Blog Archives

Utilities, Anyone?

With 2016 officially half over, the celebratory nature of the stock market is being masked by another telling trend: Defensive sectors are outperforming higher risk areas.

Formerly hot groups drenched with elevated risk like solar energy (NYSEARCA:TAN) and biotechnology stocks (NasdaqGS:IBB) have fallen out of favor and are down more than 20%,

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Sexy vs. Boring: Who’s Winning?

Higher investment risk leads to higher investment returns, right? It’s a Wall Street axiom that we’ve heard so many times it’s become ingrained in us. But conventional wisdom and reality have the peculiar habit of departing from one another. And what’s happening in 2016 is a noteworthy example of this grand departure.

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Should You Make Portfolio Decisions Based Upon Historical Correlations?

Market correlations explain to us the similarity in performance and behavior by different types of assets.

For investors,  correlation comparisons might be between two commodities (NYSEARCA:DBC), two stocks, a stock and a commodity, or even a stock and an index. Should correlations be used to make investment decisions?

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Is this the Beginning of the Great Bond Exodus?

Never mind the outstanding performance that long-term U.S. Treasury ETFs (NYSEARCA:TMF) delivered last year, ETF investors are bailing on bonds.

(Audio) Listen to Ron DeLegge @ The Index Investing Show

The latest data on ETF asset flows show that five bond funds are among the top 10 ETFs with money leaving.

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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 verge of cracking below their 200-day moving average.

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