Saturday, November 15, 2014
Friday, November 14, 2014
Internet Stocks To Lead NASDAQ To New Highs In 2015
The internet stocks are showing relative price strength after a year of price consolidation and will likely lead the NASDAQ to new highs in 2015. The largest companies by market cap in the Dow Jones Internet Composite index are listed above. Notice that Facebook (FB) and Google (GOOGL & GOOG) make up approximately 20% of the index alone. Google has been moving sideways for the majority of 2014 and I think is modestly valued relative to other technology companies. FDN is the largest ETF that tracks this index.
Monday, November 10, 2014
Russell 2000 Turns Positive For The Year. Small Cap Stocks To Lead As Risk On Trend Resumes.
The Russell 2000 has rallied hard from the October lows after being down >10% for the year. If history serves as an appropriate guide, small caps will lead the S&P 500 to the end of the year and beyond. IWM is the largest ETF that tracks the Russell 2000. VB, VXF and IJR are likely better ETF choices to track small US stock indices.
Microsoft Is Taking Off Like It Did In The Early 90s
Microsoft (MSFT) recently passed $400B in market cap. Just by looking at the above chart, it appears to be in a long term uptrend similar to that of the early 1990s.
Tuesday, November 4, 2014
Canadian Banks No Longer Leading US Banks. Trouble Ahead For The Canadian Economy?
The Canadian banks (XFN) have outperformed their US counterparts (XLF) since 2009. They have been placed on a global pedestal due to their reluctance to participate in the subprime mortgage debt and collateralized debt obligations that precipitated the Great Recession. Their balance sheets remained extremely healthy and their stock prices reflected this to this day. But that was then...
Two of the 4 wheels have blown on the car that is the Canadian economy. Precious metals and material stocks are down some 70% since 2011. Now stocks of energy producing companies are free falling in tandem with the price of oil which seems to be in global abundance despite the fact that the opposite view held the public consensus only 6 years ago. Don't get me started on the Canadian housing market.
Banks and financial sectors reflect the overall health of a country's economy. Their relative performance is predictive of the relative performance of a given country's economy. The chart above would suggest that growth in the US economy will continue to outpace that of the Canadian economy. If the Canadian bank index is unable to post new 52-week highs and/or trends lower trouble is ahead.
Sunday, November 2, 2014
Vanguard Canada Must Own ETFs for Canadian Investors. VUN and VFV.
Vanguard Canada provide the best and cheapest ETFs available to Canadian investors. Two must have ETFs for Canadian investors are the US Total Stock Market ETF (VUN) and the S&P 500 ETF (VFV). Both are NOT hedged and provide broad exposure to the US stock market and the US dollar. They are the cheapest ETFs of their kind and have extremely low management expense ratios (MER). The MER for VUN is 0.15% while the MER for VFV is a category low of 0.08%.
Biotechnology & Health Care Stocks & ETFs Continue To Lead The Stock Market Higher
Biotechnology and health care stocks and ETFs continue to lead the market. This is becoming a dominant theme within the broad technology sector. It is likely that health care and biotechnology stocks continue to grow in relative market cap weight in the major US indices (i.e. NASDAQ 100 & S&P 500).
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