Featured Post

Clearly, Not Everyone Is Getting Rich Off The Stock Market

By -
Image
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...
9 comments

A Quick Example Of Rebalancing Theory At Work

By -
I know I go on and on about disciplined rebalancing. In this article, I also address the concept that each asset class in your portfolio can be viewed as a form of "currency," and can be expensive or cheap.

Today, I merely wanted to share a quick real-world example of how this worked in my personal portfolio. The picture below is a 6-month graph from Yahoo Finance. The blue line represents the Vanguard REIT ETF (VNQ), the red line the Vanguard Utilities ETF (VPU) and the green line the S&P 500 average.


You will quickly notice that both VNQ and, even more dramatically, VPU have outperformed the S&P. As a result, the "overweight" indicator recently flashed up for both of them in my portfolio, to the tune of about 7-8% overweight. The red arrows represent my two recent sales to bring them back in line; VNQ on 5/9 and VPU on 5/13.

Want to know a little secret? As I write this, both are now slightly underweight in my portfolio. The sharp drop you see in both at the very end of the graph is because the Fed minutes released today appear to indicate that a June rate hike is back on the table. As a result, all interest-rate-sensitive asset classes took a beating.

So, now I have an opportunity to watch for a chance to possibly buy back in at lower prices. Not because I'm brilliant. Simply because I monitored and acted on my weightings in a disciplined manner.

Comments

Post a Comment

Popular posts from this blog

Clearly, Not Everyone Is Getting Rich Off The Stock Market

By -
Image
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...
Read more

3 Best International Total Market ETFs

By -
As I feature in this educational article from my personal blog, there are good reasons to include exposure to foreign, or international, markets in your portfolio. Two key reasons are potential for growth and diversification . In this article I wrote for Seeking Alpha, I review what I consider to be your 3 best choices in this sector. Enjoy! ----------- Authors Note: If you like my work, I would be profoundly grateful if you would take a minute to follow me on Twitter , Facebook , and/or Google+ , as well as feature my work to friends, colleagues and/or relatives who may be interested in the subject matter. Growing one's readership base is critical to any author and I am no exception. Your support will enable me to continue my efforts.
Read more

Has Starbucks Lost Its Way?

By -
Image
I couldn't help but notice that same-store-sales in the quarterly results announced today fell short of expectations. For me, this did not come as a total shock. ETF Monkey has loved Starbucks for years. In the course of my work travels, I frequented their locations in Seattle back in the days when they were small. They were amazing. The quality of everything they served was top-notch. I wanted to meet their HR person, because my experience was that virtually every employee went above and beyond your expectations. It was like they had enjoyed a little too much of their own product, but in a good way. Cheery, bubbly, upbeat. And then they got big. Very big.
Read more