The Dow made new highs this week, and the dollar hit 26-year lows. What a combination! Without getting involved in the futures market, you can still participate in a rising Euro/declining Dollar scenario.



The chart shows FXE, an ETF that tracks the price of the Euro currency. It pays a 2.32% dividend and last year returned slightly over 13%. It’s only been around for some 16 months but it has been very stable during times of market turmoil (May/June 06). The worst DrawDown over the past 15 months (MaxDD%) was a very small -3.27%, which occurred on 7/18/2006.

One of the reasons for that stability is that once currencies enter into a trend, they tend to stay in it for a long time—sometimes many years. While the momentum figures are all positive, you still need to protect yourself with an exit strategy should this market reverse. I recommend using a 10% trailing stop loss point.

I (or my clients) currently have no positions in FXE, but I might consider some exposure. If I do, it won’t be more than 5% of portfolio value.

My latest No Load Fund/ETF Tracker has been posted at:

http://www.successful-investment.com/newsletter-archive.php

Extremely bullish sentiment caused by good earnings news pushed all major indexes to new lifetime or multi-year highs.

Our Trend Tracking Index (TTI) for domestic funds rallied higher and now sits +5.32% above its long-term trend line (red) as the chart below shows:

The international index made new highs as well and has now moved to +9.42% above its own trend line, as you can see below:

For more details, and the latest market commentary, as well as the updated No load Fund/ETF StatSheet, please see the above link.

Double click on the charts to see an enlarged image.

You will never, ever hear any predictions from me. I am merely following trends not trying to get egg all over my face.

But the extremely bullish crow is at it again. With the Dow having set a new intra-day high yesterday of 12,838.46, the next milestone of 13,000 is just a slight push away and 14,000 is appearing on the horizon.

Sure, the domestic economy appears stable and global economic growth is strong. If that milestone is reached, great, but I won’t hold my breath. The markets have a way of punishing those who are most convinced of its future direction.

Don’t mortgage the house and hog the credit cards based on predictions and throw it at Wall Street. Stay prudent and track your sell stop points. Otherwise, you might resemble the guy who does sit ups under his car.

Last week’s article on the latest in the SubPrime loan arena really irked me. Turns out that consumer groups called on congress to revise the current bankruptcy law to save the homes of borrowers drowning in the rising tide of foreclosures.

I am certainly a sympathetic person, but that smells like another government bailout to me. Shouldn’t a potential homeowner applying for a loan have some responsibility as a fully functioning adult in the wealthiest country on earth to know what he is getting into when purchasing a piece of real estate?

It just rubs me the wrong way. If this bailout comes to pass, surely it could be expanded. Maybe if you as a mutual fund investor lost money during the last bear market, you should be able to apply for a refund?

Of course, I am being ridiculous, but what’s your view?

A few days ago, MarketWatch featured another update of their so called ‘Lazy Portfolios.’

If you missed my previous blog on it (http://thewallstreetbully.blogspot.com/2007/01/beyond-ridiculous-portfolio-for-all.html), it’s a selection of various Vanguard low-cost, no load (good idea) index funds. In various configurations, it has outperformed the benchmark S&P; 500 index over 1, 3 and 5 years.

The repeated chest bumping every quarter is all about the fact that no timing and no trading is necessary. That’s good; I am all for limited trading and holding on to investments that are going up.

I am just wondering why a longer performance period was not included. For example, how about looking at a 7-year period, which would include the last bear market? Could it be that the downturn in the market from 2000 to 20003 took such a huge bite out of that portfolio that it’s better not to report?

That’s what the numbers say. As I reported before, the ‘Lazy Portfolio’ only lost 30% vs. the S&P;’s 33%. If I had owned the lazy portfolio, and not the S&P; 500, I would have felt so much better, how about you?

If you are planning to employ the services of a professional to help you manage your portfolio, you need to know that not all financial advice is regulated in the same manner.

For example, commissioned brokers operate on a different standard than do Registered Investment Advisors. Since I am a fee-only investment advisor, I definitely have a bias as to what I believe is most appropriate for the investing public.

So what is the difference in terms of regulations and how might it affect you?

Just yesterday I came across an article called “How All Financial Advice is Not Regulated the Same.” It’s a well written piece that will thoroughly enhance your understanding about this important topic and will help you better decide which type of financial service professional is right for you.

You can read the full article at:

http://business.mainetoday.com/financialsense/010910.html