves many consumers taking fewer flights. The industry’s troubles can be seen in the 40% decline in the Guggenheim Airline ETF (FAA).  Not that this should be any surprise. A year ago, I basically declared the industry had peaked in my story Flying High With Airline Stocks.

Surprisingly, the ETF jumped 22 cents to $25.25 on Tuesday because other airline stocks popped. It appears American’s woes could be a boon for the rest of the industry as they take over some of its routes. This move is a good example of why ETFs are better investments than single stocks. Not only did the ETF’s diversified portfolio protect it against AMR’s troubles, but by holding the entire industry, the ETF registered a gain.

Zacks says the ETF is worth watching as the bankruptcy plays out and the competitors move in on its hubs. But I think you should just stay away. Oil prices will continue to hurt airline income statements. Not to mention the potential fallout from the European debt crisis.

Dow Jones Indexes announced on Wednesday that its Dow Jones Golden Crossover U.S. Large-Cap Total Stock Market Index was going to slice its equity allocation from 100% to 25% over the next five days. The remaining 75% of the portfolio would be held in short-term U.S. Treasury Bills, which is pretty close to cash.

Using a quantitative and rules-based algorithm, the index has signaled a downward-trending market condition called a “Dead Cross.” The Dead Cross occurs when the market’s 50-day moving average crosses below its 200-day moving average. In short, a very bad sign for investors.

Known as the “Moving Average Crossover System”, the index’s quantitative strategy dynamically changes component weights between an underlying equity index and a cash index according to the occurrence of “Golden Cross” and “Dead Cross” signals. A Golden Cross occurs when the 50-day moving average crosses above the 200-day moving average. During this period, the index tracks the underlying equity index, in this case the Dow Jones U.S. Large-Cap Total Stock Market Index. During Dead Cross periods, the index is allocated between the underlying equity index and a cash equivalent.

While no ETF tracks the Golden Crossover index, two ETFs track the Dow Jones U.S. Large-Cap Total Stock Market Index: the Schwab U.S. Large Cap ETF (SCHX) and the SPDR Dow Jones Large Cap ETF (ELR).

Dow Jones Indexes says from December 31, 1999 through June 30, 2011, the Golden Crossover index outperformed the Dow Jones U.S. Large-Cap Total Stocks Market Index by 4.44 percentage points and reduced volatility by 5.97 percentage points, measured on an annualized basis.

The Dead Cross occurred in mid August. John Nyaradi says in addition to this, the market entered another rare bear territory indicator on the “point and figure” methodology used by Charles Dow himself. He says a dead cat bounce is a possibility, which is what we appear to be in right now, but that the major trend is negative. He recommends inverse ETFs.

Dow Jones Indexes announced on Wednesday that its Dow Jones Golden Crossover U.S. Large-Cap Total Stock Market Index was going to slice its equity allocation from 100% to 25% over the next five days. The remaining 75% of the portfolio would be held in short-term U.S. Treasury Bills, which is pretty close to cash.

Using a quantitative and rules-based algorithm, the index has signaled a downward-trending market condition called a “Dead Cross.” The Dead Cross occurs when the market’s 50-day moving average crosses below its 200-day moving average. In short, a very bad sign for investors.

Known as the “Moving Average Crossover System”, the index’s quantitative strategy dynamically changes component weights between an underlying equity index and a cash index according to the occurrence of “Golden Cross” and “Dead Cross” signals. A Golden Cross occurs when the 50-day moving average crosses above the 200-day moving average. During this period, the index tracks the underlying equity index, in this case the Dow Jones U.S. Large-Cap Total Stock Market Index. During Dead Cross periods, the index is allocated between the underlying equity index and a cash equivalent.

While no ETF tracks the Golden Crossover index, two ETFs track the Dow Jones U.S. Large-Cap Total Stock Market Index: the Schwab U.S. Large Cap ETF (SCHX) and the SPDR Dow Jones Large Cap ETF (ELR).

Dow Jones Indexes says from December 31, 1999 through June 30, 2011, the Golden Crossover index outperformed the Dow Jones U.S. Large-Cap Total Stocks Market Index by 4.44 percentage points and reduced volatility by 5.97 percentage points, measured on an annualized basis.

The Dead Cross occurred in mid August. John Nyaradi says in addition to this, the market entered another rare bear territory indicator on the “point and figure” methodology used by Charles Dow himself. He says a dead cat bounce is a possibility, which is what we appear to be in right now, but that the major trend is negative. He recommends inverse ETFs.

According to the Standard & Poor’s Indices Versus Active Funds Scorecard (SPIVA), for the year ended June 30, the S&P Composite 1500 Index, tracked by the iShares S&P 1500 Index Fund (ISI) outperformed only 48.99% of all the domestic equity funds. Small-capitalization stocks were responsible for pushing active managers over the 50% mark, with the S&P SmallCap 600 Index, tracked by the iShares S&P SmallCap 600 Index Fund (IJR), beating only 47.5% of all small-cap funds.

This plays into one of the main reasons for using active fund managers: they can spot inefficient pricings in markets ignored by Wall Street analysts and institutions. This strategy typically works well with small stocks and equities in emerging markets.

But fans of active management shouldn’t crow too loudly, in all the other categories, the indexes won. The S&P 500 Index, tracked by the SPDR (SPY), beat 60.5% of the active managers, the S&P MidCap 400 – SPDR S&P MidCap 400 ETF (MDY) – beat 66.7% of the active managers.

Breaking it down further, between growth, core and value, small-cap value was the true hero, with 60.4% of the funds beating the S&P SmallCap 600 Value Index and the iShares S&P SmallCap 600 Value Index Fund (IJS). However, over three years, the index beat 52.3% of the funds.

Most shocking was large-cap value funds. Over the past year, 54.6% of the large-cap value funds posted better returns that the S&P 500 Value Index — iShares S&P 500 Value Index Fund (IVE). For the 3-year and 5-year periods, the percentage of large-cap value funds that topped the index were 55.9 and 64.7, respectively.

But investors in ETFs and an indexing strategy shouldn’t worry, the results don’t include the recent stock swoon. And in the 2008 crash, the average equity fund plunged 39.5%, according to Lipper, compared with the 37% drop in the S&P 500.

However, one of the big reasons for not buying actively managed funds is that few can consistently beat the indexes. So, a one-year record might just be a bit of luck. And the long-term results bear it out. Over three-years, small-cap funds still had the best record, but the indexes beat 63.1% of the funds. That only increased for the other categories, with 75% of all midcap funds beaten by its benchmark.

Meanwhile, growth funds took a kick to the teeth. Over the three-year period, the indexes beat 75% of the large-cap growth funds, 84.1% of the mid-cap growth funds and 69.6% of the small-cap growth funds. And for the five-year periods, all the growth sectors fared worse. These funds track the winning indexes: S&P 500 Growth Index Fund (IVW), S&P MidCap 400 Growth Index Fund (IJK) and S&P SmallCap 600 Growth Index Fund (IJT)