Yesterday may have been the best first day of an NCAA Tournament ever in terms of exciting games and bracket upheaval.It is days like yesterday why so many people love the tournament so much, wow.
As I've mentioned a couple of times I will be giving a presentation at the Vancouver MoneyShow on April 7 about portfolio construction with ETFs. I've done this a couple of other times updating with new funds as they come out. The point is not run out and implement the portfolio but more like think about the access that ETFs offer and the flexibility they allow in building a portfolio.
In the presentation I go sector by sector and talk about each fund I use, for most sectors I include 2-4 ETFs. The financial sector is very difficult to construct. The way I look at the world I want no part of the financials in the US, Europe, Japan and China so it makes the task difficult. In client accounts we own banks from Chile, Australia and Canada. The weightings of financials in those respective iShares country funds are 9%, 44% and 34% so using them as proxies for financials is iffy except for maybe the Australia fund. The banks in Singapore are in pretty good shape so iShares Singapore (EWS), 49% financials, could be a proxy as well. The iShares Chile (ECH) and iShares Australia (EWA) are both in my ownership universe.
Other possibilities could include the GlobalX Colombia ETF (GXG) which is 46% financials, Market Vectors Poland (PLND) 38% and Market Vectors Egypt 42%. There are a couple of other one like these but you get the idea. I'm not going to front run the presentation but as handy as ETFs are there are gaps. The obvious way to fill this particular gap, the way I have framed it, is with individual stocks. The is issue here is that there are a bunch of financials I don't want to own and only a few that I do. It is very unlikely that an ETF provider will be create the Commodity Based Economy, Oh & Singapore Too Financial Sector ETF.
Enjoy today's games!
17 comments:
Roger, perhaps you can answer this question for us. If a person has money in a Roth and chooses to use it as a trading account, are there any tax implications that are not obvious. I understand no federal tax accrues regardless of the frequency of trading but are there states or foreign taxes due on these types of roth account transactions? Thank you.
i only know about the obvious. for any potential obscure taxes you need to ask a tax advisor.
Roger,
I have been looking into the CFA program. Completion is widely seem as a indication of competence. It seems very challenging, but a review of the curriculum seems to cover many topics that are discussed here. What are you opinions of earning the CFA? I noticed from your firm's website you have no professional designations. Why?
the CFA program tends to come at analysis from a particular viewpoint that does not ensure success. plenty of CFAs were wrong about both bear markets of the last ten years as were plenty of non-CFAs.
as a CFA charterholder I can say that this was a very intensive process that does a good job at selecting articles and books from a wide source of educated financial professionals. you cannot generalize about a program that selects from a vast array of topics from many different points of view from scores of authors.
you get solid exposure to quantitative aspects of finance as well as theoretical papers on risk management -- such as I remember a case study on Nick Leeson/Barings and the importance of managerial processes and administration -- as well as the shortcomings of Value At Risk etc...
Here is a tangible example of something that I lived first hand. I remember Richard Bookstaber was selected for an article (this was nearly 10 years ago) and he offered commentary on risk management (as 1 of hundreds of reading assignments). Bookstaber went on to later write 'A Demon of Our Own Design' - published in 2007 -- a book I only knew about because I remembered the author from the CFA program. this book essentially set the stage for our financial system as unstable and was extremely timely and helped me tremendously during the meltdown -- he has a blog here which I have been reading since its inception in July 2007 -- 1 month before the meltdown kicked into gear. this was good solid tangible arguments that saved our clients a ton of money:
http://rick.bookstaber.com/
Just said on CNBC -from Boston College study. 41 Trillion in assets will go to the next generation. Do you believe it? That is way more than I remember previous studies showing.
ETFReplay,
Thanks for your reply. I am a passive investor living off my portfolio. I am interested in the CFA purely for educational purposes and not for professional reasons. I do have some exposure to finance and accounting from some MBA work and an engineering undergrad. I have plenty of time for the coursework.
My question is, is it a worthwhile pursuit in my circumstances? Or am I nuts and should get a life? The curriculum would seem to aid active investors more than passive. Also, I believe the study materials may have changed since you completed the program. Instead of readings, all the material is presented in six books for the level I exam. 2745 pages.
For those interested, here's a link to the Level I course outline:
http://www.cfainstitute.org/cfaprog/resources/l1_outline.html
Any comments from the regulars would be appreciated.
I've been hearing about wealth transference since 1989 when i first started at Lehman Brothers.
rhetorically speaking are your parents alive? how much, if any, money do they have? how certain can you be about how much they will need? if they have previously been responsible how certain can you be they will continue to be responsible (this is a legitimate issue)?
In my conservative opinion relying on this is a bad idea but I am quite conservative (hence my expecting zero entitlements).
Unbelievable first day...wish I could have seen more of it. Just got an hour while eating dinner.
So can someone tell me why college football thinks the bowl system is better than this? They claim the money, but come on. Do they really think the Preparation H bowl will raise more dough than what basketball provides.
to the extent it is all about money would be surprised if a 16 team tournament netted anywhere near as much as having half the teams (literally) play in a bowl game
There's no real comparison between football money and basketball money. Either the existing football bowl system or a new football playoff system pull in far, far more money than basketball playoffs do.
I think, if the football people ever decide (or get forced) to do a tournament, it would logically consist of a 16 team playoff that utilized some of the existing bowls as early-round games, the current BCS bowls as the quarter-final round (Wouldn't it be nice, for a change, if someone other than the 2 schools playing really cared who won any of those games?), semi-final round perhaps at the 2 top seeds home, and a championship game on a neutral field. The bowls not folded into the playoff could continue as they are currently played. December Madness; it would be great (and a money maker, to boot)!
They would never get rid of the bowls, but just think of how many people will watch the 16 team playoff. College football already dominates any other college sport as far as viewership, but this would add a new level to the excitement.
Today we had double the volume from the other days. However, we did not make many new lows with a down day abd lots of volume. This tells me that people are taking profits. Does that mean that we may get a meaningfull correction?
Best,
Jeff from Milan, Italy
I take it you're looking at something besides the S&P 500/Dow? Their volume looks about normal.
Question. If you're using the 200 day moving average as an indicator, do most people use that as an indicator for EVERYTHING? For U.S only, or for U.S. large cap only?
I'm wondering if people who watch moving averages watch many moving averages - in other words they watch the S&P 500, one for U.S. small cap, one for int'l large cap, one for emerging markets, etc.
Jeff, more volume on an options expiration day may not be noteworthy--especially quarterly expiration.
After happy hour so take comments with a grain of salt especially since I thoroughly enjoyed happy hour, but 200 dma is a back stop if better analysis fails.
Micro analyzing the markets is a fools endevour. We are in a bull market and near term volatility will not change this.
GES
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