In case you missed it, here’s a summary of the ETF topics and market reviews I posted to my blog during the week ending on 3/31/2013.
Despite the uncertainty and questionable outcome of the Cyprus debacle, the US markets only took a short breather before continuing their relentless match towards higher milestones. The S&P 500 finally hit pay dirt on Thursday by taking out its 2007 all-time high.
What that means is that if you were unfortunate enough to have bought the index on that day in 2007, you have now, 6 years later, finally broken even. Congratulations!
With the Fed continuing the monetization of our debt at the rate of $85 billion a month, with no indication of slowing down, some of that money finds a new home in the stock market acting as the driver to push these indexes towards “out of touch with reality” levels.
Eventually, this market orgy will end, but the timing of it is still unknown. In the meantime, we will continue holding our positions in low volatility ETFs subject to our trailing sell stop discipline, which will take us out of the market when a trend reversal finally makes an appearance.
As an aside, in terms of ETFs, low volatility does not equate with sub-par performance. There are several that have outperformed the indexes YTD by a considerable margin.
Over past week, we covered the following:
One Man’s Opinion: Have Asset Bubbles Been Formed Already?
New ETFs On The Block: Market Vectors Treasury-Hedged High Yield Bond ETF (THHY)
ETF/No Load Fund Tracker Newsletter For Friday, March 29, 2013
Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 3/28/2013
A Mixed Day On Data And Europe; Italian Political Turmoil Weighs
7 ETF Model Portfolios You Can Use – Updated through 3/26/2013
US Indexes Surge On Manufacturing, Housing Improvement; Europe Rises On US Data
ETFs/Mutual Funds On The Cutline – Updated Through 3/22/2013
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Comments 2
HI Ulli,
I have money in the Vanguard Group-which is mainly in cash-as I am afraid to do anything waiting for the bottom to drop out. On your last update to the model portfolios you mentioned to email you to ask what funds in the Vanguard group that you would recommend- rather than be totally out of the market. Any tips would be appreciated and I really like your newsletter! Thanks!
Lise
Lise,
For the past 1-1/ years, we have had good success with the use of consumer staples as they are less volatile than the benchmark indexes, yet they’ve shown great performance. While you still would need to use my recommended sell stop discipline to control downside risk, should a sharp correction occur, we have not had to use it during this recent period.
Ulli…