News and Articles

• Country ETFs: South Korea leads the way up

  04/29/2011

  A retirement portfolio that includes both foreign and domestic investments can provide for more diversification, with more opportunities for growth. This article will focus on country specific ETFs, and how they have been performing.

  International equity ETFs are available in several types. These include specific developed countries, specific emerging countries, specific frontier countries, as well as ETFs that hold equities from multiple countries and in several sectors and industries. The ETF provider iShares®, for several years, has been one of the leaders in Country ETFs, however there are several other ETF providers that have been offering an interesting line up of investments. Another interesting provider is Van Eck, with their Russia (RSX) ETF.

  We follow twenty three Country ETFs, and their performance over the past year is in the following table: (You can view this table here also- Global Stocks Trend). I have added the SPDR S&P 500 ETF (SPY) for comparison (in bold italics), - interesting that it ranks right about in the middle in terms of performance over the past year.

  as of 4/21

  Description	Symbol	1week	4Weeks	13weeks	26weeks	52weeks	Trend Score
  South Korea	EWY	4.32%	11.39%	9.73%	27.01%	30.66%	16.62%
  Australia	EWA	2.49%	9.28%	13.71%	18.81%	17.94%	12.44%
  Germany	EWG	2.09%	7.41%	11.25%	15.23%	25.01%	12.20%
  South Africa	EZA	3.00%	5.96%	8.83%	10.94%	27.01%	11.15%
  Canada	EWC	1.96%	1.59%	9.69%	19.41%	19.37%	10.41%
  Taiwan	EWT	2.63%	5.91%	-0.26%	18.77%	24.05%	10.22%
  Switzerland	EWL	3.03%	5.88%	10.63%	12.30%	18.23%	10.01%
  Russia	RSX	1.97%	-0.41%	5.02%	21.74%	19.46%	9.56%
  Belgium	EWK	1.84%	6.11%	13.18%	7.02%	16.37%	8.90%
  Singapore	EWS	2.20%	7.31%	4.89%	7.33%	21.41%	8.63%
  Austria	EWO	1.28%	2.01%	8.58%	12.54%	17.17%	8.32%
  SPDR S&P 500	SPY	1.93%	2.18%	5.08%	15.71%	15.90%	8.16%
  United Kingdom	EWU	2.02%	4.46%	7.40%	12.02%	14.39%	8.06%
  Malaysia	EWM	1.02%	2.13%	0.75%	8.59%	25.98%	7.69%
  Mexico	EWW	0.97%	3.73%	2.64%	13.44%	17.30%	7.62%
  France	EWQ	1.35%	3.55%	8.93%	9.52%	13.21%	7.31%
  Hong Kong	EWH	0.26%	5.45%	-1.06%	3.96%	23.57%	6.43%
  The Netherlands	EWN	-0.43%	1.71%	9.07%	10.16%	10.95%	6.29%
  Brazil	EWZ	2.75%	4.52%	3.63%	5.80%	10.39%	5.42%
  China	FXI	1.80%	6.28%	6.33%	0.90%	11.63%	5.39%
  Italy	EWI	0.05%	1.39%	7.03%	6.66%	6.36%	4.30%
  Spain	EWP	-0.25%	0.81%	6.80%	3.96%	7.21%	3.71%
  India	INP	-0.45%	5.98%	4.87%	-9.33%	7.54%	1.72%
  Japan	EWJ	1.79%	-3.49%	-7.59%	2.18%	-0.96%	-1.61%

  The trend score is defined as the average of 1, 4, 13, 26 and 52 week total returns (including dividend reinvested).

  South Korea (EWY) at the top of the list, has been trending about double the (SPY).You can see from the list that some of top performing countries are resource rich. Australia, South Africa, Canada and Russia, are major producers of minerals and mining, and energy.

  Another benefit of these Country ETFs is currency diversification. Owning these ETFs is like owning a basket of currencies from outside the US.

  These ETFs are on my retirement account watch list this year.

  Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

   

  Exchange Tickers: (NYSE:EWY), (NYSE:EWA), (NYSE:EWG), (NYSE:EZA), (NYSE:EWC), (NYSE:EWT), (NYSE:EWL), (NYSE:RSX), (NYSE:EWK), (NYSE:EWS), (NYSE:EWO), (NYSE:SPY) ,(NYSE:EWU), (NYSE:EWM), (NYSE:EWW), (NYSE:EWQ), (NYSE:EWH), (NYSE:EWN), (NYSE:EWZ), (NYSE:FXI), (NYSE:EWI), (NYSE:EWP), (NYSE:INP), (NYSE:EWJ)

   

  Symbols: EWY, EWA, EWG, EZA, EWC, EWT, EWL, RSX, EWK, EWS, EWO, SPY, EWU, EWM, EWW, EWQ, EWH, EWN, EWZ, FXI, EWI, EWP, INP, EWJ

   

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• Madoff madness is our own

  04/26/2011

  By John Wasik for Reuters Prism Money

   

  Bernie Madoff’s failings are not the mark of some isolated monster, although his crimes are heinous. He is so much like every one of us that failing to recognize this fact will imperil us at every financial turn.

  This is one of many revelations in Diana Henriques’s stunning new book The Wizard of Lies: Bernie Madoff and the Death of Trust.

  The man who bilked $65 billion from friends, family, institutional investors and charities knew what he was doing. As far as we know, he wasn’t incapacitated from bipolar disorder, substance abuse, schizophrenia or some gargantuan chip on his shoulder to prey upon the wealthy. He stole and lied consistently to all and told Henriques he was fully aware of his mammoth deceit every step of the way.

  Madoff was not a man conspiring in a bunker. He went to countless high-society parties, gave to charities and was admired by most who encountered him. Yet when he finally admitted his fraud, it was a surprise that ruined individuals and charitable foundations. His own son, trying to escape the shadow of his father’s foul deeds, committed suicide.

  The scale of his crime can’t be overstated. As the serial falsifier of whole portfolios, Madoff claimed to manage twice as much money as Goldman Sachs, Henriques states.

  “He was faking everything,” Henriques writes, “from customer account statements to regulatory filings, on a scale that dwarfed every other Ponzi scheme in history.”

  Next to the mavens of the 2008 meltdown, Madoff may be the Stalin of Ponzi villains (there are always other scamsters out there). Yet any attempts to personify him as a three-headed hydra will miss the main point of Henriques’s masterful narrative. Here’s the clincher, which Henriques saves for page 345:

  “The Madoff case demonstrated with brutal clarity another truth that we simply do not want to face about the Ponzi schemer in our midst: He is not “other” than us, or “different” from us. He is just like us — only more so.”

  This chilling revelation illuminates human nature itself. We want to believe that someone like Madoff is “taking care” of us — and our money. When some negative vibe buzzes in our ear like Jiminy Cricket, we compartmentalize it in the part of our brain that is like a dead-letter file. We don’t question the reality of outlandish claims and can’t own up to our avarice.

  I’ve seen so much investor denial in the past three decades of covering finance that I could spend the rest of my life writing about it. Some of it flies beneath the radar like high-yielding structured products that are loaded with risky and complex derivatives.

  Most of the deception, though, lies in banal investments like variable annuities or overpriced 401(k)s. We’re fleeced every day, but may not know it because of our trust in our advisers, a brand name or simply a bold promise.

  Here’s a short list of what we need to know about investing, but routinely fail to ask ourselves with any skepticism:

  • If an adviser is pitching a six percent yield when most one-year certificates of deposits are returning one percent, what kinds of risks will you be taking to achieve that return? How much can you lose if the promise doesn’t pan out?
  • Can the adviser beat a broad-market index like the S&P 500 on a regular basis? Most can’t. If they have a few good years, they are lucky, not skillful, and luck doesn’t last long in investing. Most lag the market averages over time after management expenses, taxes and inflation. It’s a fact of life.
  • Is your principal really protected? Outside of low-yielding FDIC-insured product, you will pay dearly for any guarantees. How much will it eat into your principal? What are the commissions and internal fees?

  How do we avoid the Madoffs of the world when we consistently trust people we shouldn’t and fail to ask the right questions?

  Henriques suggests that we need mandatory financial education in school and be required to get a license after we are tested on basic money skills.

  While I agree that everyone needs this skill set — and it should be taught beginning in middle school — I’m not sure if licensing is the way to go. Plain-language, gob-smacking tobacco-like warnings on investments that state “this is hazardous to your wealth” are another alternative, although crooks always manage a way around disclosure.

  Ultimately, we need to turn off our brain’s belief and trust circuits to avoid hazardous investing. The truth is often not in our heads, but in our guts.

  “That is the most enduring lesson of the Madoff scandal,” Henriques concludes, “in a world full of lies, the most dangerous ones are the ones we tell ourselves.”

  Exchange Tickers: (NYSE:SPY), (NYSE:GS), (NYSE:VTI)

  Symbols: SPY, VTI, GS

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• US Total Bonds Led By AGG, BND

  04/26/2011

  Retirement concerns are important for everybody. A well thought out, long term approach to investing is a key for retirement planning.  The lower risks in bonds make them a key part of everybody’s. Today we look at total bonds

  To understand bond returns one has to understand the bond dynamics. Companies need money for expansion, acquisition in new units, or exploring new market etc. One way of raising these funds is through a bond issue.

  Bonds are corporate debt, and the attractiveness will be determined by the organization’s credit history. The key question arises over how the bond rates are determined.

  Bonds rates are measured with respect to their position above treasury yield. This is to induce the investor to purchase their bonds assuming that if the rate is below the treasury yield no one will be interested in investing these bonds as treasury is the most bonds. Currently treasury yields are low making overall bonds look attractive. But there are secondary factors.

  It has has been more than 30 months during which the FED has kept interest rates low. With inflations showing signs of returning with the record high price of oil and commodities we expect that inflation will keep rising. In the last six months the producer price index (PPI) has risen at an annual rate of 10%. That will feed into the consumer price index (CPI) over the next few months.

  This is a serious concern for bond buyers and one reason they remain under pressure.

  Please find below the table of major ETF’s.

  Description	Symbol	1 Yr	3 Yr	5 Yr	Avg. Volume(K)	1 Yr Sharpe
  Vanguard Total Bond Market ETF	BND	5.18%	4.34%	NA	780	183.34%
  iShares Barclays Aggregate Bon	AGG	4.89%	5.33%	5.98%	683	173.31%
  Vanguard Intermediate-Term Bon	BIV	6.64%	5.01%	NA	123	130.96%
  PowerShares CEF Income Composi	PCEF	6.44%	NA	NA	55	57.91%

   

  From the above table we have a mixed picture of returns since the bonds are used as a fixed income returns usually. AGG is the best as it has a significant history of 5 years as all the others are the new one in the markets. AGG has also good volumes making it more attractive for investment purposes.  BND is also good in terms of return and heavy volume the overall return in 5.18% which I well above the treasury benchmark yield of 10 years. The expense ratio is 0.12%.

  Please find bellows Distribution by credit quality as at 31-03-2011

  	BND	AGG
  US Treasury	69.8%	38.66%
  Aaa	5.3%	36.31%
  Aa	4.9%	2.81%
  A	10.4%	11.5%
  Baa	9.6%	8.71%
  Total	100%	100%

   

  From this we see AGG has better diversification in terms of credit quality rating compared to BND.

  Total Bonds are very important from the portfolio perspective. There appropriate use can provide stability and a hedge when equities drop. The proper allocation of bonds in the portfolio not only provides the hedge in terms of volatility but also a good fixed income streams.

   

  Symbols: BND, AGG, BIV, PCEF

   

  Exchange Tickers: (NYSE: BND), (NYSE: AGG), (NYSE: BIV), (NYSE: PCEF)

   

  Disclaimer

  MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

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• Improving on the No-Brainer Portfolio: Add More Asset Classes

  04/24/2011

  By Lowell Herr at ITA Wealth Management

  Yesterday, I picked up this article on Seeking Alpha titled, "Lack of REITs & Commodities Now Shows in Bernstein's No-Brainer Portfolio's Performance." I first needed to look up the Bernstein No-Brainer Portfolio and found it included four ETFs. The asset allocation is quite simple.

  IVW = 25%

  VB = 25%

  EFA or VFA = 25% I prefer to use VEU as my international investment.

  BND = 25%

  When I ran a Quantext Portfolio Planner analysis, I found the projected return to be 6.6%, projected uncertainty equals 13.8% for a ratio of 0.48. The Diversification Metric (DM) is a meager 16%. While this may be a No-Brainer Portfolio, it is projected to return less than the S&P 500 without much diversity.

  When I substituted TLT for the BND bond fund, projections improved slightly. With only this change, projected return increased to 7.65% or better than expected from the S&P 500. Risk or projected uncertainty actually decreased slightly to 13.7%%. DM rose to 24%.

  In the Seeking Alpha article, adding REITs and Commodities implied better results. While this was true in the past, is it likely to be true in the future? One would think so. However, when I ran the QPP analysis, including VWO, DBC, and VNQ lifted the return to 7.8% or only slightly better than the No-Brainer projections. Uncertainty jumped to 16.3% and DM actually fell to 23%. The Return/Uncertainty ratio was about the same at 0.54.

  Given that QPP analysis is coming up with projections, and they are not significantly different from the No-Brainer Portfolio, I would go with the portfolio that adds more asset classes.

  Exchange Tickers: (NYSE:BND), (NYSE:DBC), (NYSE:EFA), (NYSE:IVW), (NYSE:TLT), (NYSE:VB), (NYSE:VEU), (NYSE:VNQ), (NYSE:VWO)

  Symbols: BND, DBC, EFA, IVW, TLT, VB, VEU, VNQ, VWO

   

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• 9 Stocks That Gain Every Earnings Day

  04/22/2011

  All eyes are on corporate earnings this week as 20 percent of all U.S. publicly traded companies report quarterly results. How do you know which stocks will give you a nice return on reporting day?

  Bespoke Investment Group co-founder Paul Hickey looked at 2,240 stocks and found just nine stocks that have gone up every time earnings day has rolled around, since the March 2009 market bottom.

  Below are the nine earnings-day winners. Next to each company's name find the upcoming earnings-report date and average single-day percentage gain.

  1. Verifone Systems(PAY) - 5/26/2011 - 9.20%

  2. Dice Holdings(DHX_) -4/28/2011 - 8.69%

  3. MWI Veterinary Supply(MWIV_) - 5/6/2011 - 6.27%

  4. Opnet Technologies(OPNT_) - 5/9/2011 - 5.80%

  5. First Cash Financial(FCFS_) - 4/20/2011 - 4.24%

  6. Raymond James(RJF_) - 4/21/2011 - 4.12%

  7. Barrick Gold(ABX_) - 4/27/2011 - 3.24%

  8. Horace Mann Educators(HMN_) - 4/28/2011 - 2.61%

  9. Anadarko Petroleum(APC_) - 5/3/2011 - 1.82%

  Source: Bespoke Investment Group.

  We entered the nine stocks  in a portfolio on our system and started tracking from the end of 2007. This is limited by the age of the youngest equity. We show the current holdings with no rebalancing since the end of 2007.

  Fund in this portfolio	Price	Percentage
  MWIV (MWI Veterinary Supply, Inc.)	84.25	9.66%
  OPNT (OPNET Technologies Inc.)	38.75	21.75%
  FCFS (First Cash Financial Services,)	38.11	11.91%
  RJF (Raymond James Financial Inc)	37.44	5.61%
  ABX (Barrick Gold)	55.63	6.28%
  DHX (Dice Holdings, Inc.)	17.75	10.19%
  OPNT (OPNET Technologies Inc.)	38.75	19.62%
  PAY ()	53.57	10.57%
  HMN ()	16.88	4.42%

  
  We compare this with our benchmark six asset ETF portfolio.

  Asset Class	Ticker	Name
  LARGE BLEND	VTI	Vanguard Total Stock Market ETF
  Foreign Large Blend	VEU	Vanguard FTSE All-World ex-US ETF
  DIVERSIFIED EMERGING MKTS	VWO	Vanguard Emerging Markets Stock ETF
  REAL ESTATE	VNQ	Vanguard REIT Index ETF
  COMMODITIES BROAD BASKET	DBC	PowerShares DB Commodity Idx Trking Fund
  Intermediate-Term Bond	BND	Vanguard Total Bond Market ETF

   

  The comparison is

  • Dividend Stocks Increasing Payouts -- Total of $10K invested equally in each stock
  • Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate -- Above funds using TAA (40% fixed income, 30% for each of the top two asset classes)
  • Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate -- Above funds using SAA (40% fixed income, 12% for each of the five asset classes -- funds selected based on price momentum)

  Portfolio Performance Comparison

  Portfolio/Fund Name	1Yr AR	1Yr Sharpe	3Yr AR	3Yr Sharpe	5Yr AR	5Yr Sharpe
  P 9 Stocks That Gain Every Earnings Day	93%	332%	40%	101%
  Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate	11%	82%	9%	76%	13%	87%
  Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate	15%	121%	4%	20%	7%	34

  Full Data

   

  Three Month Chart

  

  One Year Chart

  

  Three Year Chart

  

  
  This is certainly a selection of equities that have performed very well, especially as the market bounced back in 2010 and up until today..
  
  For those so inclined, it might be worth considering taking a certain portion of their portfolio and dedicating it to this group of stocks.
  
  We will keep tracking this set of equities and see how they perform going forward.

  Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

  Symbols: PAY, DHX, MWIV, OPNT, FCFS, RJF, ABX, HMN, APC

  Exchange Tickers: (NYSE: PAY), (NYSE: DHX), (NASDAQGS: MWIV), (NASDAQGS: OPNT), (NASDAQGS: FCFS), (NYSE: RJF), (NYSE: ABX), (NYSE: HMN), (NYSE: APC)

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• Do stocks make sense in the long run?

  04/22/2011

• International REIT Rapidly Becoming A Key Area For Investors

  04/21/2011

• US Total Bonds (BND): PowerShares CEF Income Composite shows good Performance

  04/20/2011

• REIT and Commodities In Simple Six Fund Portfolio Shows Up Aronson's Lazy Portfolio

  04/20/2011

• Keep It Simple Stupid -- A Simple Benchmark to Measure Your Investment Returns

  04/19/2011

• REIT and Commodities In Simple Six Fund Portfolio Shows Up Aronson's Lazy Portfolio

  04/19/2011

• UPS, Fedex Square off in Retirement Plans

  04/19/2011

• Dow Jones, Shiller And Momentum Approaches Compared

  04/15/2011

• Emerging Markets Demand Diversification

  04/13/2011

• 12 Blue Chip Stocks by SmartMoney: How Good Are They Compared with A Diversified ETF Portfolio

  04/11/2011

• Japan Disaster -- Prevention is Better Than Cure -- How Does that Apply to Investing?

  04/07/2011

• New Steps -- A First Time Investor Steps Out

  04/05/2011

• National Semiconductor Provides Good Funds in Their Retirement Plan

  04/04/2011

• Smart U.S. Money Managers Dumped Long Term Treasury Bonds, Who Are Holding The Bag?

  04/04/2011

• MidAmerican Energy Company's 401K Plan: More Diversification Needed

  03/31/2011