U.S. stocks had their biggest rally in a year yesterday. The S&P 500 has now recovered in a blink: a 4.1 percent rise since Oct. 15, reversing a 7.5 percent drop.
Bummer. Long-term investors barely had a chance to jump on one of the market’s best buying opportunities in years. They've been waiting for discounted stocks for a long time. The S&P 500 hasn’t had a bargain bin since a couple brief drops in 2012. Neither met the definition of a correction, a drop of 10 percent or more. The last extended double-digit declines were in 2011.Read more »
"Ishtar," the 1987 movie starring Warren Beatty and Dustin Hoffman, seemed like a surefire hit on paper. At the box office? $14 million. It is the go-to emblem of disaster.
We go to it here because giant flops happen in the ETF world, too. Sure, many exchange-traded funds fail to collect assets, and more than 500 have less than $30 million, the failure fault line. Some, though, came out with a lot of hype or with a really novel investment idea, and in the end no one cared.Read more »
Can Goldman Sachs put ETF investors on a liquid diet?
Goldman is in talks to acquire IndexIQ, Reuters has reported. Index IQ is a small exchange-traded-fund firm known mostly for products that replicate hedge fund strategies, called "liquid alternative" ETFs. While IndexIQ has 11 ETFs with $1.2 billion in assets, over 80 percent of those assets are in liquid alt ETFs. These products use the same complex strategies that many hedge funds do, such as betting on or against futures contracts in commodities or currencies. But unlike with hedge funds, investors can get in and out of the funds daily -- hence their name.Read more »
With financial markets at risk of losing their monthly dose of bond-buying from the Federal Reserve soon, the market's recent gyrations could signal far more volatility to come. And if it does, a handful of actively managed exchange-traded funds are standing by to benefit. These niche ETFs were created to provide shelter, or generate profits, from market downturns, a strategy that hasn't been in high demand during a long bull market.
If the stock market’s extreme swings continue, or deepen, investors will be hearing more about these ETFs.Read more »
People pay financial advisers thousands of dollars a year to pick investments, rebalance portfolios, adjust risk levels and minimize taxes. And these are all things that computers are learning to do more quickly, more reliably, at a quarter of the cost and with flashier graphics.
A funny thing is happening on the way to total automation, though. While new “robo-advisers” pop up regularly, many are relying on flesh-and-blood advisers. They're finding a human with a sophisticated computer system can be better at winning trust than an algorithm alone. That highlights the big question for investors and their advisers: How much is the human touch worth? At a time when 0.25 percent will build a perfectly adequate investment portfolio, advisers need to justify fees that can top 1.5 percent.Read more »
Two big banks today with one clear message: Housing bulls beware.
Earnings reports this morning from JPMorgan Chase & Co. (JPM) and Wells Fargo & Company (WFC) revealed significant declines in mortgage activity. JPMorgan originations fell 48 percent compared to the same period last year, while Wells Fargo applications dropped 26 percent. Given that Wells Fargo typically underwrites one quarter of the nation's mortgages during a given quarter, this weakness is significant.Read more »
Joshua Brown, CEO of Ritholtz Wealth Management, is known for a lot of things -- television appearances, tweeting as @downtownjoshbrown to his 86,000 followers, a widely read blog and his story of going from a commission-based broker to a fee-based adviser. It's a story captured perfectly in the name of his website: TheReformedBroker.com.
Brown, whose often-colorful commentary covers all things Wall Street, knows a lot about exchange-traded funds. He should, since the firm he co-founded with Bloomberg View columnist Barry Ritholtz last year uses them extensively. Ventured & Gained spoke with Brown after his keynote speech at ETF Boot Camp, a two-day event about all aspects of bringing new ETFs to market, hosted by ETF Trends. Here are edited highlights of the conversation.Read more »
Here's something we haven't seen in 20 years: Small-capitalization stocks have come completed unglued from their large-cap counterparts.
These two extreme segments of the market have tended to trade in tandem, generally rising and falling together over time. This year however, data from Strategas Research Partners indicates that only 40 percent of the stocks in the S&P Smallcap 600 Index are currently in an uptrend, compared to 72 percent for the S&P 500 Index.Read more »