I’ve named the five ETFs in this portfolio. Explained my ideas on allocation money among those five ETFs and their associated asset classes. And discussed the importance of knowing what index an ETF follows. Now it’s time to explain one last thing to complete the set up of this new portfolio: Why I’ve positioned it next to my Volatility Portfolio on JugglingWithKnives.com and JubakAM.com.
In my daily trawling through the market I come upon lots of tidbits of knowledge that I think are important to investors but that don’t justify a full post. I’ve decided to start compiling these notes here each day in a kind of running mini blog that I’m calling Notes You Need. This mini-blog includes items like this from today: “11:40 a.m.: The PCE Price Index, the Federal Reserve’s preferred measure of inflation rise by 0.4% in September and is now up 1.6% year over year. In August the index was ahead 1.4% year over year. The core index, which excludes food and energy, was uo 1.3% year over year. Nothing here to change the odds on the Federal Reserve raising interest rates at its December 13 meeting.”
Over night Chinese stocks fell the most since early August. Sovereign bonds led the way lower, extending a monthlong retreat on fears that the government will step up efforts to reduce leverage in the financial system. The Shanghai Composite was down by as much as 1.7% on Monday before closing down 0.77%. The ChiNext index of smaller stocks closed off 2.12%. Bond prices fell.
Last week’s drop has again led to the question “So where’s the volatility?” After all it’s not like there aren’t dangers in this world that might lead a trader to bid up the price of protecting against those dangers. It’s certainly not in the VIX, which looks for volatility in the S&P 500 future. But there’s actually plenty out there. It’s just all in the Treasury futures market where traders are hedging their bets on 10-year and 30-year Treasuries big time. The implied volatility in those futures markets has soared in the last couple of weeks.
A very heavy week for earnings will reach a crescendo on Thursday, November 2 with reports from Alibaba and Apple. The excitement isn’t surprising after the huge earnings that Amazon (AMZN), Alphabet (GOOG), Microsoft (MSFT), and Intel (INTC) delivered this past Thursday, October 26. This week Facebook (FB) is the Wednesday, November 1, warmup act.
I certainly don’t intend to turn the Perfect 5 ETF Active Passive Portfolio into a trading portfolio, but when facts on the ground change, I do want to respond. The recent overwhelming election victory of Japanese Prime Minister Shinzo Abe has given Abe-nomics renewed life. That means financial markets and Japan’s huge export sector can count on continued policies from the Bank of Japan that weaken the yen versus the currencies of trading partners and that look to increase growth in the Japanese economy from the country’s export sector. Japan’s stock market has been on something of a tear in 2017 and I think that’s likely to continue
I can finally tell you about an epic FREE Webinar event that I’m going to be a part of. It’s called Wealth365 Summit. Over the course of six full days, from January 16-19th–the financial industry’s best speakers will come together to share exclusive strategies and the latest and greatest information in the trading and investing realm. Speakers include folks like Jim Oberweis, Jack Schwager, Louis Navellier–and, of course, yours truly.
Before the recently concluded 19th Congress of the Chinese Communist Party, President Xi Jinping had repeatedly stressed his goal of doubling China’s real GDP from its 2010 level by 2020. The goal was absent from Xi’s three-hour speech at the opening of the meeting.
The economic data this morning paint contradictory pictures on the strength of the U.S. economy. On the one hand GDP in the third quarter grew at a better than expected 3% annual rate. On the other hand, real final sales to domestic purchasers, which strips out the effect of trade and inventories, the two most volatile components of the GDP figures, grew at only a 1.8% rate. That’s the slowest rate since early 2016.
Brazil’s President Michel Temer has once again escaped a trial for corruption after an effort to send charges against Temer to the Supreme Court failed to get the necessary 2/3 majority in Congress required before a sitting president can be forced to stand trial.