Category Archives: Stocks, ETF’s, and Mutual Funds

What Is An Exchange-Traded Fund? Should I Buy One?

An exchange-traded fund (ETF) is a basket of securities that trades on an exchange like a stock. In the event you don’t know how the stock market works, shares of public companies trade at various prices based on demand. The distinguishing factor with an ETF is that, rather than representing ownership in a single company, it tracks an index such as the S&P 500 or Dow Jones Industrial Average. The price of an ETF, similar to a basket of stocks in a mutual fund, will vary based on the performance of its underlying holdings. If an ETF represents an index with thirty different companies and all of them are trading up on a given day, the offering price of the ETF will move up accordingly.*

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Simple Rules for Making Money with Stocks

Recently I had a client call in to sell his position in a fertilizer stock in which he made a 20% profit. His reason for selling was that the stock showed signs of weakness and he thought the Federal Reserve speech might spook the market into a downtrend. Fair enough. A few hours later I had a different client call to buy the same stock, saying he saw signs of weakness and thought it might be a good time to buy the stock. Plus, he thought the Fed speech might be positive and give the markets a boost. Two smart guys with totally different opinions. The experience reinforced my belief that most investors don’t know a thing about the markets. Trying to guess the short-term direction of a stock is usually a losing proposition. I’ve been thinking for the last few hours about what strategy a moderately conservative investor could use to seek out some growth in their portfolio without taking on too much risk. The below strategies should help you mitigate risk and hopefully teach you a thing or two about the movement of stocks.

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Update on WisdomTree Investments

WisdomTree Investments recently released earnings-based exchange-traded funds. This follows a pattern established by WisdomTree to market fundamentally-weighted ETFs which are unique and potentially valuable to a new generation of investors. Luciano Siracusano, director of research for WisdomTree, appeared on CNBC in late March to talk about the appeal of this unique product line. According to Siracusano, research has shown that creating indexes based on earnings and dividends can potentially increase dividend yields, lower P/E ratios, reduce overall volatility, and increase investment returns. Does this sound too good to be true? Visit the website or read up on Jeremy Siegel’s research which back-tests a multitude of corresponding data. You may also find this interview from Seeking Alpha with Siracusano interesting as well.

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Interview with Jeffrey Feldman, Founder & Chairman, X-Shares Advisors, LLC

The following is an exact transcript from my interview with Jeffrey Feldman, the founder and chairman of X-Shares Group, LLC. Jeff is an innovator in the ETF arena and his products are noteworthy. Below you can read an educated opinion about where exchange-traded funds stand in the investment arena along with information about the HealthShares product line. You also might learn something about the healthcare industry and the underlying problems which helped create the demand for these funds. As you’ll see, X-shares plans to continue innovating on their unique indexing strategies and launch more ETF platforms in the coming months. Enjoy!

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WisdomTree Investments to launch 20 ETFs on Friday

WisdomTree Investments plan to launch 20 exchange-traded funds. This is the largest daily release of ETFs to enter the market (June, 2006). The common characteristic of the WisdomTree family is dividends. Each of the 20 funds pays a dividend and the yields are fairly high compared with other equity-based ETFs. The fund family is also geared internationally with 14 non-US funds dominating the six US funds. Of the international funds, three track Europe, three track Japan, two track the broader Pacific and six are broad-based international funds.

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Interview with Noel Archard, Principal: The Vanguard Group

ETF Investor is delighted to publish an exclusive interview with Vanguard Group “ETF Boss” Noel Archard (pictured left). Noel Archard heads Vanguard’s VIPERs® Institutional Sales Team. He was previously responsible for the product management of the VIPERs® lineup across multiple business lines within Vanguard. Mr. Archard has been involved with Vanguard’s ETF program since 2003. Seeking Alpha contributor Russell Bailyn (pictured right) spoke with Mr Archard on April 20, 2006, in an interview arranged by Seeking Alpha for publication on ETF Investor. This article is a paraphrase of Mr. Archard’s responses, should not be viewed as verbatim quotes from Mr Bailyn or Mr. Archard, and is best used as one among many information sources. You can visit the article below, or read it here.

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