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Clearly, Not Everyone Is Getting Rich Off The Stock Market

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Well, the NY Fed was out today with its Quarterly Report on Household Debt and Credit for Q4 2017. Clearly, Americans are in a lot of debt. Take a look. Just a couple of quick hits from the report. Total U.S. household debt rose $193 billion in the 4th quarter, to a new all-time peak of $13.15 trillion. That's 17.9% above the most recent trough in Q2 2013. Broken down by segment, what do you suppose was the largest gain in percentage terms? Credit cards, with a 3.2% increase. In the picture above, the widening gap represented by the red arrows reflects the fact that non-housing debt is rising at a faster pace than housing debt. Here's what's troubling about that. Below is a picture of the stock market, as represented by the S&P 500 index, over that same period; from the most recent credit trough in Q2 2013 to the end of 2017. And thus, the title of this article. Over that period, the S&P 500 index rose by 75%; from roughly 1,600 to 2,800. Apparently, ho...

Action Alert: Consider VWO

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.




VWO contains a 27.1% exposure to China. As a result, it has been heavily affected by the recent difficulties in the Chinese stock market. However, you will notice that you can draw a straight line in the share price of VWO all the way back to September, 2011. You will further notice that this area is below subsequent low points.

I am in no way predicting what will happen in the next day, week, or month. Still, if one has a long-term horizon, this may be a nice opportunity to add to your weighting.

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Disclosure: I am not a registered investment advisor or broker/dealer. Readers are cautioned that the material contained herein should be used solely for informational purposes, and are encouraged to consult with their financial and/or tax advisor respecting the applicability of this information to their personal circumstances. Investing involves risk, including the loss of principal. Readers are solely responsible for their own investment decisions.

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