Why We Over-Weight Emerging Markets [View article]
User 422955
Keep in mind that while the S&P 500 has substantial non-US revenue (and a complex mix of non-Dollar and Dollar based costs), the majority of its revenue is US revenue. Of the large minority that is non-US, a large portion is from other developed non-US countries. That means that emerging revenue is a small minority of total S&P 500 total revenue. The result is a dilution of the emerging market effect.
Another approach to getting emerging market exposure in a single basket would be purchase of a world stock fund, which would have emerging market companies, non-US developed market companies (which would have some emerging exposure) and US companies (which would also have some emerging exposure).
38 Companies with Top Financial Strength [View article]
OnW: While stats published by S&P and Value Line differ in their conclusions about the effectiveness of their projections for future performance, this article is not about performance or projections. This is about S&P and Value Line ratings as to financial strength which is not the same as prediction of market performance.
38 Companies with Top Financial Strength [View article]
COULDASHOUDA:
Interesting observations. Keep us informed of your going forward findings if you don't mind.
I would agree with your 10% attribution to "what you buy" if you refer to individual stocks or bonds, but would put a much higher attribution to what you buy in terms of asset classes (e.g. SPY versus AGG).
Not sure about the proper ratio of importance between timing of buying and selling. Certainly the lack of a sell discipline is where lots of gains are given back. Lacking personal data on that, I'd tend to guess more 50/50 in importance -- you may well be right on your skewing toward selling, but would tend by personal observation to agree that better decisions are generally made about buying than about selling, or that more time and effort are spent my most investors on what and when to buy and less on what and when to sell.
Why We Over-Weight Emerging Markets [View article]
JPSmith:
I am not personally familiar with ODVNX and have no opinion about the fund, but here are some links to information that will probably tell you much of what you want to know.
The February 2009 fund semi-annual report is here:
Here is an extract from the Morningstar analyst report
Oppenheimer Developing Markets is a sound choice for bold investors. ... Like other managers at Oppenheimer, Leverenz pays no heed to benchmarks, and long-term themes also play a key role. ... Clearly this fund is not for the faint of heart, nor is it a wise choice for those looking to make a short-term investment in emerging-markets stocks. Rather, investors that share management's long-term investment horizon should do well here.
38 Companies with Top Financial Strength [View article]
Predictorman1000:
Several people had for their own and separate reasons asked me for such a list. I thought some others may have a similar information desire so I published the list. That's what and why.
My point was actually not that "if you don't know what to do invest in solid companies". My point was merely to provide data that may or may not be useful to some people.
If an investor didn't know what to do, and didn't want to engage an advisor, they should either do nothing or they should own one all world stock index fund and one broad passive bond index fund (in a suitable proportion).
Buying individual stocks is a form of active management that requires research, conviction, and staying on top of the situation.
This short article was meant to help some people who may be seeking companies rated highly for financial soundness to narrow their research effort -- nothing more than that -- it's just data.
38 Companies with Top Financial Strength [View article]
Predictorman1000: The utility of this list or one along the same lines is for people who want to be invested for the long-term, but are greatly concerned about fundamental quality risks in their holdings. If price appreciation were the primary concern, then a different list, including emerging markets would be used. This list is purely a fundamental screen of company internals without regard to market valuation or price action. That's interesting to some and irrelevant to others. Just putting it out there for those who want to know which companies appear to be fundamentally solid. S&P and Value Line each rate a couple of hundred companies in their "A" range for financial strength, but they only agree in 91 cases --- putting the debt limitation and tangible equity restrictions on knocks the list way down.
Follower004: The charts are percentage change charts that set all securities in the chart to 0% as of the first day of the chart and then show the price as a percentage of the starting price as the time scale moves from left to right. The format makes performance comparison between securities with different prices easier (a stock beginning at $10 that goes up $0.10 would have the same ending position on the chart as a stock beginning at $100 that goes up $1.00)
28 Key Asset Categories: How Do They Compare? [View article]
Prudent Man CFA: If you were a trend follower, you would not find the data to be nonsense, or irrelevant. There are other approaches as CFAs are taught to follow, but it is nonsense to call the data nonsense.
What's the Trend? Where's the Price? [View article]
No Free Cake: Good question. I used both the SMA and the EMA when evaluating trend direction (slope of trend line, position of price relative to trend line, and position of shorter averages relative to trend line). SMA being slower with fewer false positives. EMA being faster with more false positives.
What's the Trend? Where's the Price? [View article]
Your calculations are correct. We used Exponential Moving Averages and erroneously used the label Simple Moving Average. The error is corrected on our blog ( www.qvmgroup.com/inves... ) and we have requested a correction on this SA republication of our article. Sorry and thank you.
Analyste: First, I made no suggestion that DBV be a core holding, or even that any currency fund be a core holding. Second, I always compare all investments to both S&P 500 and Aggregate Bonds just for general benchmarking purposes. Third, I do invest in junk bonds. Fourth, there are no promotional claims from any company in any part of this article. The return data is from Thompson/Reuters, and there is nothing "purported" about the data -- it is the recorded facts, as rendered by Thompson. The data does not take investor taxation into consideration, and there are no charting services of which I am aware that does so, nor do I see the need for that for the purposes of this article. Fifth, this article is not suggesting that currencies in any form are suitable or not suitable to any particular person for any particular purpose -- in fact, this article does not recommend currencies, but rather reports on the rise in their popularity and availability. You seem to take this article to mean and say things that are not meant or said.
Thanks to both of you. Nice to have thoughtful comments with supporting information or ideas. That's the kind of value added commenting that is so often lacking in comments. I appreciate the time and effort you put into making a contribution that moves the dialogue forward.
Wide Fund Survey: Prices vs. Primary Trend [View article]
Alex Trias: I agree. In fact, we use the price (1-day av), the 25-day av, the 50-day av and the 100-day av all versus the 200-day av in determining how far and how fast to leg into the market. We haven't published our full method, but have alluded to it strongly in a recent blog post ( www.qvmgroup.com/inves...) which we also put on our instablog. Thank for the comment.
13 Fixed Income ETFs On the Move Upwards [View article]
Closed-end funds are often leveraged and tend to have high expense ratios relative to mutual funds or ETFs. Expense ratios are always important, but are even more important for bond funds than for equities due to the generally lower returns on bond funds. CEFs also may have less liquidity or higher bid/ask spreads than ETFs. On balance, don't use CEFs if you have a close alternative in the form of a mutual fund or ETF. If there is no alternative and you really want what a CEF has, then consider owning the CEF.
The only bonds that are expected to perform well during inflation are TIPS (Treasury Inflation Protected Securities) -- but they will only go up as much as the CPI (which is arbitrarily measured by the same government that must pay the bills, so watch out on that). Since inflation normally associated with higher interest rates, it is hard to want to own any bonds in an inflationary environment. The shorter the maturity, the quicker you could reinvest at higher rates -- remember shorter maturities cut both ways (can't lock in rates long term if you expect rates to fall). Mortgage funds can behave in different ways based on fixed or variable rates and the rate of refinancing (no suggestions there, just a note that they take special care when being considered). Ideally, I would think you'd want inflation protected bonds or very short bonds while rates are rising, then lock in rates with longer-term bonds if you are able to assess that rates are near a peak -- how hard that may be is unknowable at this time, as we are in unchartered territory.
Why We Over-Weight Emerging Markets [View article]
Keep in mind that while the S&P 500 has substantial non-US revenue (and a complex mix of non-Dollar and Dollar based costs), the majority of its revenue is US revenue. Of the large minority that is non-US, a large portion is from other developed non-US countries. That means that emerging revenue is a small minority of total S&P 500 total revenue. The result is a dilution of the emerging market effect.
Another approach to getting emerging market exposure in a single basket would be purchase of a world stock fund, which would have emerging market companies, non-US developed market companies (which would have some emerging exposure) and US companies (which would also have some emerging exposure).
38 Companies with Top Financial Strength [View article]
38 Companies with Top Financial Strength [View article]
Interesting observations. Keep us informed of your going forward findings if you don't mind.
I would agree with your 10% attribution to "what you buy" if you refer to individual stocks or bonds, but would put a much higher attribution to what you buy in terms of asset classes (e.g. SPY versus AGG).
Not sure about the proper ratio of importance between timing of buying and selling. Certainly the lack of a sell discipline is where lots of gains are given back. Lacking personal data on that, I'd tend to guess more 50/50 in importance -- you may well be right on your skewing toward selling, but would tend by personal observation to agree that better decisions are generally made about buying than about selling, or that more time and effort are spent my most investors on what and when to buy and less on what and when to sell.
Why We Over-Weight Emerging Markets [View article]
I am not personally familiar with ODVNX and have no opinion about the fund, but here are some links to information that will probably tell you much of what you want to know.
The February 2009 fund semi-annual report is here:
www.oppenheimerfunds.c...
The Oppenheimer fund data page is here:
www.oppenheimerfunds.c...
Here is an extract from the Morningstar analyst report
Oppenheimer Developing Markets is a sound choice for bold investors. ... Like other managers at Oppenheimer, Leverenz pays no heed to benchmarks, and long-term themes also play a key role. ... Clearly this fund is not for the faint of heart, nor is it a wise choice for those looking to make a short-term investment in emerging-markets stocks. Rather, investors that share management's long-term investment horizon should do well here.
The Moriningstar data page is here:
quicktake.morningstar....?
38 Companies with Top Financial Strength [View article]
Several people had for their own and separate reasons asked me for such a list. I thought some others may have a similar information desire so I published the list. That's what and why.
My point was actually not that "if you don't know what to do invest in solid companies". My point was merely to provide data that may or may not be useful to some people.
If an investor didn't know what to do, and didn't want to engage an advisor, they should either do nothing or they should own one all world stock index fund and one broad passive bond index fund (in a suitable proportion).
Buying individual stocks is a form of active management that requires research, conviction, and staying on top of the situation.
This short article was meant to help some people who may be seeking companies rated highly for financial soundness to narrow their research effort -- nothing more than that -- it's just data.
38 Companies with Top Financial Strength [View article]
The utility of this list or one along the same lines is for people who want to be invested for the long-term, but are greatly concerned about fundamental quality risks in their holdings. If price appreciation were the primary concern, then a different list, including emerging markets would be used. This list is purely a fundamental screen of company internals without regard to market valuation or price action. That's interesting to some and irrelevant to others. Just putting it out there for those who want to know which companies appear to be fundamentally solid. S&P and Value Line each rate a couple of hundred companies in their "A" range for financial strength, but they only agree in 91 cases --- putting the debt limitation and tangible equity restrictions on knocks the list way down.
Goldman Forecasts China Ascendancy [View article]
28 Key Asset Categories: How Do They Compare? [View article]
What's the Trend? Where's the Price? [View article]
What's the Trend? Where's the Price? [View article]
What's the Trend? Where's the Price? [View article]
Rising Interest in Currency Funds [View article]
Rising Interest in Currency Funds [View article]
Thanks to both of you. Nice to have thoughtful comments with supporting information or ideas. That's the kind of value added commenting that is so often lacking in comments. I appreciate the time and effort you put into making a contribution that moves the dialogue forward.
Wide Fund Survey: Prices vs. Primary Trend [View article]
13 Fixed Income ETFs On the Move Upwards [View article]
The only bonds that are expected to perform well during inflation are TIPS (Treasury Inflation Protected Securities) -- but they will only go up as much as the CPI (which is arbitrarily measured by the same government that must pay the bills, so watch out on that). Since inflation normally associated with higher interest rates, it is hard to want to own any bonds in an inflationary environment. The shorter the maturity, the quicker you could reinvest at higher rates -- remember shorter maturities cut both ways (can't lock in rates long term if you expect rates to fall). Mortgage funds can behave in different ways based on fixed or variable rates and the rate of refinancing (no suggestions there, just a note that they take special care when being considered). Ideally, I would think you'd want inflation protected bonds or very short bonds while rates are rising, then lock in rates with longer-term bonds if you are able to assess that rates are near a peak -- how hard that may be is unknowable at this time, as we are in unchartered territory.