Written by David Fabian, January 18th, 2017
ETF investors are likely measuring the resilience and relative performance of their portfolios during the latest 6-month jump in interest rates. Bond funds are the obvious areas of concern in terms of volatility. However, many stock and equity-income asset classes maintain a high sensitivity to Treasury yield fluctuations as well.
REITs certainly fall into this category and are one of the few sectors of the market currently trading well off their highs. As I wrote in September, inflection points in interest rates typically signal a change of trend for these assets. Read more
Written by David Fabian, January 17th, 2017
Investors who have held onto their U.S.-focused dividend ETFs have been rewarded in both income and capital appreciation during the breadth of this bull market. The combination of relative momentum, low volatility, and steady accumulation of quarterly distributions have been the hallmarks of this steady trade.
Yet, those who study market history know that price performance that outstrips company fundamentals comes at a cost. Namely higher statistical valuation measures, alongside slowly decreasing yield for new investors. As a result, dividend stocks that looked attractive several years ago are now starting to rise into the expensive zone relative to other global opportunities.
Written by David Fabian, January 15th, 2017
The stock market is a machine that will eventually humble every single one of us. It doesn’t care what you think it should do. It has no alignment with your political, social, or environmental beliefs. It is simply a mechanism for transferring your hard-earned money into an asset that will fluctuate over time. Sometimes that means higher and sometimes that means lower. Read more
Written by David Fabian, January 10th, 2017
The impact of currency fluctuations is a dynamic that more and more investors have taken an interest in over the last several years. A decade ago, it was difficult to trade the currency markets without a dedicated forex account and sophisticated knowledge of the landscape. This was the realm of institutional investors and macro hedge funds. Fast forward to 2017 and there is a myriad of mainstream options to take advantage of these markets in a normal brokerage account.
At present, there are 32 exchange-traded products dedicated to currency trading pairs or indexes. There are also countless other ETFs and mutual funds with embedded currency strategies coupled with stock or bond holdings. These “local currency” or “currency hedged” indexes allow ETF investors the ability to mitigate certain risks of owning foreign investments or take advantage of a specific currency trend.
Written by David Fabian, January 08th, 2017
Clients and readers often ask my opinion about an investment relative to its 200-day moving average. This trend line is one of the most common foundations of simple technical analysis.
In fact, the 200-day moving average has deep-rooted meaning to my family legacy. My grandfather Dick Fabian was one of the first investors to pioneer a trend following system based on this measurement. Read more