You might want to sell your silver now

Posted February 21, 2012 at 3:47 am

by Chris Kimble

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High returns via fine wine

Posted February 9, 2012 at 3:55 am

by Daniel Kiernan

Wine investing is seen as a diversifying element in a portfolio, with returns that are relatively uncorrelated to traditional investment markets.

But with volatility at unprecedented levels in the past five years it is no surprise wine markets have felt some of the upheaval.

This was clearly demonstrated in the second half of 2011 when the Liv-ex 100 Fine Wine index, which represents the price movement of 100 of the most sought-after fine wines for which there is a strong secondary market, fell by 21.5 per cent.

To take advantage of the asset class there is the option of direct investing, including through a managed portfolio of a basket of wines, or through specialist investment funds.

Mr Smith says:

“It remains possible to invest in wine by owning cases directly, but this usually involves suffering the margins (on both the buy and sell sides) charged by merchants, and makes diversification – and hence risk management – more difficult.

“Instead, investors – whether they are connoisseurs or simply like the risk/return profile of wine – are increasingly looking at funds, which are more likely to be incentivised to buy and sell at the best possible prices.

“Funds can also pool money across investors to provide diversification, and use their professional expertise to select the wines with the best prospects of future growth. While there are fees involved with funds, these are transparent and can often work out less than the more hidden transaction costs associated with direct investment.”

Mr Brierley agrees investing through a fund offers [continue]…

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Investing in “risk” with one easy ‘all in’ fund

Posted January 12, 2012 at 2:33 am

by Duff McDonald

Imagine if investing were as simple as a light switch. When you’re feeling good, you turn it on. When you’re not, off. Even if you’re manic, and change your mind about your feelings every single day, it’s as simple as that: ON or OFF.

Well, imagine no more!

That’s the state the entire market seems to be in of late, what with the spread of the notions of “Risk On” and “Risk Off.”

Think Europe has saved itself? Risk on, baby! Think it merely kicked the can down the road? Risk Off!

The devolution of the investment decision to a single choice between “risky” assets—equities, oil, and the like—and “less risky” ones—U.S. Treasuries, German bunds—brings to mind a well-dressed man in a casino, who, on each successive hand, moves all his chips from red to black and then back again. (Gold used to sit firmly in the “less risky” category, but trading in the metal has not been so dependable of late. Something about a bubble, I am told.)

See Why gold has lost its lustr…

Is this crazy behavior? Not exactly. As Jim Grant points out in his latest Grant’s Interest Rate Observer, correlations between all manner of securities—the S&P 500, currencies, commodities, and interest rates—are all at record highs, meaning they move together more frequently.

So the idea that it’s all going up or all going down at once isn’t so far-fetched. Even within the S&P 500 itself, correlations are through the roof. There has never been a single day when all the stocks in the S&P 500 moved up or down at once. There have been 11 days, however, that 490 of them have moved in lockstep. Six of those 11 days have occurred since July of this year.

Of course, who has the capacity to put on an every-kind-of-security bet on one day and take it off the next other than the most institutional of investors? Not you or me. (Or at least not me.) That’s where UBS (UBS) comes in [continue]…

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One of the most hated assets in the world today…

Posted January 9, 2012 at 1:41 am

International investor Jim Rogers, often a critic of currencies, says investors should buy the euro and Swiss franc in 2012 because the continent’s leadership will navigate their economy out of the storm.

“I suspect (German Chancellor Angela Merkel) and that crowd will do something to make us feel better,” Rogers tells CNBC.

The European Central Bank should not step in and buy government debt directly from debt-ridden governments like Greece or Italy, which would turn investors away from European markets in general.

European Central Bank officials have said they won’t resort to such a policy, known as quantitative easing, in that it would bring about inflationary pressures.

“The market will start saying: ‘ Come on guys, we have had enough, this is shoddy and we’re not going to play anymore,’” Rogers says.

In 2011, Rogers advised buying the euro on sentiment the currency will survive.

Despite the ongoing debt crisis and the chaos it has inflicted on equities markets worldwide, the euro [continue]…

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Follow ‘insider money’ with these two ETFs

Posted January 4, 2012 at 3:56 am

by The ETF Professor

The term “insider trading” usually conjures up negative vibes, but there is a legal version of it and some investors just love following insider transactions at various companies to glean clues about the future direction of the stock.

If that’s you, Direxion has two new ETFs that might pique your interest. Those ETFs are the Direxion All Cap Insider Sentiment Shares (NYSE: KNOW) and the Direxion Large-Cap Insider Sentiment Shares ETF (NYSE: INSD).

Both funds set sail earlier this month, marking Direxion’s second foray into the unleveraged universe. A previous attempt with an unleveraged airline ETF was, well, grounded to say the least. In this week’s edition of Under The Hood, we’ll get to “KNOW” the Direxion All Cap Insider Sentiment Shares, which tracks the Sabrient Multi-Cap Insider/Analyst Quant-Weighted Index.

With an expense ratio of 0.65%, KNOW’s quantitatively-weighted index includes the top 100 companies from the S&P 1500 Index. That leads to an almost 24% allocation to energy names, nearly 19.6% to financials and over 14.5% to technology and consumer discretionary stocks.

No stock gets a weight greater than 2.6% and the top-10 roster is chock full of familiar names including Lincoln National (NYSE: LNC), MetLife (NYSE: MET), HollyFrontier (NYSE: HFC), Valero (NYSE: VLO), Smithfield Foods (NYSE: SFD) and Hess (NYSE: HES).

So what exactly is KNOW supposed to do? According to its fact sheet, the index the ETF tracks “reflects positive sentiment among those “insiders” closest to a company’s financials and business prospects, such as top management, directors, large institutional holders, and the Wall Street research analysts who follow the company.”

Said differently, this is arguably a niche ETF that is designed to help investors follow the smart money. You know, companies that are seeing insider buying by executives, institutional buying and those companies that are on the receiving end of favorable analyst comments.

Is there utility in an ETF that’s designed to track insider sentiment? The answer is yes and while that may surprise some critics of niche ETFs, it must be said that the Guggenheim Insider Sentiment ETF (NYSE: NFO) has been around for more than five years and has amassed over $96 million in assets under management in that time, so someone must like the idea of buying stocks that are prized insiders.

To be sure, there are differences between KNOW and NFO, but the rivalry appears to be a natural one. For now, with KNOW being less than a month old, we’re not going to pass judgment. Just know that if you want to be an insider without getting in trouble, KNOW is one ETF that can help with that.

Oh yeah, it should be noted that most executives only buy their company’s stock for one reason: Because they think it’s going up. Maybe that alone will validate KNOW as a solid new niche ETF.

This article is originally published at Benzinga.

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These four stocks delivered a 15% return last year

Posted January 4, 2012 at 2:44 am

from Dividend Growth Investor

Back in 2010 I was invited to participate in a stock picking competition. The objective was to identify the best four stocks for 2011. You can read the reasons behind my four selections in this article. The four stocks I selected included:

The Procter & Gamble Company (PG) provides consumer packaged goods in the United States and internationally. This dividend aristocrat has raised distributions for 55 years in a row.

Over the past decade, Procter & Gamble has managed to boost dividends by 10.90% per year. Analysts are expecting further increases in EPS over the next two years to $4.57/share, which represents a 16.30% expected growth. The stocks yields 3.20% and is attractively valued at the moment. Check my analysis of the stock.

Johnson & Johnson (JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide.

The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. This dividend aristocrat has raised distributions for 49 years in a row. There are only eleven companies in the world, which have managed to accomplish this task. Over the past decade [continue]…

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30 big investing themes for 2012… and beyond

Posted January 2, 2012 at 3:06 am

via Fidelity Viewpoints

What trends will shape the investment landscape in the years ahead?

In honor of the 30th anniversary of Fidelity Select Funds, Fidelity sector portfolio managers highlight 30 provocative investing themes–three per sector.

Get the details by clicking on each sector icon:

 Wealth Wire Note: You can easily invest in each sector above, minus Telecommunications, via the SPDR sector ETFs…

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Three potent reasons to get exposure a China ETF

Posted December 13, 2011 at 12:45 am

by Gary Gordon

In 2004, South Korea and Australia began exporting more to China than they did to the United States. By year-end 2008, Japan and Brazil exported more to China than to the U.S.

Not surprisingly, when the Chinese government expressed an intention to rein in rampant inflation through tighter fiscal and monetary policy (November 2010), many countries that depend on their exports to China began a year-long bearish retreat.

In fact, ETFs for resource-rich countries (e.g., Brazil, South Africa, Chile), as well as China itself, were hit the hardest.

Granted, the sovereign debt crisis in the Eurozone also played a large role in poor performance. Nevertheless, the fear that tightening in China would lead to lower demand for the world’s products, services and commodities played the largest role in damaging the emerging market growth story.

In my estimation, though, worry is being replaced by anticipation. Whereas double-digit GDP and rapidly rising consumer prices encouraged China to tighten, recent developments led to the first easing of bank reserve requirement in 3 years. Specifically, inflation had [continue]…

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Vice stocks – drinking, smoking, gambling – pulling double-digit returns

Posted December 12, 2011 at 2:38 am

by Matt Krantz

Sin is in on Wall Street as investors pick vice over virtue and pour money into drinking, smoking and gambling stocks.

“Socially irresponsible,” or “vice” stocks, especially tobacco, are paying off for investors who are focusing on these industries’ financial, not social, attributes. Shares of tobacco companies Lorillard, Philip Morris and Altria are up 34%, 29% and 15%, respectively, this year — smoking past the 1% year-to-date gain by the Standard & Poor’s 500.

Alcoholic beverage stocks aren’t falling off the wagon either. Diageo and Brown-Forman are up 14% and 13%. And gaming stocks such as Wynn Resorts and Churchill Downs are each up 14% — a welcome offset to what’s shaping up to be a disappointing year for stocks at large.

“Vice stocks are showing they are a necessary part of a diversified portfolio,” says Jerry Sullivan, manager of the Vice fund, which invests in those industries. Fund-tracker Morningstar says it has returned [continue]…

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Here’s why you should invest in Brazil

Posted December 4, 2011 at 11:26 pm

Brazil will be heavily in focus over the next couple of years since it is hosting two of the largest sporting events in the world.

by MoneyShow.com

Either of these events—the FIFA World Cup in 2014 or the Olympics in 2016—is a big deal on its own. Hosting both is both a huge coup and a tremendous opportunity from a business point of view.

Both events will require a dramatic upgrade to the infrastructure within the country, which should spur a considerable amount of economic activity.

Beyond these major sporting events, Brazil has enjoyed rare political stability for number of years. That, combined with sustained growth for the last decade, has transformed the country into a blossoming economic powerhouse.

Brazil has a number of things going for it including scale, abundant natural resources, and a politically favorable world position.

It has no significant enemies and a large world customer base—particularly China, which is anxious to acquire lots of iron ore and oil, of which Brazil has plenty.

As a result, economists are predicting that Brazil’s GDP growth should average [continue]…

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