volatility

ETF Battles: USMV vs. SPLV Who Wins?

This is an excerpt from ETF Battles on ETFguide TV between USMV vs. SPLV – two volatility minimizing stock ETFs. Who wins the battle? Stock market volatility per the CBOE S&P 500 VIX Index (VIX) has skyrocketed in 2020. In mid-March, the VIX jumped near +500% and has since backed off. Nevertheless, daily volatility remains …

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How to Protect Your Capital in a Dangerous Climate

“For those properly prepared, the bear market is not only a calamity but an opportunity,” said investing great Sir John Templeton. Are you ready or are you running?  News headlines are drenched with the same old same old: Coronavirus is spreading, business and travel interruptions are occurring, and global stock prices are sinking fast. Blah, …

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Stocks: What’s the Most Profitable Trading Strategy during the U.S. Presidential Election Cycle?

Which years within the U.S Presidential election year cycle are best for equity investors? This is an excerpt from ETFguide TV How Stocks Behave during the Presidential Election Cycle with Ron DeLegge at ETFguide. Super Tuesday is over and leading candidates for the U.S. presidency on the Democratic side are becoming more clear. One of …

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3 Strategies for Managing Higher Volatility

“Everyone has the brain power to make money in stocks. Not everyone has the stomach,” once observed legendary fund manager Peter Lynch. His point was that most people don’t have the stomach – or emotional stamina – for sticking to an investment plan when market conditions get choppy. What makes 2018 remarkably different from the …

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The Right Context for Active Management

Actively managed portfolios are not a device of nefarious origin. And neither is it a “dead exercise” as the vox populi has declared. Nevertheless, to be successful at active investing, there are some big time hurdles. Before we discuss these obstacles, let’s first clarify the term “active investor.” An “active investor” is somebody who is …

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Is Sector Performance Following History?

It’s been said the more things change, the more they stay the same. And right now, the performance of stock market industry sectors is behaving right in line with that view. During the first quarter, the total U.S. stock market (NYSEARCA:VTI) rose almost 6% in value. Driving the stock market’s strong start has been bullish momentum …

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Risk and Volatility: Know the Difference

On financial networks and in finance classrooms around the globe, stock market volatility is routinely mis-classified as “risk.”  Unfortunately, this erroneous view causes people to make investment mistakes. Elroy Dimson, a London Business School professor once wrote, that risk “means more things can happen than will happen.” It’s an eloquent way for describing risk, which …

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Rising Stock Market Volatility, A Sign of the Times

Stock market volatility ain’t what it used to be. And unlike recent years, the VIX, a benchmark of volatility in S&P 500 stocks, (NYSEARCA:VOO) has been consistently up in 2016. The chart below illustrates how market conditions and stock market volatility or VIX (ChicagoOptions:^VIX) have dramatically changed over the past 52-weeks. (Audio) Stress-Test Your Investments Now + It’s Not a Bear …

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Don’t Count on the Fed to Backstop Your Investments

Yes kids, stock prices can sometimes plummet. And they did during the first trading session of 2016. It’s a helpful reminder to forgetful innocents about this unforgiving fact. The chart below shows how the SPDR S&P 500 ETF (NYSEARCA:SPY) has declined 1.65% over the past month. That in itself isn’t disastrous, but stock market volatility (ChicagoOptions:^VIX) …

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How to Profit from Rising Volatility

Stock market volatility is often wrongly portrayed by the mainstream media as an enemy. In reality, it’s not. First, prudent investors use volatility (ChicagoOptions:^VIX) as an effective tool to measure the stock market’s psychology. Why? Because excessive bullishness or bearishness in market prices is instantaneously reflected in the VIX. And therein lies the opportunity! At ETFguide, we use VIX readings in conjunction …

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How to Cut Your Trading Cost in Half

Although our era of discount brokers and commission free platforms has greatly reduced the cost of online trading, the cost of buy and selling stocks along with ETFs can still add up. This is especially true when stock market volatility (ChicagoOptions:^VIX) is rising. The chart below illustrates how historical bid-ask spreads (also known as “bid-offer spreads”) have widened …

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Should You Invest in Market Neutral Funds?

I was recently asked by a reader named M.M. about the benefits of investing in market neutral funds. Equity market neutral funds hold long/short stock positions and aim to capitalize on investment opportunities in a specific group of stocks while keeping neutral exposure to broader groups of stocks either by sector, market size, or country. (Audio) …

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PRC Calculation

How Bad Investments Sometimes Turn Out Good

Do good performing investments always start out good? The short answer is not necessarily. As proof, we showed ETFguide’s readers a real life example in the June 2015 issue of the ETF Profit Strategy Newsletter. In that issue, we shared an incredible story about a 72-year old investor who converted a $95,000 investment made in two …

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Ocean Waves

Is Elevated Volatility on Modest Losses Normal?

Stock market volatility creeps up when most investors least expect it. But even more intriguing about the latest upward explosion in equity volatility is that it occurred on small percentage losses in major stock index benchmarks like the S&P 500 (NYSEARCA:SPY) and Russell Small Cap 2000 (NYSEARCA:IWM). (Audio) Portfolio Report Card: Diseccting a $1.2 Million …

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A Risky $1.31 Million Portfolio that Flunks on Cost

A few months ago the NASDAQ Composite Index (Nasdaq:ONEQ) eclipsed 5,000 for the first time since March 2000. Put another way, we are all 15 years older since the NASDAQ’s first dance with all-time highs, but are we smarter? What did we learn from the first meltdown that can help us cope with future meltdowns? …

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Conservative Utility Stocks Lose Favor

Last week we told you how dwindling stock market volatility (NYSEARCA:VIXY) and the insatiable appetite for high risk debt (NYSEARCA:JNK) is characterizing the market’s latest episode of fearless risk taking. This time around, there’s another piece of evidence that confirms this scary trend. The chart below shows how S&P 500 utilities (NYSEARCA:XLU) are on the …

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Ocean Waves

Volatility Sleeps, Risk Doesn’t

Higher stock prices (NYSEARCA:DIA) have kept a lid on stock market volatility. The S&P 500 volatility index (ChicagoOptions:^VIX), also known as the “fear index,” has now fallen around 17% over the past month and is back below its 200-day moving average. Does the stock market’s general lack of fear mean that volatility has reached a permanently low …

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Your Investment Portfolio’s Foundation: Where Should it Be Built?

A good investment plan today is better than a perfect plan tomorrow. Unfortunately, most people don’t have either. What about you? Building a healthy portfolio with sustainable and satisfactory performance doesn’t happen by accident. It takes planning and having the proper framework. Phase 1 The process of assembling and managing your investments is comparable to the construction of a building. Before …

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Volatility: Friend or Foe?

Stock market volatility is frequently portrayed as an evil force that all investors should strive to avoid. However, embracing volatility (ChicagoOptions:^VIX) rather than avoiding it can be extremely lucrative. On 12/17/14 we told our subscribers the following via our Weekly ETF Picks: “The VIX has been on a tear, gaining almost 40% since early December. Here’s …

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