I knew this headline would grab you attention.
The S&P 500 closed out the month of February today with a small loss, but for the entire month the index was able to gain 1.1%. This has the index up for the month of January and February in the same year for the 26th time since 1945.
Every single time the index has been able to accomplish this feat the S&P 500 closed the year in positive territory. Through two months the S&P 500 is up 6.2%, so it does have a buffer below it in the event it is down from now through the end of the year.
The key is that the average gain during the 26 years the S&P 500 was up in January and February was 24%. If the index follows history and closed up 24% it would have the S&P 500 finishing the year at 1768 - a gain of almost 17% from the current closing price of 1514.
Market expert and TV personality Matt McCall blogs about what is really moving the markets. He will emphasize Exchange-Traded Funds (ETFs) and individual stocks throughout the trading day.
Thursday, February 28, 2013
3 ETFs to Hedge Inflation
Inflation may not be an issue if you listen to the government and their numbers. But as the person in my household that pays the bills and does the grocery shopping I know there is inflation already living among us.
Not only is there inflation now in the price of energy (see gas prices) and food (see milk prices), but it is clear that prices overall have been increasing. The big concern in the coming years is that inflation finally starts to hit at the level the government measures and that will hit our wallets even harder.
There are a number of different angles investors can take to prepare their portfolios for higher inflation in the future. They range from inflation-protected bonds to gold to timber. I have a sizable list of inflation hedges and today I will share 3 ETFs that fit the bill.
Not only is there inflation now in the price of energy (see gas prices) and food (see milk prices), but it is clear that prices overall have been increasing. The big concern in the coming years is that inflation finally starts to hit at the level the government measures and that will hit our wallets even harder.
There are a number of different angles investors can take to prepare their portfolios for higher inflation in the future. They range from inflation-protected bonds to gold to timber. I have a sizable list of inflation hedges and today I will share 3 ETFs that fit the bill.
- PowerShares Senior Loan Portfolio ETF ($BKLN) - A basket of loans offered by banks to companies that are often rated below investment grade. This allows for a solid dividend (currently 4%) and because they are floating instruments it will not be hurt nearly as bad by rising interest rates.
- Guggenheim ABC High Dividend ETF ($ABCS) - The ETF invests in 3 commodity-rich countries (Australia, Brazil, and Canada) and chooses 30 of the highest yielding companies. This is an inflation play as typically commodity stocks will outperform during inflationary periods. And add in the 6.7% dividend the ETF currently pays it only increases the reward potential.
- iShares S&P Global Timber & Forestry ETF ($WOOD) - The timber/forestry/land stocks have historically done well during inflationary times and this basket of 27 stocks will give investors exposure to that sector. Additionally the sector should do well when the overall economy and market is moving upward as it is now.
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Topics Covered: S&P 500, morning news, ETFs (Financials, Timber, Defense, Social Media, Indonesia, and Commodities).
Wednesday, February 27, 2013
Bullish Sign - Packaging Stocks
There are numerous ways to determine if the economy is doing well. One is the performance of the stock market. However, there can be a disconnect between the two as the market is often a leading indicator.
Withing the stock market I find certain sectors to be good indicators at the underlying strength of the true economy. One such sector is the Packaging & Container stocks. The chart below is the performance over the last year of the sector and as you can see it is near an all-time high it hit last week and today it is up 1%.
A couple upgrades today have the sector on the rise Owens Illinois ($OI) and Rock-Tenn Co. ($RKT). Both stocks trade with PEG ratios near 1.0, making them attractive fundamentally and both have very strong charts. If you believe in the global economic rebound you may want to check out the 2 companies.
Withing the stock market I find certain sectors to be good indicators at the underlying strength of the true economy. One such sector is the Packaging & Container stocks. The chart below is the performance over the last year of the sector and as you can see it is near an all-time high it hit last week and today it is up 1%.
A couple upgrades today have the sector on the rise Owens Illinois ($OI) and Rock-Tenn Co. ($RKT). Both stocks trade with PEG ratios near 1.0, making them attractive fundamentally and both have very strong charts. If you believe in the global economic rebound you may want to check out the 2 companies.
Transport ETF Rallies Behind Rails
The iShares Dow Jones Transportation ETF ($IYT) is up 2.5% in early trading today on the back of a big move by the Railroad stocks. Leading the way is Kansas City Southern ($KSU) with a gain of 7.5%, pushing the ETF to a new all-time high.
The Dow Jones US Railroads Index is also closing in on an all-time high, suggesting to me the economy cannot be as bad any many believe considering the importance of moving goods on the rails.
The two rail stocks with the most attractive PEG ratios and charts are:
The Dow Jones US Railroads Index is also closing in on an all-time high, suggesting to me the economy cannot be as bad any many believe considering the importance of moving goods on the rails.
The two rail stocks with the most attractive PEG ratios and charts are:
- Genesee & Wyoming ($GWR) - PEG of 1.08
- Union Pacific ($UNP) - PEG of 0.99
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