State Street has had a tremendous advantage in the exchange-traded fund world by being the first issuer of dedicated sector funds. Their highly successful SPDR sector series debuted in 1998 and has spent nearly two decades building a world-class reputation. Everyone from professional to novice investors respect SPDR ETFs for their liquidity, transparency, low-costs, and tax efficiency. Read more
January was a rough month in the stock market by almost any metric. From an index standpoint, the U.S. concentrated SPDR S&P 500 ETF (SPY) dropped 5.07%, while the globally oriented iShares MSCI ACWI ETF (ACWI) fell 5.30%. Both benchmarks would have been substantially worse if not for a late month rally that was spurred by oversold conditions alongside a sizeable rally in crude oil prices.
Many investors are now succumbing to the realization that volatility happens quickly and with little advance warning. In fact, several high growth sectors experienced jaw-dropping moves in the month of January that are good examples of how quickly gains can evaporate in the midst of adverse conditions.
In this video series, we take a look at the panic that has gripped the stock market in the first month of 2016. This review includes several key charts, trends to watch, and important levels we are monitoring at this time. Recorded after the market close on January 28, 2016.
The most coveted trade on Wall Street right now is cash and short positions designed to bet against stocks (i.e. shorting stocks or other related market instruments). The fear and anxiety that has gripped the financial markets during the nascent days of 2016 has led to a rush for capital preservation and temptation to reap profits on the downside by shorting stocks.
Just a decade ago this would have been nearly unthinkable for all but the most aggressive investors with margin agreements, options familiarity, or a contrarian viewpoint. However, the proliferation of exchange-traded funds (ETFs) that short an underlying basket of stocks have made this practice commonplace for virtually anyone with a brokerage account.
The recent ramp up in bearish sentiment combined with social aggregation of “best short ideas” has led me to question if most investors are well served in this practice. If you are considering shorting stocks or betting against the market at this juncture, it may be in your best interest to answer the following three questions first.
With a full week of trading now in the books for 2016, investors are ready to go back to the relative sanctuary of yesteryear. The major indices are off to a miserable start that has many questioning how to position their portfolio for success in the New Year. Fortunately, the transparency of the exchange-traded fund (ETF) creation and redemption process gives us a unique perspective of what ETF investors are buying during this tumultuous period.
The fund flows tool at ETF.com is an excellent resource for this task. It automatically shows you the top 10 ETFs in creation and redemptions over the past week with customized settings for year-to-date, individual quarters, and other timeframes.