Posted October 18, 2011 at 3:11 am
From Fidelity Investments
Developed countries have found themselves in the economic doghouse of late, saddled with debt, financial crises, and stock markets that have produced middling returns with maddening volatility.
A striking exception has been Canada, where stocks have risen an average 13% a year over the last 10 years.
A hypothetical $1,000 investment in the S&P/TSX Composite Index, an index of the stock prices of the largest companies on the Toronto Stock Exchange (TSX), on August 1, 2001, would have been worth $3,455 on August 31, 2011–versus only $1,305 had you invested it in the S&P 500® Index (.SPX) during that same period.
In an interview with Viewpoints, Doug Lober, manager of Fidelity Canada Fund (FICDX), discusses what he believes has been driving Canada’s strong performance—oil, gold, conservative banks, and solid economic policies—and where the opportunities may lie ahead.
Q. How has the Canadian market’s performance compared with that of other developed economies’?
Lober: For the 10 years through August 31, 2011, the Canadian stock market gained about 13% annually in U.S. dollars. That’s amazing in comparison to the U.S. and Japanese markets during the same time period, which have been essentially flat, and the MSCI EAFE® Index of developed markets, which had annualized returns in the low single digits (see chart below).
About two-thirds of Canada’s return has come from actual stock market gains, with the other third from appreciation in the Canadian dollar. The returns have come largely as a result of increased demand for commodities, which has driven up prices on energy and materials stocks.
Posted October 17, 2011 at 11:46 pm
by The ETF Professor
When you’ve had your fill of large-cap ETFs and small-cap ETFs just aren’t risky enough, don’t fret because you have options. Small-cap is not the final frontier when it when it comes to market cap spectrum. There is the world of micro-cap stocks.
This highly speculative universe is populated by stocks with market values from $50 million to $300 million. Simply put, stock picking with micro caps is a trying task. For every one winner an investor stumbles upon, he could easily have 10 losers.
That means ETFs are a valuable tool for investors looking for micro-cap exposure. And why not? Many of these funds have been battered by the recent downturn and if the market rallies in earnest, these ETFs could easily outperform their large-cap peers.
With that, here are four micro-cap ETFs your broker forgot to mention…
Posted October 6, 2011 at 3:55 am
by Ryan Mallory
By far one of my best screens in determining who is buying what on the street! What you will find are those stocks that, among other variables that I use, 1) Gaining an increased amount of coverage by brokerage firms and analysts, and 2) Being upgraded on a regular basis.
This is a good screen to show you where the smart money is putting their capital to work at, without you having to actually ask them.
Two of the five stocks listed below are steel companies which is interesting to me considering how much of a beat down they have gotten of late.
And should this stock screen prove to be right, there stands to be a huge gain to be made in US Steel Corp (X) and Steel Dynamics (STLD)
Here are 5 Stocks The Street is Buying [continue]…
Posted September 29, 2011 at 10:55 pm
by Jason Raznick
Barron’s Jim McTague recently wrote an article highlighting GOP presidential contender Ron Paul’s investing strategy. Not surprisingly, the Texas Congressman has whipped the markets with his stock picks, which consist primarily of buying precious metals miners.
The author of the Barron’s piece, hilariously, contends that Paul follows a “stopped clock” investment strategy which “finally seems to be paying off.” While he certainly is a long-term investor who rarely buys or sells, the idea that Paul’s strategy is all of a sudden paying off is ridiculous.
The fact is that Representative Paul has predicted nearly all of the major economic developments in recent years, and as such, has killed the major market averages with his approach.
Is Jim McTague aware that gold has been in a bull market for the last 10 years and that Ron Paul predicted the housing collapse, the plunging dollar, and most obviously, the rise of precious metals?
In his most recent financial disclosure, Paul had between [continue]….
Posted September 28, 2011 at 3:47 am
Timberland has long been a defensive investment for the wealthy; now ordinary Joes can buy in, too.
by Brett Arends
I grew up next to a forest. I remember, as a child, hiking through the trees with our two golden retrievers in tow and, hilariously, panning for gold in the stream.
I started with high hopes. I saw plenty of gold — all fool’s, alas.
Investors, too, have been hunting for riches in the forests — and these days, they’re also seeking shelter there.
Market guru Jeremy Grantham, whose investment firm, GMO, has historically been bearish about stocks, keeps a large chunk of his personal portfolio in timber — seeing it as a valuable defensive investment in a tumultuous market like this one.
For similar reasons, Harvard University has invested in timberland for many years. And Boston financial-services giant John Hancock owns 5.3 million acres of timberland around the world on behalf of institutions and rich clients.
There are good reasons for all this interest. The correlation between timber and other assets is low, which means timber is not very likely to lose value when, say, stocks are tumbling. Over the past two decades, the benchmark timber index, tracked by the National Council of Real Estate Investment Fiduciaries, has produced a tenfold return.
And it’s a steady performer in tough economic times. As Grantham once wrote, timberland “has had a history of rising in all great equity bear markets.”
He adds that it’s “very safe: If the sun shines and it rains, the trees grow about on schedule.”
But there’s just one problem. Unless you are a major institution or a very wealthy individual, investing in timberland is [continue]…
Posted September 28, 2011 at 1:55 am
by Stoyan Bojinov
As the ETF industry has expanded rapidly in recent years, the universe of asset classes and investment strategies accessible through the exchange-traded wrapper has increased dramatically.
In addition to funds offering exposure to natural resources and volatility–two asset classes previously beyond the reach of many investors–a number of products have popped up that seek to deliver opportunities to tap into intriguing investment methodologies in a cost efficient and time efficient manner.
One area of tremendous interest focuses on dividends; there are literally dozens of ETFs that are designed to concentrate exposure on dividend-paying stocks, from those linked to dividend-weighted methodologies to those with stringent consistency requirements for inclusion.
Popular equity funds in the space include DOD, IDV, and HDV; while products with international flavor like PID, DWX, and EDIV can help investors expand the geographic scope of their portfolio’s holdings.
Dividend-focused ETFs may be appealing to a number of different types of investors. For those seeking relatively low risk equity exposure, dividend-focused strategies allow for a dialing back of risk while still keeping a toe in the water. For those seeking to beef up current returns with bond yields at all time lows, some of the yields paid out might be rather attractive.
For investors seeking broad-based stock exposure tilted towards companies with the highest dividend yields, funds such as [continue]…
Posted September 28, 2011 at 12:45 am
by John Waggoner
If you haven’t looked at your financial statements lately, well, it’s no wonder. Stocks have all the appeal of a box of smelt.
That explains why collectibles have been hot. When people get disillusioned with financial assets, they gravitate toward things they can hold in both hands.
Before the stock market tanked in 2008, big collectors just thought they were spending money, says Greg Rohan, president of Heritage Auctions in Dallas. “Now, they think they’ve done a really good job at diversification.”
Because of economic hard times, the collectibles market has split in two: The very high-end, top-quality collectibles and, well, everything else.
“In the middle market, whenever you think it has reached its bottom, price-wise, it drops again,” says Harry Rinker, host of Whatcha Got, a syndicated radio show on collectibles.
Posted September 27, 2011 at 3:11 am
The Western world’s skittishness, skepticism and staunch opposition when it comes to nuclear energy won’t stand in the way of its production elsewhere in the world. It will be full steam ahead in China, India and other developing nations, says Casey Research Chairman Doug Casey, and the Western world is tiny in comparison.
In fact, “I’d say uranium is a great place to be for at least the next generation,” he tells us in this Energy Report exclusive. With ever-advancing technology enabling economic recovery in places where it previously wasn’t possible, he’s also optimistic about natural gas and oil.
The Energy Report: Next month, at the sold-out Casey Research/Sprott Inc. “When Money Dies” summit in Phoenix, you’re on tap for a presentation entitled “The Greater Depression Is Now.” Your colleague, Marin Katusa, is on the roster too, talking about “Making Money in Energy.” Marin recently told us there’s a buying opportunity for uranium companies. Given Fukushima’s repercussions in terms of the nuclear energy industry, are you bullish on uranium?
Doug Casey: Absolutely. It’s unquestionably the safest, cheapest and cleanest form of mass power generation. That’s not to say that there aren’t problems, as the Fukushima incident made clear. As much of a disaster as that was—a combination of earthquake, tsunami and radiation leakage—so far it’s just been a big industrial disaster.
I daresay that if government hadn’t been so involved in nuclear power these last 50 or 60 years, the technology would have been much further along. Nuclear power would be much safer, cheaper and cleaner than it is today. We might, for instance, be using thorium, which appears to be better than uranium in many ways. We would almost certainly have much smaller, cheaper, and robust reactors.
So, yes, I’m a huge uranium bull. If you want mass power, you need nuclear power. And today that means uranium. I’d say uranium is a great place to be for at least the next generation.
TER: But considering the fact that governments remain involved and people are even more squeamish about nuclear power post-Fukushima, won’t we see a stall in nuclear power and development?
Posted September 22, 2011 at 1:53 am
by Tim Hanson
Hedge fund manager Bill Ackman made waves in the financial community yesterday by announcing that he was making a very bullish bet on the Hong Kong dollar.
We’ll get to the details behind the strategy in a bit. The real “Aha!” is this: Even after the market’s recent sharp decline, one of the world’s leading stock pickers is, evidently, not that interested in buying stocks.
Back to That Trade
With its value currently pegged to the U.S. dollar, the Hong Kong dollar could potentially be an inflation buster (as well as an attractive return instrument) provided Hong Kong unpegs its peg — one put in place to provide stability in a relatively small economy.
So why would Hong Kong do such a thing?
Posted September 19, 2011 at 1:36 am
by Karl Stevenson
Right now the mainstream news media is focused on Europe. The EuroZone is finally seeing what the markets think about the true value of their currency. And for the very first time in months, the Euro is starting to collapse…
Radical change is in the wind.
The Euro has been primed for a selloff for quite some time. It’s been in the cards. European banks are unstable, Greece is once again defaulting, and the tension between the spenders and savers in Europe threaten to blow apart the Euro. But despite all the negative forces impacting the Euro, it’s been holding up.
Simply put, the Euro has been treated like a protected species. It didn’t matter if news of default or debt contagion hit the wires… the Euro somehow stayed above $1.40.
But finally that’s changed…