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January 23, 2015
Successful ETF Investing

Successful ETF Investing
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January 23, 2015
Weekly ETF Report

The ETF Tailwind of ECB QE By far, the biggest market-moving event this week was the European Central Bank’s (ECB) decision to implement the Old World version of quantitative easing (QE). Although most everyone suspected the ECB would begin its own bond-buying program, the very bullish tailwind for both domestic and international exchange-traded funds (ETFs) was caused by the unexpected size and scope of the QE. The ECB now has committed to buying 60 billion euros’ worth of bonds per month for 18 months, much larger than the estimate for 50 billion euros per month for 12 months. More importantly, it’s the aggregate size of the ECB’s balance sheet that’s created the strong tailwind, as the new balance sheet will be more than 1.2 trillion euro QE by September 2015. That is far larger than the previously stated 1 trillion euro target. A quick look at the charts of the following ETFs — the PowerShares DB US Dollar Bullish ETF (UUP), the SPDR S&P 500 ETF (SPY) and the Vanguard Total World Stock ETF (VT) — reflects the bullish reaction to the ECB’s QE pronouncement. Interestingly, the rising U.S. dollar seen here via UUP is something that has the potential to weigh down U.S. equities in SPY, but we have yet to see this outcome reflected in the price of SPY. Perhaps more important are the potential near- and medium-term gains in international equities of the sort found in VT. This fund now is back above both its 50- and 200-day moving averages, […]

January 16, 2015
Successful ETF Investing

Successful ETF Investing
Subscribe Today

January 16, 2015
Weekly ETF Report

Beware the Currency Market Turmoil There have been two big trends influencing the markets during the past several months, particularly since early December, and they are the decline in oil prices and the rise in the value of the U.S. dollar vs. rival foreign currencies. I wrote about both of these trends in last week’s issue, as well as in the most recent issue of my Successful ETF Investing newsletter. This week, the big noise came from another currency market, as the Swiss National Bank, or SNB, unexpectedly removed its cap of the franc to the euro. Why was this done? Well, because the SNB thinks that the European Central Bank, ECB, is going to implement some type of a very large quantitative easing (QE) program when it meets next week, and that move would be euro bearish and Swiss franc bullish. It also will likely be dollar bullish, and that means more upside for the greenback and the U.S. Dollar Index. Now, another thing the currency market turmoil is telling us is that the global economy is a treacherous place right now. There’s a lot of stress being put on currency markets in anticipation of the ECB’s QE decision, and that’s causing the dollar to rise — and dollar-denominated assets such as oil and other commodities to falter. The chart below of the benchmark commodity index, the DB Commodities Tracking Index Fund (DBC), tells us all we need to know about the value of dollar-denominated assets and their plunge during the past six months. At […]

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How Europe's Easy Money will Affect the World

January 23, 2015

The ETF Tailwind of ECB QE By far, the biggest market-moving event this week was the European Central Bank’s (ECB) decision to implement the Old World version of quantitative easing (QE). Although most everyone suspected the ECB would begin its own bond-buying program, the very bullish tailwind for both domestic and international exchange-traded funds (ETFs) was caused by the unexpected size and scope of the QE. The ECB now has committed to buying 60 billion euros' worth of bonds per month for 18 months, much larger than the estimate for 50 billion euros per month for 12 months. More importantly, it’s the aggregate size of the ECB’s balance sheet that’s created the strong tailwind, as the new balance sheet will be more than 1.2 trillion euro QE by September 2015. That is far larger than the previously stated 1 trillion euro target. A quick look at the charts of the following ETFs -- the PowerShares DB US Dollar Bullish ETF (UUP), the SPDR S&P 500 ETF (SPY) and the Vanguard Total World Stock ETF (VT) -- reflects the bullish reaction to the ECB’s QE pronouncement. Interestingly, the rising U.S. dollar seen here via UUP is something that has the potential to weigh down U.S. equities in...

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Investors have become complacent. Stocks are near all-time highs. Volatility is low. It's almost like investors are blind to the three coming catastrophes that can crash the market 30% or more in 2013:...
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Fund Allocation
abc
25%
def
25%
ghi
25%
jkl
25%
Name Ticker Date Buy Price Stop Price
number 1 abc 08/30/2009 19.74 17.74
number 2 def 10/13/2009 19.72 17.72
number 3 ghi 05/15/2009 19.35 17.35
number 4 jkl 03/30/2009 20.08 17.08