Top Index Funds for Technology – PSCT, PSI and XSD

 

A performance review of the top index funds for technology paves the way for investing in a lively branch of the stock market. For this purpose, a robust and convenient vehicle for the earnest investor takes the form of an exchange traded fund (ETF).

The market sector dealing with technology tends to be volatile but vibrant; the companies in this category focus on information systems and their applications. Over the past 3 years ending in spring 2016, XSD snagged the best total return – namely, capital gain plus dividend yield; the runners-up were PSI and PSCT. All three bantam funds fared better than XLK which in turn trounced SPY. Over a longer spell, PSCT won the race in terms of capital gains over the past 5 years.

Note: This infographic available in a crisp (high definition) mode in PDF form at MintKit Gist.

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Top Index Funds for Consumer Staples

Performance Review of 

FXG, RHS and PSL

Versus SPY

A performance review of the top index funds for consumer staples paves the way for investing in a sturdy branch of the stock market. For this purpose, a handy vehicle for the earnest investor lies in an exchange traded fund (ETF).

Among the high flyers, FXG bagged the best total return over the past 3 years. Meanwhile RHS triumphed in terms of capital gain over half a decade. PSL placed third in the 5-year race but still outpaced SPY by a hefty margin.

All three dynamos fared better than SPY during the wobble and crash of the bourse in the second half of 2011. From a different angle, RHS advanced at a steady rate compared to its rivals and thus prevailed in terms of risk-adjusted gain over the 5-year stretch.


Note: A crisp (high definition) version of this poster is available in PDF form at MintKit Gist.

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Top ETF Review for Investing in Asia – DBJP, DXJ and CQQQ

Performance of Spearheads 

Versus Mature and Emerging Markets

A review of the top picks in the exchange traded fund (ETF) category is a prudent approach to investing in Asia. On the whole, the stock markets in the budding regions of the world have a way of soaring and plunging far more than their peers in the mature countries. This hallmark applies to the bourses of Asia as much as anywhere else.

Unfortunately, the emerging regions as a whole have fared a lot worse than the U.S. market in recent years. Amid the widespread funk, however, Japan and China have turned into a couple of hotspots on the global stage.

Over the past three years, the best performance was turned in by the MSCI Japan US Dollar Hedged Index fund, which trades in the U.S. under the ticker symbol of DBJP. The total return for the dynamo, given by the sum of capital gain plus dividend yield, came out to an annual gain of 28.15% on average over a 3-year period ending in spring 2015.

During the same timespan, the runner-up was the WisdomTree Japan Hedged Equity ETF. The index fund, which runs under the banner of DXJ, racked up 26.54% a year on average.

Meanwhile the third slot was nabbed by the Guggenheim China Technology ETF, which sports the call sign of CQQQ. The tracking vehicle scored an average gain of 25.92% a year.

By way of comparison, the flagship fund within the mature economies takes the form of SPY. The beacon chalked up an advance of 18.11% a year over the same interval. Meanwhile the heavyweight for the emerging markets lies in VWO, which eked out a mere 4.94% per annum.

From a different slant, a graphic survey of the price action over a longer time frame provides a wholesome view of the markets. For this purpose, a fitting window is a span of half a decade, which is long enough to cover the crash of the stock market in the autumn of 2011 as well as the recovery in the years to follow.

The visual plot serves to highlight the advantage of SPY in terms of ample growth coupled with muted risk over the entire stretch. More precisely, the flagship ETF turned in an admirable showing compared to its rivals in terms of risk-adjusted growth over the course of half a decade.

NOTE: The full briefing is a document in PDF form. The report, titled “Top ETF Review for Investing in Asia”, may be viewed or downloaded here.

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Toolkits and Tollgates for High Growth Markets

 

Sidekicks Trump Primos

During a Gold Rush

in Concrete or Virtual Fields

In the throes of a gold rush, the best strategy for growth – whether in terms of business or investment – is to cater to the swashbucklers on the front lines by way of toolkits and tollgates rather than lead the charge into the unknown. By plying the wildcats in the field with the essentials they need, the sidekicks at the rear can extract a huge share of the bounty reaped in the budding terrain.

On one hand, the heap of opportunities in a flowering market has a way of luring myriads of eager beavers. On the other hand, the mass of firebrands rushing into the wilderness are for the most part destined to flail and flub then flop and fail. The dire fate of the hotheads is a natural consequence of the brutal competition in a scramble open to all comers regardless of germane experience, special savvy, or inborn talent.

By contrast, the context differs entirely for the canny supplier of armaments to the jousters in the field. The armorer can earn a juicy profit by providing the kit required by the combatants bent on bashing each other in their frantic quest for lucre. The advantage of the aide applies to the panoply of domains ranging from mining to farming in the primary sector; from carving to brewing in the secondary branch; from shipping to banking in the tertiary patch.

To spotlight the key concepts, we examine a case study in depth along with a medley of vignettes in brief. The first cameo involves a literal example of a gold rush. A bounteous lode in California gave rise to a stampede of migrants on a global scale for the first time in the annals of history.

More recently, a gold rush of a different kind arose with the upgrowth of digital technology. As usual in a free-for-all, however, the hustlers on the front lines had a rough time trying to hit the jackpot or even make ends meet.

By comparison, the vendors of tools and services had a field day. Thanks to the toll positions they staked out, the sidekicks as a group flourished as the markets bloomed. As a result, the adjuncts in the wings managed to outshine the primos at center stage in the realms of hardware as well as software.

Granted, the go-getters plunging headlong into a lush tract have a way of attracting the bulk of the attention and hoopla along with the financing and glory. On the downside, though, the crunch of competition in a riotous field has a way of quashing most if not all of the dashers on the front lines. As a result the mass of entrants end up losing their shirts, and likewise for the patrons who back the upstarts.

In contrast, a sprouting field has plenty to offer the crafty players working behind the scenes. For this reason, the entrepreneur as well as the investor ought to pay close attention to toolkits and tollgates as a way to ensure sound growth in a booming market.


NOTE: The full report is a document in PDF form under the title of “Toolkits and Tollgates for High Growth Markets”. The briefing may be viewed or downloaded here.

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Skyscrapers Predict Real and Financial Markets

 

A Spurt of Gross High-Rises

Marks an Asset Bubble 

and Portends a Market Crash

A breakout of soaring skyscrapers can presage a crash of the stock market and a recession in the real economy. That is, a bubble in real estate by way of oversize buildings heralds the end of a boom and the onset of a bust. In this way, a rash of record-busting construction serves as a portent of doom during the long-lived cycles in the property market as well as the financial forum.

In the modern era, real estate and financial assets form the bulk of wealth for the population at large. For this and other reasons, the tangible and virtual markets are closely intertwined. In the larger scheme of things, the fortunes of both types of assets depend on the health of the economy at large. In that case, it makes sense for the real and financial markets to display a heap of correlation and even a glob of causality with each other.

In their own way, skyscrapers can serve as beacons for investment planning by spotlighting bouts of excess in the property sector as well as other domains such as the stock market. All too often, an upcast of buildings that set fresh records for height is a glaring sign of froth in the real economy and the financial system. For this reason, the sober investor should pay heed to high-rise projects that make little or no sense from a pragmatic stance. To wit, a spate of record-breaking buildings is a cue for the canny player to rejigger their portfolio and prepare for a blowout in the real and financial markets.


NOTE: The full report is a document in PDF form under the title of “Skyscrapers Predict Real and Financial Markets”. The briefing may be viewed or downloaded here.

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Top 3 Index Funds for Technology – FDN, PNQI and SOXX

 

Triumph of Internet Stocks

A performance review of the top index funds for the technology sector paves the way for investing in a lively branch of the stock market. For this purpose, a robust and convenient vehicle for the earnest investor takes the form of an exchange traded fund (ETF).

In sizing up the performance of the pools, a lengthy timespan provides a wealth of data for a thorough survey. On the other hand, the turnout in recent years is likely to be a better guide to the prospects going forward than the results of the distant past. Given this backdrop, a window of three years seems like a fitting compromise between the contrasting concerns of ample data versus high relevance.

Based on the capital gains over the course of three years, the best index funds in the technology patch go by the ticker symbols of FDN, PNQI and SOXX. Among these vehicles, the first two entries outpaced by a huge margin the chief benchmark of the stock market in the form of SPY. By contrast, SOXX turned in a lackluster showing.

From a different angle, a graphic display of the price history can provide an intuitive grasp of the entrants in the race. The mindful investor has to consider the volatility of the vehicles during the appraisal window as well as the payoff over the entire stretch.

In order to obtain a balanced view of performance, the window of evaluation should cover a spell in which the market has witnessed a boom as well as a bust. For this purpose, a choice timespan is a window of 5 years ending in the late summer of 2014. This interval straddles the crash of the bourse in 2011 as well as the upswell and bounceback of the market that lie on either side of the smashup.

From the longer perspective of half a decade, the standard bearer in the world of index funds – namely, SPY – turned in a capital gain of 92.68%. Another touchstone lay in XLK, the primo within the technology sector, which chalked up a payoff of 97.78%.

Meanwhile the outturn was roughly similar for SOXX, whose return came out to 97.69%. In these ways, the semiconductor fund as well as the technology benchmark managed to edge out SPY by a small margin.

By contrast, FDN bagged a capital gain of nearly 192% over the entire stretch of half a decade. Better yet, PNQI won the derby by snagging a windfall of some 226% over the same period.


NOTE: The full report is a document in PDF form under the title of “Top 3 Index Funds for Technology”. The briefing may be viewed or downloaded here.


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Top 5 Markets for ETF Investing in Europe – Ireland, Switzerland, Belgium, Britain and Nordics

 

Index Fund Performance

for

EIRL, EWL, EWK, EWU and GXF

A performance review of the top markets in Europe sets the stage for investing in a diverse region that includes budding countries as well as mature economies. For this purpose, a robust and convenient vehicle for the worldly investor lies in an exchange traded fund (ETF).

In sizing up the field of index funds, a straightforward tack is to begin with a list of the high flyers. Then other traits such as volatility and liquidity can be brought to bear on the subject in addition to the capital gains.

In order to obtain a balanced view of performance, the window of evaluation should cover a period in which the market has encountered a boom as well as a bust. On one hand, a longish timespan provides a wealth of data for a thorough survey of performance. On the other hand, the turnout in recent years is likely to be a better guide to the prospects going forward than the record of the remote past.

The vale of exchange traded funds has seen explosive growth around the turn of the millennium. Given the welter of saplings, an investor who insists on a long history will thereby rule out a raft of candidates. In this setting, a track record of three years seems like a fitting compromise in trading off the opposing factors of ample data versus plentiful candidates.

With these points in mind, the chosen window spans three years ending in spring 2014. From this standpoint, the front-runners take the form of index funds dealing with Ireland, Switzerland, Belgium, Britain and the Nordic region.

In addition to the return on investment over the entire stretch, a crucial issue concerns the volatility of each vehicle along the way. In gauging the extent of turbulence, a handy aid lies in a concurrent plot of the index funds. For this purpose, a suitable scheme involves a visual display spanning a stretch of 5 years ending in spring 2014.

Based on the capital gains over the past three years, the best vessels sport the ticker symbols of EIRL, EWL, EWK, EWU and GXF. Over this stretch, the index fund for Ireland (EIRL) outpaced the chief benchmark of the stock market – namely, SPY – by a solid margin. On the other hand, the other four vehicles lagged the latter beacon by varying degrees.

Meanwhile, over the longer span of half a decade, the Irish fund beat out SPY by a modest amount. During this period, the turnout for Switzerland (EWL) was comparable to the flagship benchmark of the stock market. By contrast, the remaining three contenders turned in worse results. In particular, Britain (EWU) brought up the rear amongst the top names in the European theater.


NOTE: The full briefing is a document in PDF form. The publication, titled “Top Markets for ETF Investing in Europe”, may be viewed or downloaded here.

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Top Index Funds Based on IPO Stocks – FPX and CSD

Initial Public Offering

 as the Lifeblood of 

 Zesty Funds

The vitality of an initial public offering (IPO) is a compelling approach to growth for an exchange traded fund (ETF). As a rule, a newborn listing in the stock market has a way of outpacing the market averages, especially during the first year of its debut on the bourse. In the combined approach, the robustness and longevity of an ETF can be fortified by the vigor and potential of an IPO.

In the popular image, an IPO refers to the sale of equity to the general public upon the initial launch of a bantam venture on a stock exchange. In the financial community, however, the terminology is also used to denote any type of fresh listing on the bourse.

An example of the latter is a stricken firm whose equity was delisted in the throes of bankruptcy proceedings. If an overhaul of the struggling firm turns out to be successful, then the return of the outfit to the equity market is regarded as the IPO of a reborn stock.

From a different angle, an exchange traded fund is a handy way to participate in diverse markets ranging from equities and bonds to commodities and currencies. In terms of scope, an ETF may cover a broad swath such as a whole industry or even the entire economy. An example of the latter is an index fund based on the flagship benchmark of the stock market; namely, the Standard & Poor’s index of 500 giants on the bourse.

From the converse stance, a communal pool could focus on a compact niche. Examples in this vein range from computer hardware and real estate to precious metals and foreign currencies.

Whatever the choice of market, though, an initial public offering can perk up the return on a portfolio. Since the autumn of the 20th century, a raft of studies have shown that an IPO is apt to outpace the bourse as a whole during the couple of years of its debut.

On the downside, though, the basic equities of operating companies are in general inapt as the primary vehicles for investment by the mass of participants in the stock market. The reason lies in the endless hail of sideswipes and smashups in every industry ranging from mining and shipping to software and banking. The bugbear stems from a fact of life which is ignored by the simplistic models of orthodox finance. In the real world, companies of all stripes break down and go bust all of a sudden, or fade out and die off in slow motion.

By contrast, an index fund is much more likely to lead a long and productive life. The longevity of the vehicle springs from the continual process of renewal as the aging champs within the underlying index are replaced by rising stars in the marketplace. Given this background, the best course of action for the mass of investors is to funnel most or all of their savings into communal pools based on market benchmarks.

On the downside, though, a market index is wont to track the established firms within its field of interest. For this reason, the corresponding pool will contain little or nothing in the way of fledgling ventures.

As we noted earlier, newborn stocks tend to outpace their older peers; and likewise outrun the bourse as a whole. In that case, the canny investor can ratchet up the return on investment by fleshing out a primary position in an ETF in any domain with a secondary stake in one or more budding stocks within the same niche.

An alternative ploy is invest in an index fund that consists entirely of new-sprung stocks. A pioneer on this front lies in a tracking vehicle called the First Trust US IPO Index Fund; the ETF trades under the ticker symbol of FPX. Another spearhead is found in the Guggenheim Spin-Off Fund, which goes by the call sign of CSD.

To place the performance of the vanguards in context, the index funds can be matched against a couple of renowned benchmarks of the stock market. In the larger scheme of things, the Standard & Poor’s index of 500 heavyweights stands out as the leading proxy for the bourse as a whole. Meanwhile the S&P 400 Midcap Index is arguably the standard bearer within the vale of midsize stocks.

Each of the foregoing yardsticks has spawned an index fund of its own. The offsprings carry the ticker symbols of SPY and MDY respectively.

During a window of evaluation stretching from 2006 to 2013, the index funds based on infant stocks – namely, FPX and CSD – beat the prime benchmarks of the stock market by a hefty margin. For instance, CSD trumped MDY by a solid lead despite a modicum of turbulence along the way. Moreover, the overall gain for the live wire was more than twice the payoff of 37% for SPY.

The story was similar for FPX only better. On a negative note, the dynamo was a tad more volatile than SPY as well as MDY. On the upside, though, the cumulative gain for FPX over the entire stretch was about 29% higher than the copious bounty bagged by CSD.


NOTE:  The full briefing is a document in PDF form. The report, listed under the title of “IPO as a Growth Mode for an Exchange Traded Fund”, may be downloaded here.

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Midcap ETF Review for CSD, RPV and RYJ

 

Performance of Top Index Funds

Given the attractions of an exchange traded fund, a midcap ETF review for the stock market paves the way for investing in lusty firms of moderate size. For this purpose, the first order of business is to select a timespan for sizing up the returns on investment.

On one hand, a lengthy window of observation provides a heap of data for a thorough analysis of performance. On the other hand, the broad-based approach has its drawbacks as well. One stumper springs from the dynamism within the financial forum. Due to the explosive growth of index funds in the millennium, a prolonged timespan has the side effect of brushing aside numerous entrants that have stepped into the arena only in the recent past.

For this reason, the wily investor has to strike a balance between the conflicting factors in order to pick an apt window of evaluation. In striking a compromise, a time frame of three years seems like a fitting choice in general.

From a different stance, the financial crisis of 2008 was a watershed in the global economy. In recognition of the landmark, a duration of five years ending in spring 2013 has the advantage of spanning the epic blowup and its aftermath. For this reason, the longer window of half a decade can provide a host of pointers on the true nature of motley markets.

In addition to grasping the price action in the arena, the wise investor takes into account a number of additional factors relating to the short run as well as the long range. A case in point is a modicum of liquidity needed for the artful player to enter and exit a given market in a timely fashion.

A second hallmark of the savvy investor lies in an aversion for levered vehicles. The reason stems from the constant threat of sudden death and/or gradual demise that dogs any type of rickety scheme based on high gearing. Due to the specter of certain doom, only a heedless speculator lusts after shaky contraptions pumped up by the gimmicks of leverage. In other words, the wise investor relies only on sturdy rigs that move with the target market in a direct and forthright way.

In sifting through a database of index funds focused on midsize firms, a straightforward approach is to begin with a muster of the front-runners in the field. Then the other factors such as liquidity and risk can be brought to bear on the appraisal.

In line with this thrust, we begin with a tally of raw performance over the course of three years ending in the autumn of 2013. The resulting list of candidates can then be whittled down further by a couple of secondary screens. As we noted above, the first filter deals with the liquidity of the ETF in the marketplace. Meanwhile the second criterion concerns the directness of the setup; that is, the absence of leverage.

Based on this regimen, the top 3 index funds turned out to be CSD, RPV and RYJ. The purpose of these pools is to keep pace with their respective benchmarks: the Beacon Spin-off Index, the S&P Pure Value Total Return Index, and the Raymond James SB-1 Equity Index.

Among these pacers, CSD turned out to be the clear winner. Moreover the return on investment for the spearhead displayed a series of higher peaks as well as rising troughs over the span of half a decade.

Of the pair of runners-up, the average payoff for RPV over the past three years was comparable to that for RYJ. On the other hand, the former pool broke down more severely than the latter during the financial flap of 2008. After the smashup, though, RPV for the most part kept up with its rival and managed to eke out a slightly better performance in recent years.

To place the turnout of the high flyers in context, the eagles were compared against a couple of renowned benchmarks of the stock market. Looking at the big picture, the Standard & Poor’s index of 500 giants stands out as a popular proxy for the bourse as a whole. Meanwhile the S&P 400 Midcap Index is arguably the leading beacon within the vale of midsize stocks.

Each of the foregoing yardsticks has spawned an index fund of its own. The offsprings carry the ticker symbols of SPY and MDY respectively. On the upside, the trio of winning funds for midcap stocks – namely, CSD, RPV and RYJ – trumped the popular benchmarks of the bourse by a solid margin.

NOTE: The full report is a document in PDF form. The publication, listed under the title of “Midcap ETF Review for Investing in Top Markets”, may be downloaded here.  

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ETF Review of Top 3 Picks for Consumer Cyclical Stocks – XRT, PEJ and XHB

 

Comparison of Fund Performance

for

XRT, PEJ and XHB 

A review of the top performers is a springboard for sound investing in consumer cyclical stocks by way of an exchange tradedf fund (ETF). To pick out the best choice of index fund, the first step is to round up the front-runners. In sizing up the firebrands, the key gauges include the speed of capital gains and the extent of price volatility

To this end, a basic criterion involves the rate of return over the past few years. On the other hand, a lot of index funds are relative newcomers to the field. For this reason, a prober who insists on a lengthy history will exclude a raft of candidates. At this early stage in the upgrowth of exchange traded funds, a fitting compromise between the length of the track record and the size of the candidate pool is a life span of 3 years.

For our purpose here, the period of evaluation straddled three years ending in the summer of 2013. During this stretch, the best performance was turned in by an exchange traded fund based on the S&P Retail Select Industry Index. The communal pool, which sports the ticker symbol of XRT, chalked up a gain of 30.92 percent a year on average.

The runner-up in the sweepstakes was a vehicle tied to the S&P Homebuilders Select Industry Index. The dynamo, which flies under the banner of XHB, managed to snag an average return of 29.73% per year.

Meanwhile the bronze metal in the race went to the PowerShares Dynamic Leisure & Entertainment fund. The hustler, branded as PEJ, snapped up a yearly gain of 28.46%.

In order to obtain a better sense of the performance figures, we need to put the results into a larger context. For this purpose, the benchmark of choice among professional investors lies in the Standard & Poor’s index of 500 titans listed on the stock market.

The latter yardstick is tracked with remarkable accuracy by an exchange traded fund that runs under the banner of SPY. The tracking vehicle turned in a bounty of 18.87% a year on average over the course of three years.

To sum up, the third place in the rankings was claimed by PEJ which surpassed the chief benchmark of the market by nearly 10% a year. By contrast, the outcome for XHB turned out to be a mite better by about 1%. Finally, the payoff for XRT was higher still by another percent or so.


NOTE: The full report is a document in PDF form. The resource is available here: Top ETF Review for Consumer Cyclical Stocks.


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Smallcap ETF Review – Top 3 Index Funds for Healthcare, Energy and Growth Stocks

 

 Index Fund Performance 

 for 

 PSCH, PSCE and IJT 

Given the drawcards of an exchange traded fund, a smallcap ETF review for the stock market lays the groundwork for investing with finesse in bantam firms. To this end, the first order of business is to select a suitable timespan for sizing up the candidates.

On one hand, a lengthy window of observation provides a heap of data for a thorough analysis of performance. On the other hand, the broad-based approach has its drawbacks as well. One stumper springs from the dynamism within the financial forum. Due to the explosive growth of index funds in the millennium, a prolonged timespan has the side effect of casting aside numerous entrants that have stepped into the arena only in the recent past.

For this reason, the wily investor has to strike a balance between the conflicting factors in order to pick an apt window of evaluation. In striking a compromise, a time frame of three years seems like a fitting choice in most cases.

From a different stance, the financial crisis of 2008 was a watershed in the global economy. In recognition of the landmark, a duration of five years ending in spring 2013 has the advantage of spanning the epic fiasco and its aftermath. For this reason, the longer window of half a decade can provide a host of pointers on the true nature of motley markets.

In addition to grokking the price action in the arena, the deft investor takes into account a number of additional factors relating to the short run as well as the long range. A case in point is a minimal level of liquidity needed for the artful player to enter and exit a given market in a timely fashion.

A second hallmark of the savvy investor is an aversion for levered vehicles. The reason lies in the constant threat of sudden death and/or gradual demise that besets any type of rickety scheme based on high gearing. Due to the specter of certain doom, only a heedless speculator lusts after shaky contraptions pumped up by the gimmicks of leverage. In other words, the sober investor relies only on sturdy rigs that move with the target market in a direct and forthright way.

In sifting through a database of index funds focused on smallish firms, a straightforward approach is to begin with a muster of the front-runners in the field. Then the other factors such as liquidity and risk can be brought to bear on the appraisal.

In line with this thrust, our search begins with a tally of raw performance over the course of three years ending in spring 2013. The resulting list of candidates is then whittled down by the duo of secondary screens. As we noted above, the first filter deals with the liquidity of the asset in the marketplace. Meanwhile the second criterion concerns the directness of the setup; that is, the absence of leverage.

Based on this routine, the top 3 index funds turned out to be PSCH, PSCE and IJT. These pools focus respectively on the healthcare sector, energy market, and growth stocks.

Within the ranks of acceptable funds based on bantam stocks, PSCH turned out to be the clear winner. The return on investment for the spearhead displayed a series of higher peaks as well as rising troughs over the span of three years following its debut in the stock market in spring 2010.

Of the pair of runners-up, the average payoff for PSCE was comparable to the turnout for IJT. On the other hand, the latter vehicle was a lot less volatile compared to the former. For this reason, IJT was the better choice for the genuine investor.

To place the performance of the high flyers in context, the eagles were compared against a couple of renowned benchmarks of the bourse. Looking at the big picture, the Standard & Poor’s index of 500 giants stands out as a popular proxy for the stock market as a whole. Meanwhile the Russell 2000 Index is arguably the leading beacon within the vale of bantam stocks.

Each of the foregoing yardsticks has spawned an index fund of its own. The offshoot vehicles carry the ticker symbols of SPY and IWM respectively. On the bright side, the trio of winning funds for smallcap stocks – namely, PSCH, PSCE and IJT – trounced the standard benchmarks of the bourse by a comfortable margin.


 NOTE: The full briefing is a document in PDF form. The publication, titled “Smallcap ETF Review for Investing in Top Markets”, may be viewed or downloaded here.

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Thailand ETF Review Featuring a Top Stock Market in Asia

 Index Fund Performance for THD 

 Versus Benchmarks for 

 Mature and Emerging Markets 

In picking an index fund bound for growth, a review of the exchange traded fund (ETF) for Thailand sets the stage for investing in a top stock market in Asia. For this purpose, the vehicle of choice is an ETF that trades in the U.S. under the ticker symbol of THD.

As with budding markets in general, the bourse in Thailand is wont to thrash around a lot more than those of the mature regions. For this reason, the volatility of the market is as important as the return on investment in sizing up the corresponding fund.

On the upside, THD has turned in a rousing performance over the past few years in spite of the stormy weather kicked up by the financial crisis of 2008 and its aftershock. On one hand, the index fund crumbled more than the broad benchmarks of the emerging markets as a whole. Despite the smackdown, however, THD regained its vigor in short order and continued to trudge higher in the years to follow.

From a larger stance, the benchmarks of the emerging regions have been unable to recover fully from the pounding they received during the financial flap. As a result, the tracking funds for the sprouting markets have lagged behind the foremost benchmark of the bourse used by professional investors.

Despite the poor showing of the emerging regions in general, Thailand has managed to outshine its peers. Granted, the stock market did encounter a number of setbacks along the way. A case in point was the takedown prompted by the crash of the American bourse in the autumn of 2011.

By contrast to their usual behavior, the emerging regions as a group have fared worse than the U.S. market in recent years. Even so, Thailand has turned out to be one of the bright spots on the global stage.

In short, the exchange traded fund for Thailand has turned in a sparkling performance since the financial crisis and its fallout. On one hand, THD has been somewhat more volatile than the broad-based vehicles for the emerging regions; in particular, the index funds sporting the labels of EEM and VWO. In line with their usual behavior, the latter vehicles were in turn more flighty than the flagship pool for the mature markets; namely, the tracking vehicle known as SPY.

On the bright side, though, the exchange traded fund for Thailand has outpaced SPY by a hefty margin over the span of half a decade, and likewise for the past few years. Given this backdrop, many an investor would have done well to trade off a modicum of turbulence in return for the windfall turned in by THD.


NOTE: The full briefing is a document in PDF form. The publication, titled “Thailand ETF Review for a Top Stock Market in Asia”, may be viewed or downloaded here.

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Gold ETF Forecast for the Springtime of the 21st Century

 

Cycles of Boom and Bust

for the Commodity and

Top Exchange Traded Funds

A forecast of the top exchange traded fund (ETF) for the gold market sets the stage for an orderly approach to investing in precious metals. In drumming up an agenda, the main vehicles for investment fall into two broad classes: the commodity itself versus the producers within the mining industry. Naturally, each mode of transport comes with its own combo of strengths and drawbacks.

In order to sketch out the prospects downstream, the deft investor looks first in the opposite direction. On one hand, the conditions of the past will never be fully duplicated in the future. Even so, the crucial features of the market are sure to crop up again and again as time goes by.

As in other parts of the economy at large, a watershed in the gold market popped up with the financial crisis of 2008 along with the Great Recession. The severe conditions of the debacle, followed by the fitful recovery of the markets in its aftermath, laid bare the raw fibers of the financial forum and the real economy.

Looking to the future, the demand for gold is slated to burgeon until at least the second half of the 21st century. The lusty trend is the prime mover behind the yellow metal over the long haul. On the other hand, the market is sure to be battered along the way by an endless hail of upthrows and downcasts.

From a larger stance, the buildup of the global economy fuels a groundswell of demand for gold. The uplift is of course a godsend for the producers of the commodity. If prices are rising, then profits should increase for the industry as a whole over the short term as well as the medium range. Over the long run, however, the inrush of newcomers in a budding field – along with the rigors of competition – can lead to the squelch of earnings for the entire cast both old and new. The cruddy outcome is an example of the distinction between the fortunes of the commodity and its producers.

These and other factors play a vital role in sizing up the prospects for the gold market. As a first step in sorting out the muddle, a primal task is to examine the behavior of the marketplace during the tumultuous period that straddled the financial crisis and its aftermath. A second thrust lies in the difference between the movements of the raw commodity versus the antics of the mining stocks. A third function is to map out the key features of the gold market over the years and decades to come.

Since the turn of the millennium, the golden metal has enjoyed a prolonged upswell in spite of the occasional setback. A case in point was the ascent that started in early 2010 and lasted until it faltered in the latter part of the following year. 

For the bulk of investors, the main vehicle for tracking the commodity lies in an exchange traded fund sporting the ticker symbol of GLD. Looking downrange, the next milestone for the index fund stands at its previous peak of some $185 per ounce. As things stand, the latter landmark will be reached in 2013. This objective lies $35 above the current support at the $150 level. In fractional terms, the increase amounts to a gain of some 23% in short order.

After regaining its previous summit, GLD will take a breather before pushing ahead once more. On current trends, the vehicle should reach a sizable barrier at the $185 mark by the following winter. 

Shortly afterward, the commodity itself will touch a price of $2,000 per ounce in the commercial market. The big round number will then kindle a gale of excitement from the mass media and the investing public.

To add to the bluster, a ragtag conga of talking heads will sashay out of the woodwork. The self-proclaimed swamis will declare that the prospects for the metal are not only bounteous but simply boundless.

The outburst of hype will drive the metal higher in the futures market that serves as the touchstone for commercial transactions in gold bullion. In that case, the tracking fund in the stock market will of course follow suit. In the dash to the upside, the next hurdle for the ETF is a price level of $195 per share.

After hitting that target, the stock will fall back toward the $185 zone. Shortly afterward, the ETF should regain its vigor and zoom past $195 within a matter of months.

The next milepost is a hefty barrier at the $220 level. The latter objective lies another $35 past the first milestone at $185. In relative terms, the advance comes out to a hike of a tad under 19%.

After reaching that outpost, GLD will stagger back toward the previous hurdle at $195. Before long, though, the rig will muster enough energy to push ahead once more. All that will take us through 2014 and into the middle of this decade.

By contrast to the raw commodity, the turnout for the mining firms depends more on the hoopla amongst the punters on the bourse than the outlook for either the yellow metal or the stock market at large. When GLD pushes past its prior peak, however, the investing public will once again chase after mining stocks.

In due course, the value of the metal in the commercial market will break through the psychic barrier at $2,000 per ounce. The resulting spate of breathless reports from the mass media will then rouse the general public into a frenzy.

Soon thereafter, the index funds for the mining firms will pare back their losses to date and shoot past their previous peaks. The surge of the mining stocks will draw in a deluge of cash from all quarters, including myriads of plungers who had never before heard about GLD, let alone the index funds for the mining firms.

And so a bubble will duly form as the madding crowd rushes into the arena for a piece of the action. At this stage, however, the savvy players in the ring will begin a gradual process of withdrawal from the futures market for gold bullion as well the index funds for the mining firms.

As the bonfire in the bazaar begins to sputter, a growing cohort of antsy players will wonder whether the uptrend in gold has run its course. And soon enough, the specter of a smashup will turn into a reality.

The ensuing crash of the market will of course deal a body blow to the mass of latecomers to the game. The first big punchout is likely to occur around 2015 or so.

Even so, the fiasco will not mark the end of the boom in gold by a long shot. After wallowing in a funk for a couple of years, the commodity will be ready to stage a bigger comeback.

As the market tramps upward and pushes past one milepost after another, millions of newcomers will jump on the bandwagon. In a fit of delirium, the gamesters in the ring will drive the metal to batty levels rivaled only by the lunacy of the Internet fever during the 1990s.

Swept aloft by the uproar, the sizzling metal will not only reach fat round numbers like $5,000 per ounce but zip right past them. There’s a good chance that figures of this magnitude will spring up by the second half of the 2010s.

Moreover the beefy prices will comprise mere waystations on a multistage journey to the $10,000 level. The latter target is likely to be reached around the 2020s.

By contrast to the raw commodity, the index funds for the mining firms depend largely on the mood of the investing public rather than the action in the commercial market. In the throes of a feeding frenzy, the equities of the major producers could vault by tenfold or more within a matter of years. Meanwhile the index fund for junior miners is apt to explode in excess of a hundredfold beyond its initial peak. 

Such is the wild ride that awaits investors of all stripes in the arena. In these ways, the antics of the gold market in the decades ahead will eclipse the tidal waves of boom and bust in all previous eras.


Read more on Gold ETF Forecast for the Springtime of the 21st Century.

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Market Forecasting

Prediction of the
Financial Forum and Real Economy

Forecasting paves the way for a wholesome program of investment, whether in the financial markets or the real economy. To this end, the techniques of prediction run the gamut from the simple and casual to the complex and formal.

On the scale of rigor, the low end of the range includes a hunch by an investor that a newborn technology will create a vibrant market and render obsolete a mature industry. Meanwhile the opposite end of the spectrum is showcased by a software agent that predicts the price of a stock and learns from its mistakes in order to improve its performance over time.

An investor who wants to divine a market of any sort faces a daunting task. The stumbling blocks include the whims of human actors and the flukes of natural forces. A case in point is a ramp-up of the stock market to ditsy heights by a horde of berserk traders. Another sample involves the smackdown of a regional economy by a monstrous earthquake that knocks out a swath of manufacturing plants and power grids.

In a world racked by chance and chaos, the hapless investor is hard-pressed to peer into the future with any measure of confidence. Even so, the lack of clarity does not mean that anything goes. On the contrary, anyone with a smidgen of sense knows that some things are more likely to crop up than others.

In that case, a glimpse of the future is a matter of degree rather than category. For this reason, the meaningful question is not whether prediction is feasible, but to what extent the task can be achieved.

In a way, the forecaster encounters the same type of challenge in selecting a technique for prediction. More precisely, the apt approach happens to be relative rather than absolute. The best choice of method depends on a bunch of factors including the skills of the user and the thrust of the application.

To begin with, each approach has its strengths and drawbacks. Moreover a given method may work like a charm in the hands of one user but not another. For these and other reasons, the shrewd player weighs a variety of techniques before deciding on the right tool for the job in forecasting a market of any sort.

Read more on Market Forecasting.

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Boosting an ETF with an IPO

 

How an Initial Public Offering
Can Fortify an Exchange Traded Fund

 

A dandy way to excel in the stock market is to beef up an exchange traded fund (ETF) with an initial public offering (IPO). By this means, the efficiency and longevity of an ETF can be bolstered by the peppy performance of an IPO.

For the bulk of investors, an exchange traded fund is the best vehicle for participating in motley markets ranging from equities and bonds to currencies and commodities. In terms of scope, an ETF may cover a broad swath such as an entire industry or the global economy at large. A case in point is an index fund based on the flagship benchmark of the stock market; namely, the Standard & Poor’s index of 500 stalwarts on the bourse.

Looking in the opposite direction, a communal pool could focus on a compact niche. Examples of this stripe run the gamut from computer hardware and real estate to foreign currencies and precious metals.

Whatever the choice of market, though, an initial public offering can perk up the return on a portfolio. Since the autumn of the 20th century, a raft of studies have shown that an IPO is wont to outpace the bourse as a whole during the first year or two of its debut.

On the downside, though, the basic equities of operating companies are in general inapt as the main vehicles for investment by the bulk of players. The danger lies in the vulnerability to bombshells in every industry ranging from mining and shipping to software and banking. The menace springs from a fact of life which is ignored by the simplistic models of financial economics. In the real world, companies of all stripes trip up and go bust all of a sudden, or fade out and die off in slow motion.

By contrast, an index fund is much more likely to lead a long and productive life. The longevity of the vessel springs from the ceaseless process of renewal as the flagging members of the pantheon are replacing by the rising stars in the marketplace. For this reason, the best course for the prudent investor is to funnel most or all of their savings into communal pools based on market benchmarks.

On a negative note, a market index is wont to track the established firms within a particular domain. In that case, the corresponding fund will contain little or nothing in the way of newborn ventures.

On the upside, though, the fresh-faced stocks tend to outpace their older peers; and likewise outrun the bourse as a whole. For this reason, a canny investor can perk up the return on investment by fleshing out a primary position in an ETF with a secondary stake in one or more fledgling stocks within the same niche.

For the sake of concreteness, we examine these ideas by way of an ETF in the energy sector along with examples of IPOs in the target domain. The case study involves an index fund for a master limited partnership (MLP), a type of vehicle which is highly suited for the sober investor bent on sound returns at low risk. In this corner of the stock market, the standard bearer lies in an exchange traded fund that trades under the ticker symbol of AMLP.

Read more on Boosting an ETF with an IPO.

 

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How to Invest in Gold ETFs

 

Top Exchange Traded Funds

for the

Commodity and Its Producers

 

 

A handy way to invest in gold is to take up communal vehicles known as exchange traded funds (ETFs). The mission of the funds is to track the market for gold via direct or indirect means. In the upfront approach, a communal pool holds a stockpile of gold bullion. For the oblique mode, the custom is to hold the stocks of companies engaged in the mining industry by way of exploration, extraction or other functions.

This article examines the top 3 exchange traded funds for the gold market. The first pool takes the direct approach by amassing a trove of the raw commodity. Meanwhile the other two vehicles rely on the indirect tack by holding stakes in the equities of the leading firms in the field.

 

Read more on How to Invest in Gold ETFs.

 

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Best Timespan for Market Analysis

Guide plus Showcase

of Exchange Traded Funds

for Emerging and Developed Markets

The best choice of timespan for a performance review depends on the status of the investor as well as the state of the market. In this way, a fitting window in the backward direction is closely tied to the planning horizon going forward coupled with the likely conditions downrange.

In that case, the impact of an unusual event in the past ought to be downplayed or excised entirely. To this end, one approach is to select a short window that excludes the exceptional fluke. The second ploy is to pick a prolonged stretch that serves to dilute the impact of the aberrant case on the marketplace.

Depending on the context, the investor may have scant choice regarding the use of one approach or the other. An example involves a youthful asset which has little to offer in the  way of a price history. In that case, the use of a prolonged window is out of the question.

An apt choice of timespan applies to any type of market, whether tangible or virtual. An example is found in a lonesome stock or a personal portfolio, a raw commodity or a national economy.

In the modern era, a glaring anomaly cropped up with the financial crisis of 2008 and its aftermath. The bombshell sparked the worst smashup of the financial system since the Great Depression of the 1930s, along with the biggest flop of the global economy since the Second World War. As a result, the blowup was an oddball on a whopping scale which is unlikely to recur in the near future.

Given this backdrop, a wanton choice of time frame for market analysis could lead to warped results which have scant relevance to the prospects downrange. In that case, the cogent approach is to tone down or cut out the extreme effects resulting from the financial catastrophe.

These issues are examined by way of a case study dealing with exchange traded funds for the emerging regions as well as developed markets. The quartet of index funds under review includes a couple of vehicles which in some sense straddle the entire planet. By contrast, the remaining two vessels focus on a pair of individual countries; namely, the U.S. and Britain which serve as spearheads of the financial forum and the real economy for the world at large.

Read more on Best Timespan for Market Analysis.

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Market Timing via Monthly and Holiday Patterns

 

A Free Lunch in the Stock Market 

The stock market displays a medley of patterns that can serve as the crux of a timing strategy. A showcase lies in the oft-seen surge of the market around the turn of the month as well as the run-up to a holiday.

As with all things, the timing strategy does have its shortcomings. An example involves the need to dart in and out of the market more than a dozen times a year in order to take full advantage of the patterns.

Another drawback stems from the higher rate of income tax on short-term profits as opposed to long-run gains in the stock market. The precise impact will of course depend on the specific circumstances such as the trader’s country of residence.

Despite of the hassles, though, trading with the calendar can deliver a higher payoff at less risk than the humdrum policy of buying stocks and holding them indefinitely. For this reason, a timing strategy based on monthly cycles and market holidays represents a free lunch on Wall Street.

Read more on Market Timing via Monthly and Holiday Patterns.

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Forecasting Crashes of the Stock Market

 

Impact of Cycles versus Bubbles

at the

Dawn of the 21st Century

 

The stock market can crash whether or not a bubble exists. A showcase was the smashup of 2011 which popped up in tune with the long-range pattern of bombshells but otherwise without any good reason.

The pointless breakdown had one positive outcome. Given the confirmation of the running sequence of crackups, the schedule of flaps appeared to be on track in spite of the partial derailing linked to financial crisis of 2008.

For the wordly investor, the main event of 2011 was the blowup of the stock market in the U.S. and elsewhere, along with the bedlam in kindred fields such as commodities and currencies. As is often the case, the mayhem caused by the participants in the arena – be they part-time amateurs or full-time professionals – was for the most part a premature and avoidable ordeal for the entire community.

The teardown of the markets was prompted by the specter of a full-blown recession in the global economy within half a year or so. One reason for the jitters stemmed from the fitful progress of the industrial nations such as the United States, Britain and Japan. Another factor lay in the brouhaha over the debt crisis in Europe, along with widespread fears of a breakup of the euro along with the collapse of the regional economy.

For a number of years, the politicians in the developed world had been going out of their way to prop up the distortions in the marketplace that arose during the run-up to the financial crisis of 2008. Instead of prolonging the malady, the politicos ought to have left the economy alone to heal itself. Better yet, public policy could have helped to undo the damage done throughout the entire meshwork of production and distribution. Thanks to the counterproductive moves of the pols, however, the economy was doomed to struggle and flail for many years to come.

On a positive note, the crash of the stock market in 2011 showed up in sync with the long-running schedule of meltdowns. For this reason, the sequence of blowups appeared to be on track despite the partial derailing linked to financial crisis of 2008. As a consequence, the next crackup of the bourse could well occur around 2017 in line with the ongoing chain of flaps in the modern era.

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Note: This report is a revised and extended version of an article published last year titled Forecasting the Next Crash of the Stock Market. The new publication is available in a variety of formats ranging from HTML to PDF. A popular form lies in the EPUB standard favored by many devices including Apple products such as the iPad. A variant of EPUB is the MOBI version used by Amazon Kindle. Further details on the report are available by clicking the image to the right.

 

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Performance of Energy ETFs

 

Comparison of Top Exchange Traded Funds
for Equity and Commodity Markets

 

The exchange traded funds (ETFs) for the energy sector include vehicles for tracking the price of crude oil in the commercial market as well as the equities of operating companies listed in the stock market. Among the index funds in this sector, a stalwart lies in United States Oil; the exchange traded fund is listed on the U.S. bourse under the ticker symbol of USO. On the other hand, the primo focused on the equity market is found in the Energy Select Sector SPDR, which flies under the banner of XLE.

This articles examines the performance of the two beacons over the span of 5 years ending in spring 2012. On one hand, the energy branch of the stock market has a bunch of unique properties due to its heavy reliance on the fortunes of crude oil in the real economy. Despite the close linkage to the physical market, though, every exchange traded fund is also an equity traded on a stock exchange.

For this reason, a vital question for the worldly investor is the performance of USO and XLE compared to the stock market at large. In the latter case, the flagship fund for the equity market as a whole lies in the tracking vehicle for the S&P 500 index; the exchange traded fund goes by the symbol of SPY.

Given this backdrop, we examine the performance of USO and XLE and compare the results against the turnout for SPY. In the appraisal, the key criteria take the form of volatility, payoff, and risk-adjusted gain.

 

Read more on Performance of Energy ETFs.

 

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