• 01 Nov
    GDP Is Up But Stocks Are Down – How You Should Respond

    GDP Is Up But Stocks Are Down – How You Should Respond

    • Inflation is approaching 2% as the current dollar GDP has increased to 4.4%.
    • Both inflation and GDP growth will force the FED to take action – the selloff in yielding assets will continue.
    • Nondurables consumption leads to GDP growth alongside exports and inventories buildups questioning GDP growth sustainability.

    Introduction

    Last Friday, the Bureau of Economic Analysis released the GDP data for Q3 2016. At first, it looked surprisingly good with the GDP growing at an annual rate of 2.9% for the quarter. This is excellent news as it takes the economy out of its anemic growth rhythm seen in the last two years. More →

  • 31 Oct
    REITs – Still A No Go As Risks Are Rising

    REITs – Still A No Go As Risks Are Rising

    • With yields going up, REITs have fallen 10% since the beginning of August.
    • With Italy issuing a 50-year bond at a 2.85% yield, we question the intelligence of the investors who bought them.
    • With REITs you are risking a 50% decline in the next few years for a 3.5% yield.

    What’s Going On With REITs?

    On August 3, 2016, we discussed Real Estate Investment Trusts (REITs) and how they weren’t a great investment at the time. You can read the article that introduces you to what REITs are and their risk and rewards here.

    Since the beginning of August, REITs have fallen by 10% (iShares U.S. real estate ETF – IYR) compared to the S&P 500 which was practically flat. More →

  • 30 Oct
    Sunday Edition: How High Will Gold Go Over The Coming Decade?

    Sunday Edition: How High Will Gold Go Over The Coming Decade?

    Today we are going to analyze the long-term technical picture in the Gold market and introduce you to another nuance of the Elliott Wave Theory. It’s going to get a bit more technical.

    Up to this point we have primarily discussed the basic A-B-C pattern known as a zig-zag which follows the completion of an impulse or motive wave and looks like this: More →

  • 28 Oct
    Is Merger Arbitrage A Good Bet For The AT&T – Time Warner Deal?

    Is Merger Arbitrage A Good Bet For The AT&T – Time Warner Deal?

    • With merger arbitrage, the biggest risk is always that the deal may not go through.
    • The market is currently giving the AT&T – Time Warner deal a 40% chance of success.
    • We’ll share some merger arbitrage insights from Warren Buffett.

    Introduction

    The announcement of the AT&T (NYSE: T) acquisition of Time Warner (NYSE: TWX) in an $85 billion cash and stock deal, was the big topic on the market this week.

    This and other merger and acquisition deals offer the opportunity to make a buck on merger arbitrage. We’ll explain how merger arbitrage is done, what can be gained from it, and what the risks are. More →

  • 27 Oct
    A Global Risk Reward Perspective

    A Global Risk Reward Perspective

    • Emerging markets will grow faster than advanced economies, but there are many investing risks.
    • If a currency is at risk of being devalued 50% against the US dollar, over a decade you’d need an additional 7% yearly return to cover for it.
    • It is less risky to invest in emerging markets when there is pessimism than when there is euphoria.

    Introduction

    The World Bank revised its 2016 global economic growth forecast down to 2.4 percent from the 2.9 percent pace projected in January. The main reason for this downward revision came from lower commodity prices globally and soft investments in developed countries. But what’s important here is the divergence between the growth in emerging versus developed economies. More →

  • 26 Oct
    Millennials! Want To Retire Early? This Is How You Do It

    Millennials! Want To Retire Early? This Is How You Do It

    • Millennials are very interested in investing and come along right in time for baby boomers who need to dump their assets in preparation for a comfy retirement.
    • We’ll discuss a few things Millennials need to know before investing that aren’t often publicized due to conflicts of interest.
    • Beware of fees. Following this piece of advice can save you a cool million in your lifetime, and we’ll show you how just below.

    Introduction

    On Monday we discussed the Next 50, a new index that includes stocks in companies whose primary customers are Millennials (the generation born between 1980 and 2000).

    The Next 50 is an index totally focused on growth, but with some questionable fundamentals and uncertain futures for the companies listed. Nevertheless, investing has become a hot topic amongst Millennials. This is of essential importance to the Baby Boomer generation (those born between 1946 and 1964) as they begin to retire and the need for new investors to pick up their stocks arises. More →

  • 25 Oct
    The First Two Weeks Of Earnings Season Are In. Warnings Ahead.

    The First Two Weeks Of Earnings Season Are In. Warnings Ahead.

    • Don’t be fooled by earnings growth in financials and utilities. The underlying risks are growing too.
    • Lower margins are the first indications of a recession being around the corner. Global government and monetary stimulus make it impossible to know if one will be coming sooner or later.
    • Without buybacks earnings would be terrible.

    The Earnings

    The first two weeks of earnings season have passed and, according to FACTSET, the combined earnings released so far are better than expected but still negative. 23% of the companies in the S&P 500 have reported earnings and their aggregate earnings decline for Q3 2016 is -0.3%. More →

  • 24 Oct
    There’s Now A Millennial Index. Should You Invest?

    There’s Now A Millennial Index. Should You Invest?

    • A new millennial index has been created, the “Next 50.”
    • Valuations are extremely high, but the trends are all in favor of millennial companies.
    • We’ll provide a few investing strategies, so you can choose the best for you.

    Introduction

    Barron’s recently created an index of 50 stocks loved by young American consumers, the Next 50 index. Not surprisingly, there’s also an ETF that tracks millennial stocks, the Global X Millennial Thematic ETF, and we’ll likely soon see a new ETF that tracks the Next 50 index.

    Today we’ll discuss how much of the hype around millennial stocks is significant for long term positive investment returns, and why you should jump on the bandwagon. More →

  • 23 Oct
    Sunday Edition: Agricultural Grains – A Safe & Potentially Very Profitable Long Term Investment

    Sunday Edition: Agricultural Grains – A Safe & Potentially Very Profitable Long Term Investment

    Today we continue with our series on Elliott Wave patterns and how to use them to identify the end of a bear market and the beginning of a new bull market.

    The market we are going to focus on today is food commodities, specifically grains, and we’ll discuss where prices might be headed over the next several years.

    The chart below is a long term chart of wheat which we will use as our proxy for the entire grain market. However, corn, soybeans, and oats all have similar price patterns on their long term charts as well. More →

  • 21 Oct
    Passive or Active Funds? Neither… Sven Has A Better Option For You

    Passive or Active Funds? Neither… Sven Has A Better Option For You

    Whenever you find yourself on the side of the majority, it is time to pause and reflect. – Mark Twain.

    • The biggest market risk comes from money flows. Everything is good while more money is being invested, but withdrawals will create forced asset sales and another bear market.
    • In the last 10 years, 27% of actively managed funds have outperformed the market, but you can increase your chances by choosing a third option.

    Introduction

    In the everlasting debate between passive and active investing, passive investing is currently winning. More money is flowing into passive than actively invested funds, and many celebrate victory and the death of stock pickers. Stock market movements are influenced by money flows and if more money flows into passive funds, they will clearly outperform the competition.

    In today’s article, we’ll take a look at what is going on in the world of actively and passively managed funds, and will discuss a third option. An option that’s cheaper and one where your returns don’t depend on money market flows all that much. More →

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