How to Profit from the Explosive Divorce of ETFs and Passive Investing

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The marriage of ETFs and passive investing, the current hot trend everyone's talking about, isn't a match made in heaven.

In fact, friction between the two is so huge, a divorce could crash markets irreparably.

On their own, both buying into ETFs and investing passively make sense. But loading up passive investing portfolios with ETFs – especially benchmark and market index following ETFs, which are precisely what passive investing calls for – is the equivalent of rubbing two sticks together over a mountain of dry kindling.

I've given you the numbers on how big ETFs have become and how hot passive investing is getting. And, to the chagrin of ETF sponsors and regulators, I've unpacked the truth for you about how ETFs are created and destroyed and how the market professionals with the inside track on trading ETF shares alongside the underlying securities they're made from are self-serving.

Now, I'll tell you what you need to do to protect your passive portfolio, your actively managed portfolio, and your you-know-what when the fire gets lit…

Here's What Will Spur the Next Big Crash

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Exchange-traded funds (ETFs) are all about relationships, so the marriage of ETFs and passive investing looks perfectly fine on the surface. But frighteningly, the basis of their relationship and the reason they look like they pair well will actually be their downfall.

There's the one thing you need to know about ETFs that you probably have no idea about.

I'm going to use a scary word to describe ETFs, although you won't hear the word used when it comes to ETFs anywhere else. That's because not many people understand that the word absolutely applies.

This Popular Investing Strategy Will Bring the Next Big Crash

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Exchange-traded funds (ETFs) are great. They're packaged investment products that trade all day like stocks.

Just about any asset class or portfolio product Wall Street thinks you want to trade or leverage your bets with – even inverse ETFs that go up when their underlying market indexes go down – they are all here.

This Disruptive Trend Could Soon Be Worth $86 Billion - Here's How Investors Can Get In Right Now

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Over the past two years we've talked a lot here about the burgeoning industry known as "fintech," a portmanteau of "financial technology," or how financial transactions are moving to digital platforms.

While fintech began as a way to describe how technology is being used to improve behind-the-scenes workings of financial institutions, this disruptive force is now changing everything from how we shop and how we bank to how we apply for credit – anything to do with money is ripe for fintech disruption.

It's even changing how we pay for dinner…

We've all been there – that awkward dance that occurs when the check comes. There are either too many credit cards, or not enough people with enough cash, or the restaurant refuses to split the bill, or no one can agree how to split it evenly…

In recent years, we've seen an explosion of smartphone apps that involve what's known as peer-to-peer (or P2P) payments. These allow anyone to connect a card or a bank account to the app, and send payments instantaneously to anyone else on the app.

All of a sudden that awkward dinner bill – and thousands of situations just like it – get a whole lot easier.

Even social media giants have incorporated P2P payments into their interfaces. Any smartphone user with a credit card has at least five options to get a small sum to a peer almost instantly.

As of right now, none of these innovators have figured out how to monetize P2P payments. That's going to become increasingly important as the marketplace grows – and as investors line up to profit from one of the market's hottest trends.

Here's what you need to know to get caught up, and the one company that's ready to cash in on this explosive trend…

The Illusion of Bargain Retail Stocks - and How to Trade Them Now

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Everyone loves a sale, unless that sale is an investment you bought at half-off and then continued to plummet to zero.

That's already happened to a handful of once-promising retail stocks.

And they're just the tip of an iceberg.

Not only are more name-brand retailers melting down and preparing to declare bankruptcy, the Real Estate Investment Trusts (REITs) that own and operate the malls they're in are headed for the half-off sales bin.

But if you feel like a kid in a candy shop surrounded by these "bargains," you've been duped.

Some retailers will declare bankruptcy and be buried once and for all. Some will declare bankruptcy and rise from the ashes. And some will rise from the ashes just to declare bankruptcy again.

Here's the deal on retail stocks and REITs… and how to trade the dying, the living dead, and the comeback kids…

Snapchat's Success Is Already a Lie

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According to some Wall Street bigwigs, there are plenty of reasons to own Snap Inc. (NYSE:SNAP), the creator of Snapchat, which went public yesterday….

Those bigwigs, by the way, aren't analysts, but the underwriters of Snap's IPO…

Morgan Stanley and Goldman Sachs just pocketed a cool $20 million each (and counting) to debut the company.

Good cheerleading on their part, and the rest of Snap's underwriters (J.P. Morgan, Deutsche Bank, Barclays, Credit Suisse, and Allen & Co.) will drive up Snap's price. This will allow them to exercise a "greenshoe" option to sell an additional 30 million shares – for more fees, of course.

None of these Wall Street heavyweights have initiated analysts' coverage of Snap, and probably won't for a while. Or, to be perfectly honest with you, ever.

If the reasons to own Snap come from underwriting cheerleaders, who aren't going to let their analysts cover it, you need to know the real score… and the reasons underwriter's analysts won't ever cover Snap.

Here's who is lying to you about Snap and why…

Here's What National and Global Politics Have in Store for Our Rally

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Let's put politics aside, for a moment, and look at the facts. Markets liked what they heard last night from President Donald Trump.

Asian markets reacted favorably overnight, European markets are up nicely this morning, commodities prices are rising, and U.S. stock futures (pre-open) point to another round of record all-time highs.

But politics are the bump in the road ahead.

A Simple Alternative to Killing the Fiduciary Rule

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I admit it, sometimes I get worked up.

Especially when it seems that unsuspecting investors, retirees, and anybody else who's trying to navigate the capital markets in pursuit of the American Dream is about to get fleeced – again – by Wall Street.

A perfect example: getting all worked up over Wall Street's attempts to kill the Labor Department's Fiduciary Rule, which is supposed to go into effect this April.

But you can't let this stuff get to you. Because Wall Street is always trying to find the next end-around that will allow them to skirt the most expensive regulations.

It's better to try and come up with simple, common-sense solutions to stop the Street from squirming through whatever loopholes they can find.

Well, I found one. And it would save us all a lot of hypertension and sleepless nights.

Here's what should replace the Fiduciary Rule…</strong

What 2017's First Big IPO Says About Where the Market's Heading

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Snap Inc., the first tech IPO of 2017, is racing ahead at breakneck speed. As recently as November, one sell-side analyst thought Snap's coming out party could result in a whopping $45 billion valuation. As of Snap's roadshows in London on Monday and in New York yesterday, Snap's talked-down price range of $14-$16 values it […]

Put the Market into Perspective If You Want Real Profits

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Right now, our market (in whatever terms you measure or define it) has a huge bid under it.

When traders refer to a "bid" under the market, they're referring to buyers in the wings who are ready to buy something at the posted price or a slightly lower price.

Bidders in the wings can have orders to buy down with their brokers, poised at the ready on a trading platform, or even wait until they get a whim, watching for the right price or feeling to hit them.

What does this mean for the market as a whole? It will go a LOT higher.

It's easy to make money if you see the big picture, if you can see which way the market is going. Let's forget about individual stocks for now… there's only so much success you can have in the stock market if you are unable to step back and see it for what it truly is.

In truth, the market's been going up steadily since 2009. It will continue going up, and I can prove it by sharing what I understand of the big picture.

I'll paint for you a stellar background, a clear middle ground, and a compelling foreground.

Here's what you need to understand about the beauty of the market right now…