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Showing posts from 2015

The ETF Monkey 2016 Model Portfolio: Vanguard, Fidelity & Charles Schwab Implementations

A brief update on this project for Seeking Alpha.
After introducing The ETF Monkey 2016 Model Portfolio, I followed up with three actual implementations of the portfolio, using ETFs which you can trade commission-free if you are a client of either Vanguard, Fidelity, or Charles Schwab. Here are the three articles:
Vanguard
Fidelity
Charles Schwab

Introducing The ETF Monkey 2016 Model Portfolio

Just completed my latest article for Seeking Alpha. I am happy to say that it was selected as an Editors' Pick.

Here are the high-level bullet points:

For the past couple of weeks, I have been reading extensively through the 2016 investment outlooks of top-quality research firms.In this article, I will present six themes that I gleaned from my research. Ultimately, I will assign weightings and present The ETF Monkey 2016 Model Portfolio.In future articles, I will develop ETF-based portfolios based on this model, from three major providers.
If you are interested in reading further, here is a link to the article.

Made the 'ETF Analysis' Leader Board at Seeking Alpha!

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Just wanted to say a hearty "thanks" to all my readers, both here and on Seeking Alpha! I feel a deep sense of gratitude.

Largely based on the amazing strength of this article, I finally broke the ranks of the Top-5 authors in the 'ETF Analysis' category. The article actually vaulted me from #9 all the way to #3!


With your continued support, I hope to be able to keep up my work.

Author's Note: If you find my work valuable, I would be greatly indebted if you would take a minute to follow me on TwitterFacebook, and/or Google+. My goal is for my work to remain entirely free of cost to my readers, and growing my following such that I generate an increasing number of page views will hopefully allow me to keep it this way.



101 ETF Investing Tips from the Experts (Including One From Yours Truly)

I was recently invited to participate in a report for ETFReference.com. The editorial team at ETF Reference surveyed 57 ETF investing experts in search of the best tips for exchange-traded-fund investors.

In response to that survey, they received over 400 tips. The Top 101 ETF Investing Tips made it to the main report. There are also bonus sections for Recommended Sites and Twitter accounts, as well as Recommended Books. One of my tips also made it into the Recommended Books section.

If you have a minute, take a look. I believe you will find this survey loaded with helpful information that could make a real difference for you. It was an honor to participate in this effort to increase the awareness of, and market interest in, exchange traded funds (ETFs).

Spicing Up My ETF Portfolio With A Little Individuality

In response to some reader requests, I just finished up my latest article for Seeking Alpha. Here is a quick peek at my summary:

Summary
In a recent article, I explained my reasons for adding Wal-Mart to my ETF-anchored portfolio.I promised that, should that article prove popular, I would share my other individual stock holdings as well as my reasoning for their place in my portfolio.This article will discuss all 4 holdings in my portfolio at the time I made that promise, as well as one very recent addition.
If this sounds intriguing, here's a link to the article.

Author's Note: If you find my work valuable, I would be greatly indebted if you would take a minute to follow me on TwitterFacebook, and/or Google+. My goal is for my work to remain entirely free of cost to my readers, and growing my following such that I generate an increasing number of page views will hopefully allow me to keep it this way.


UPDATE: BlackRock Announces The Cheapest ETF Ever

In previous articles for both Seeking Alpha and this blog, I have analyzed the iShares Core S&P Total Market ETF (ITOT).

BlackRock, Inc. recently announced huge changes to this ETF, effective December 18, 2015. First, at least for a short time, it became the cheapest ETF ever offered to the public. Secondly, it will be tied to a much broader index going forward, one that in my view much more accurately reflects the total U.S. market.

In a new article for Seeking Alpha, I take an in-depth look at all of these changes. Particularly if you are a Fidelity Brokerage client, I encourage you to check out my analysis. If you have ignored ITOT in the past in favor of competing ETFs, this article may encourage you to take a second look.

Author's Note: If you find my work valuable, I would be greatly indebted if you would take a minute to follow me on Twitter, Facebook, and Google+. My goal is for my work to remain entirely free of cost to my readers, and growing my following such that I g…

Portfolio Rebalancing: 2 Approaches And A Practical Example

I recently wrote an article on the topic of portfolio rebalancing that was selected as an Editors' Pick On Seeking Alpha.

Here is an excerpt from the article:
. . . Much like the landscape around your home, your asset allocation needs regular maintenance. When you landscaped your home (or started a garden, as the case may be), you likely worked with design and installation professionals to pick exactly the right plants for each location depending on your climate zone, the correct sun/shade mix and similar factors. No doubt, it all looked absolutely spectacular upon completion. However, left untended, your landscape or garden will not look nearly as good even weeks later, not to mention a year or more. In fact, it might ultimately look so bad that it would be hard for an impartial observer to discern that there had ever been a design or plan. People with a scientific mind call this entropy, one definition of which is "a gradual decline into disorder." Your asset allocatio…

The ETF Monkey Vanguard Core + REIT Portfolio: Q3 2015 Update

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In an article dated 7/22/15, I introduced the ETF Monkey Vanguard Core + REIT Portfolio. As outlined in that article, this is a variant of the ETF Monkey Vanguard Core Portfolio that I developed as a writer for Seeking Alpha. Following the various links provided, readers can trace the building blocks used to construct both portfolios as little or as much as desired.

In each variant, the basic premise was that an investor can build a highly-diversified, low-cost, portfolio using a small number of ETFs. In the case of this portfolio, four ETFs are used. As outlined in the original article, this portfolio was "purchased" at the 6/30/15 closing prices. As a reference point, we will use the S&P 500 index, which closed at 2,063.12 on 6/30/15.
Q3 Update

On Substituting Dividend-Paying Stocks For Bonds In The Current Environment

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Today's article is going to come from a very interesting place for ETF Monkey.

Readers who have followed my work will by now be familiar with its main focus, namely using ETFs to build low-cost, extremely diversified portfolios. An example of this is the ETF Monkey Vanguard Core Portfolio; based on just three ETFs yet offering well-balanced exposure to both domestic and foreign stocks as well as bonds. In the article linked above, I advocated establishing target weightings and sticking to these. I wish to reiterate that, for many investors, I would recommend sticking to that game plan.

ETFs form the core of my portfolio, comprising 81.11% of my total portfolio as of this writing, and I am very conscious of maintaining and rebalancing to target weights.

However, I occasionally make an exception and maintain modest positions in individual stocks for specific reasons. As of this writing, two such positions are AT&T Inc. and Verizon Communications, each of which holds a weighting …

Last Week Was Rough - But Here's Some Perspective in Four Pictures

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Last week was a rough week for the stock market. After declines beginning Tuesday of the previous week, on Monday 8/24/15 the Dow Jones average took a frightening nosedive at the open, initially falling over 1,000 points before closing down a "mere" 588.40 points.

Of course, this generated lots of headlines. The markets continued to rise and fall in wild, breathtaking motion through Wednesday of the week before mounting a sustained 2-day rally by Friday's close.

Using the broader S&P 500 Index as a gauge, here's a visual look at the week, extending slightly back into the previous week to make the decline appear even more dramatic (please note that you can click on any of the pictures to enlarge):


Now, that red line looks pretty horrible, doesn't it? This, of course, led to lots of panicked calls to financial advisors from clients fretting about the state of their portfolios, as well as newscasters conducting breathless on-air interviews on the evening news.

Action Alert: Consider VWO

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Today's action alert features the Vanguard FTSE Emerging Markets ETF (VWO).

This ETF, as the name implies, focuses on emerging markets. Take a quick look at the picture below and the I will offer some brief comments.




Best iShares ETFs - A Core Portfolio For Fidelity Brokerage Clients

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This article is designed for individuals who are Fidelity Brokerage clients, as I am, and who have an interest in building a low-cost, diversified ETF portfolio.

Here are just a couple of very valid scenarios for considering this subject:
You have a 401(k) account from a former employer which you have just left sitting there because you don't quite know what to do with the funds. Likely, you are paying annual fees of 1-2% on those investments. You may be able to roll those funds into a Fidelity IRA and create a core ETF portfolio with an overall expense ratio of perhaps one-tenth that amount, with the difference going straight into your pocket.You already have, or wish to establish, a non-retirement investment account at Fidelity. You wish to invest in modest monthly increments while ensuring that your investments are well-diversified.NOTE: If you are new to ETFs, you can learn a little more about them here.

However, since ETFs trade just like stocks, trading commissions can eat in…

Presenting: The ETF Monkey Vanguard Core + REIT Portfolio

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I recently wrote a series of articles for the Seeking Alpha website, for which I have the privilege of being a certified author.

The initial articles covered, in detail, three ETFs from the Vanguard family which can be used very nicely to build a simple, yet incredibly well-diversified portfolio. These are the Vanguard Total Stock Market ETF, the Vanguard Total Bond Market ETF, and the Vanguard FTSE All-World ex-US ETF
Ultimately, those articles culminated in a final article in which I presented The ETF Monkey Vanguard Core Portfolio. In that article, I developed several suggested weightings for each of the three components, based on an investor's age and risk tolerance. I accomplished this by working from the guidance available by reviewing the portfolio composition and weighting of various professionally-managed Vanguard Target Date funds. Finally, I selected one and built a hypothetical $50,000 portfolio, the performance of which I will track going forward. If you have not ha…

3 ETFs To Anchor Your Domestic Portfolio

NOTE: This article was written for exclusive publication on Seeking Alpha. Per their guidelines, I am reproducing the first 250 words or less here, followed by a link to the source article for those interested in reading further.

Every investor desirous of developing an ETF-based portfolio does well to start by selecting a few core holdings. In my view, such holdings should offer great diversification along with a rock-bottom cost structure. In a previous article for Seeking Alpha, I featured the Vanguard Total Stock Market ETF (NYSEARCA:VTI). I concluded that one should seriously consider VTI as a core holding for the portion of your portfolio devoted to domestic stocks. However, there are several worthy competitors in the marketplace.  . . .

Major ETF Families: BlackRock, Inc. (iShares ETFs)

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BlackRock, Inc. is the largest provider of ETFs, with over $809 billion in Assets Under Management (AUM) as of June 30, 2015. BlackRock's ETFs are marketed under the name iShares.

BlackRock was founded in 1988 by Laurence D. (Larry) Fink, Robert S. Kapito, Susan Wagner, Barbara Novick, Ben Golub, Hugh Frater, Ralph Schlosstein and Keith Anderson. Previously, Fink, Kapito, Golub and Novick had all worked for First Boston. Fink and his partners had been pioneers in the field of mortgage-backed securities.



Initially, Fink and his partners received funding from Pete Peterson of The Blackstone Group. Their goal was to build a disciplined asset management firm, with an emphasis on risk management. In 1992, the firm adopted the name BlackRock. Ultimately, BlackRock became a public company in 1999, with broad employee ownership.

Action Alert: Consider VIG

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Today's action alert features the Vanguard Dividend Appreciation ETF.

Have a quick look at the chart below. It reveals that, since March 2, 2015, this ETF has fallen 4.24% against only 1.32% on the S&P 500 index.




ETF Monkey and Social Media

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May I ask a favor?


My compensation both here on my blog as well as Seeking Alpha comes exclusively from page views and related advertising. Because of my fundamental belief that financial opportunity should be available to all, my goal is never to charge a fee for my work. Given that, my only hope of receiving reasonable compensation comes through followers and, ultimately, page views.

With that in mind, if you feel my work is valuable, I would deeply appreciate it if you could take a minute to follow me on one or more of the social media sites linked in the sidebar. Alternatively, I would appreciate a link to my work on one of your social media channels. Having my work linked from other sites greatly increases the chances of my articles showing up on the various search engines.

Thanks again for reading, and your support.

Presenting: The ETF Monkey Vanguard Core Portfolio

NOTE: This article was written for exclusive publication on Seeking Alpha. Per their guidelines, I am reproducing approximately the first 250 words here, followed by a link to the source article for those interested in reading further.

SummaryThis article is the "wrapper" that packages my first three articles for Seeking Alpha.We will build and track the ETF Monkey Vanguard Core Portfolio.The complete methodology used to build the portfolio will be outlined, as well as statistics outlining its contents, diversification, and weighted expense ratio.Lastly, I will share details on how to use a cool, free tool to track the portfolio such that you can try it yourself, if interested.In summary, all modesty aside, this is the article that you will want to share with any friends who are interested in trying out ETF investing for the first time.

Starbucks' Sale Of La Boulange Highlights So Much That Is Wrong With Our Culture

This is a rant. I am ETF Monkey. Not Stock Monkey, ETF Monkey. For the most part, my goal is to write about ETFs. But today I am going to write about a stock. I am going to write about Starbucks (NASDAQ:SBUX). A company I like. A company I am going to try very hard to like after today. But a company that just made it a little harder for me to do so. What has made it so difficult for me? This announcement, released two days ago, June 16, 2015. In a masterpiece of "corporate speak," Starbucks announced that they are going to "close all 23 La Boulange retail (bakery cafes) locations, as well as the two manufacturing facilities that serve those locations, by the end of September 2015." In other words, pretty much everything that was actually La Boulange. What do I mean by that? La Boulange - A Brief History La Boulange was founded in San Francisco in 1999 by Pascal Rigo, a native of Bordeaux, France who later emigrated to the United States. Rigo had earlier started the …

Introduction to Foreign Stocks

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Author's Note: If you find my work valuable, I would deeply appreciate your taking a minute to follow me on Twitter, Google +, and/or Facebook and/or sharing a link to this article on your social media accounts.

Most American investors begin their venture into the world of investing by investing in domestic stocks, in other words stocks of companies based in the USA. And this is natural, for these are the companies with which they are most familiar.

Interestingly, whether through direct investment or via mutual funds or ETFs, some portion of these investments likely involves U.S. Multinationals. These are companies based in the U.S. but who actually generate very large portions of their revenues outside the U.S. As an example, if you look at page 15 of the Coca-Cola Q1 2015 financial results, you will notice that only $5.1 billion of their $10.7 billion of operating revenues were in North America, meaning that the remaining $5.6 billion, or more than 50%, were outside the U.S.A.

Major ETF Families: Vanguard Funds

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Vanguard Funds is the second-largest provider of ETFs, with over $479 billion in Assets Under Management (AUM) as of May 18, 2015. It is second only to the iShares family of funds from BlackRock, Inc.

So, Vanguard Funds is not the largest provider of ETFs. Neither was Vanguard the first provider of an ETF. According to the Wall Street Journal, that honor goes to State Street Global Advisors, with the January 22, 1993 launch of the SPDR Fund (Ticker Symbol: SPY), which tracks the Standard & Poors 500 index. Vanguard's first ETF, the Total Stock Market ETF (Ticker Symbol: VTI), was established in 2001.

Despite the fact that Vanguard is neither the first, nor currently the largest, provider of ETFs, in many ways it could be said that Vanguard is largely responsible for their development.



Profile: John C. Bogle The story of Vanguard really begins with John C. Bogle, whose pioneering efforts are largely responsible for the development of the index fund and the acceptance of passive…

Introduction to ETFs

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Author's Note: If you find my work valuable, I would deeply appreciate your taking a minute to follow me on Twitter, Google +, and/or Facebook and/or sharing a link to this article on your social media accounts.
What Is an ETF? The acronym ETF stands for "Exchange Traded Fund." Think about that phrase carefully for a minute and, very intuitively, you are well on your way to understanding the basic character of an ETF.

When you think about things that are traded on an exchange, likely stocksand bondscome very quickly to mind. Now, think about the word "fund." Perhaps that immediately makes you think of mutual funds; entities that hold a wide variety, often referred to as a basket, of stocks and bonds.



And there you have it. Basically, an ETF is a security that trades on an exchange, just like an individual stock or bond, but in reality represents a basket of assets.

Characteristics Of an ETF This could become an extremely complicated discussion in and of itelf,…

Introduction to REITs

What Is a REIT? The initials REIT stand for Real Estate Investment Trust.

As one might quickly, and rightly, conclude from the name; a REIT is a corporate entity that invests in real estate. What makes REITs somewhat unique from other entities that might invest in real estate as part of their business is their tax status. To qualify as a REIT, a company must agree to distribute at least 90% of its earnings to its investors in the form of dividends. As a practical matter, many REITs distribute 100% of their income to investors such that they owe no corporate tax.

Characteristics of REITs You might be surprised to discover that much of the real estate you see as you move about your daily life is owned by REITs. This can include everything from downtown Manhattan office buildings to suburban outlet malls to high-quality apartment complexes to mobile home parks.

As you might imagine, REITs derive most of their income from rents on such properties. If they invest well, they may also reap …

Introduction to Bonds

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What is a Bond? A bond, as the name suggests, binds two parties--a borrower and a lender--together in a contract. While perhaps not commonly thought of in this way, a bank loan is a bond. The bank agrees to lend money to the borrower according to defined terms. These specify such things as the amount being loaned, the term of the loan, the interest rate, and the amount and frequency of payments. Since a contract is signed, there is also a promise to pay on the part of the borrower.


However, for the purposes of our discussion, the word "bond" is more typically used to describe a type of security issued by either a governmental agency or a business to raise needed funds to undertake a project. For example, a city may need to raise money to renovate school building…

Introduction to Stocks

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Author's Note: If you find my work valuable, I would deeply appreciate your taking a minute to follow me on Twitter, Google +, and/or Facebook and/or sharing a link to this article on your social media accounts.
What Is a Stock? Similar to a bond, shares of stock are typically issued by corporations to raise needed funds to undertake projects or to expand their business. Often, businesses will initially be financed either by the founders themselves or other private investors. However, as they reach a certain size and need yet more funds, they may participate in an Initial Public Offering (IPO) in which shares of the company are sold to the general public, and the stock begins to trade on a stock exchange (such as the New York Stock Exchange or NASDAQ).



Characteristics Of a Stock A share of stock represents an ownership share in the company. As such, it is perhaps the purest way to participate in a company's ultimate success or failure.

In contrast to a bond, a stock does not …