It’s obvious that the falling dollar has had a positive impact on International equities, but how much?? One way to compare the two is to see how much a Barclay’s International ETF has performed vs. the index upon which it’s based (trading in the local currency).? The Washington Post just ran an article analyzing this, and it found that, for example, “Year to date through Nov. 28, the EAFE index was up 17.4 percent in dollar terms but had gained only 7.9 percent in local currencies.”? When you’re thinking of rebalancing your portfolio, think about whether you want to continue making this dual bet:? that International equities will continue to flourish and that the dollar will continue to fall.? These two factors will greatly influence whether the excellent returns of 2006 will happen again in 2007.

I heard a piece on Market Place (with both audio and transcript) over the weekend about investing in Cuba via the Herzfeld fund. It’s a closed end fund, trading at a much higher premium to NAV than I’m comfortable with (nearly 40%), but it does have a tantalizing investment strategy, and the fund is up 50% so far this year. Herzfeld focuses on businesses in the US that are poised to profit when US/Cuba relations are restored. Here’s a great quote from the piece that highlights this principle: (more…)

After a fairly depressing week of news showing relatively little impact on the equity markets, there seems to be a large amount of optimism still left in the current bull market trend (it’s safe to call this rally a bull market, right?).? A quick glance at the bond market seems to suggest that this week woke some up to the fact that things might be bad enough soon that the Fed might have to actually start cutting rates before too long:? VBMFX is a good example of how prices are sharply up upon this week’s news.? While I’m not a major fan of bonds when there’s several options for money market rates at over 5% and 5.15% right now, it is nice to know that the bond market is aware that this equity uptrend isn’t going to last.? I’m of the opinion that we’re not going to get to finish this bowl of porridge before it gets too cold.? But this is just a gut feeling right now, since the trend still seems to be up (note that 100 point after 2:00 recovery in the DOW on Friday).

Since the bulk of my investments are in index funds, fed regularly by scheduled payments based on a pre-set asset allocation, it probably sounds strange when I express concern about taking profits and shifting my asset allocations. Obviously, rebalancing is essential to maintain appropriate asset allocations according to my plans, but a little over a month ago I performed an action that seemed to fall outside my asset allocation strategy. Jason has requested that I explain and expound upon my actions. (more…)

Today’s rally of the DJI and S&P500 was broad and strong.? 27 of the 30 DJI were up, 450 of the 500 S&P500 were up.? This is one indicator that things are very bullish in the short term.

I just found this great bit of data on The Big Picture Real Estate blog, an enjoyable read. I’ll present it here as they did, since it’s just startling (these figures cited below are just out in Sept), and REITs are still chugging upward like little engines that could.

Housing by the numbers

Housing Stat Year Over Year Change
Builders? sentiment -52.2%
New-home sales -21.6%
Purchase-mortgage applications -20.9%
Building permits -20.8%
Housing starts -13.3%
Existing-home sales -11.2%
Existing-home inventories +39.9%
New-home inventories +22.4%

I’m sure this information can be found in many places online, but I just got this via e-mail from TradingMarkets and found it to be a useful quick summary of what’s coming up this week. I’ve pasted it below and followed with my comments (brace yourselves, this is a very long post!!!):


FYI, both Fidelity and Vanguard posted 401K contributions yesterday.? Notice that it was a solid up day for nearly all markets.? What’s interesting is how both companies invested me and my significant other’s holdings on the same day, although typically my significant other is invested a couple days earlier, and my 401K is invested a few days later than this time of the month.? If I think of it, I’ll continue to report when there are significant 401K contribution events.? Food for thought that it’s not just oil going up or down that makes the markets move–I think overall cash flow is far more important!

While thinking of underappreciated investment analysis techniques, I just thought of one that I freely admit to skipping: before making a decision about where to invest, write yourself a draft e-mail about why this stock/fund/etc is worth buying now. Jot down some bullet points about why, from the current perspective, the stock looks promising. On a weekly or monthly basis, review this e-mail to yourself and see if the situation has changed significantly and adjust your position accordingly. (more…)

As you both know from the last meeting, I’m launching a quest to better understand sectors. Knowledge of sectors and which sectors are hot or cold is vital to individual stock picking, since analyzing the sector performance and ranking vs. other sectors should be one of the first criteria any trader or short-term (less than 1 yr) investor employs to determine whether a stock is a buy or sell. The strength or weakness of the sector is useful and can be a primary component of buy and sell decisions for individual stocks.

The absolute best sector analysis tool can be found here: (more…)

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