FMD Capital Management

Interest Rate Sensitive ETFs Add To Gains In October

Written by David Fabian, October 21st, 2014

The recent downward selling pressure in October is one that has investors searching for safe havens amid an uncertain economic backdrop. This effect has been magnified by multiple days of heavy volume and expansion of volatility that has only recently shown signs of abatement.

Not surprisingly, some of the strongest momentum areas have been trading vehicles that are directly correlated to a market sell off or volatility theme.   This includes funds such as the iPath S&P 500 VIX Short-Term Futures ETN (VXX) and ProShares UltraShort QQQ (QID). While these aggressive plays are one way to take advantage of a broad-based decline in equity prices, most investors won’t have the fortitude or discipline to trade these fast moving areas.

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Why BOND Still Might Be in a Class of Its Own

Written by Michael Fabian, October 17th, 2014

The over-publicized departure of Bill Gross from the fixed income goliath he founded roughly 30 years ago has brought about some interesting crosscurrents in recent fund-flow statistics.

Although the vast majority of the assets that departed the firm were domiciled in the flagship Pimco Total Return Fund (PTTRX), the smaller, actively managed ETF version Pimco ETF Trust (BOND) also experienced an exodus when the news finally broke. Read more

The Fear and Greed Cycle Lives On

Written by David Fabian, October 16th, 2014

The last few years in the market have been an interesting experiment in psychological conditioning and overall complacency. Despite calls for a correction by mainstream experts for some time, prior to September, the markets have largely shrugged off any bad news. In fact, bad news was seen as a positive sign that quantitative easing efforts would continue to prop up the markets and overall economy. Read more

Why Volatility Works In Favor of Gold ETFs

Written by David Fabian, October 14th, 2014

The majestic rise and fall of gold-related ETFs can only be described as a wild roller coaster ride of emotionally-driven price swings. This once beloved asset class has fallen out of favor so many times this year; it is hard to keep track of the number of false breakouts and breakdowns. Read more

Navigating A Market Pull Back Using ETFs

Written by David Fabian, October 14th, 2014

The recent volatility in stocks has prompted a return of fear and uncertainty that has largely been misplaced over the last three years. The slow grind higher in the market since the double digit drop in 2011 has led many investors into a state of complacency that is now being put to the test.

To put things in perspective, the SPDR S&P 500 ETF (SPY) just crossed below its 200-day moving average and is 6.7% off of its all-time closing high. SPY hasn’t breached this long-term moving average since 2012, which may be adding another layer of discomfort to the mix. In addition, market experts are full of contradictory advice that ranges anywhere from this being the “buying opportunity of the century” to the start of “the next financial crisis”.

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