They're called "pure-play" exchange-traded funds (ETFs). And they're the latest rage in the ETF sector.
But are they too much of a risk?
According to Dictionary.com, a mutual fund is an investment company "that gives small investors access to a well-diversified portfolio of equities, bonds and other securities," professionally managed to "match the objective stated in the (fund's) prospectus."
Larry D. Spears
Article Index
Eight Semiconductor Stocks To Charge Up Your Portfolio
Today's world literally runs on semiconductors. Virtually every device that plugs in or uses a battery has its functions controlled by semiconductors of one type or another. And, with spending curtailed in the recent financial crisis, many of the semiconductors in use are either wearing out or going out of date. But, good times are here again for semiconductors. Here's how to make a profit on the new semiconductor boom market.
Seven Cash Cows That Point the Way to Profit
In uncertain economic times, every investor needs a little extra cash in their pocket. These stocks should do the trick. We're not talking about commodity plays here, rather these "cash cows" are the companies with enough "moo-lah" to invest in their own growth... something that should definitely pay off in the long run for investors. Check out our "cash cow" stocks in this report.
The 10 Keys to Short-Selling Profits
Short sellers took a lot of flak for their alleged role in the stock market meltdown of 2008-2009, getting blamed for artificially depressing stock prices, exaggerating the impact of the bad economic news rolling out of Washington and exacerbating the volatility that intensified the financial panic experienced by investors and the general public.
That last allegation was particularly troublesome to market regulators, especially after stock-market researcher Birinyi Associates traced a sudden sharp rise in stock volatility back to mid-July of 2007, a point coinciding with the repeal of the so-called "uptick rule." The uptick rule was a Depression-era regulation that allowed the short sale of a stock only when the prior trade had resulted in an upward move in its price.
That concern over volatility led to a lot of official posturing as the government struggled to come up with solutions to prevent future market mayhem, the result of which (at least for the time being) was the Securities and Exchange Commission (SEC) Feb. 24 adoption of a new "alternative uptick rule."
That last allegation was particularly troublesome to market regulators, especially after stock-market researcher Birinyi Associates traced a sudden sharp rise in stock volatility back to mid-July of 2007, a point coinciding with the repeal of the so-called "uptick rule." The uptick rule was a Depression-era regulation that allowed the short sale of a stock only when the prior trade had resulted in an upward move in its price.
That concern over volatility led to a lot of official posturing as the government struggled to come up with solutions to prevent future market mayhem, the result of which (at least for the time being) was the Securities and Exchange Commission (SEC) Feb. 24 adoption of a new "alternative uptick rule."
Mortgage Markets Show Increased Stability, But Limited Opportunity
[Editor's Note: This analysis of the U.S. mortgage market is part of a two-story package that appears in today's issue of Money Morning. To read a related story on the outlook for adjustable-rate mortgages (ARMs), please click here.]
It doesn't have four letters, but "mortgage" has definitely been a dirty word in the financial world the past few years. That's especially true when the word "mortgage" is paired up with such other terms as "subprime," "delinquent," and "foreclosures."
Little wonder that mortgages - along with the derivative securities backed by them and the often-unseemly practices of the people pushing them - have gotten much of the blame for precipitating the economic meltdown from which the American economy is now struggling to recover.
There's still plenty of woe in the mortgage world. But in recent months there have also been some signs that the real-estate-financing markets are at least regaining some semblance of stability, with foundations being poured for a rebuilding phase that might not be too far down the road.
It doesn't have four letters, but "mortgage" has definitely been a dirty word in the financial world the past few years. That's especially true when the word "mortgage" is paired up with such other terms as "subprime," "delinquent," and "foreclosures."
Little wonder that mortgages - along with the derivative securities backed by them and the often-unseemly practices of the people pushing them - have gotten much of the blame for precipitating the economic meltdown from which the American economy is now struggling to recover.
There's still plenty of woe in the mortgage world. But in recent months there have also been some signs that the real-estate-financing markets are at least regaining some semblance of stability, with foundations being poured for a rebuilding phase that might not be too far down the road.
Epitaph For the ARM: Is the Adjustable-Rate Mortgage Finally Dead?
[Editor's Note: This analysis of the adjustable-rate-mortgage (ARM) market is part of a two-story package on the U.S. mortgage market. To read the package mainplay - "Mortgage Markets Show Increased Stability, But Limited Opportunity" - please click here.]
Is it the end of the line for the adjustable-rate mortgage (ARM)?
A close look at the interest-rate paradox involving credit cards and ARMs indicates that it may be time to start writing the epitaph for adjustable-rate home loans. Here's why.
The U.S. Federal Reserve's benchmark Federal Funds rate is at all-time lows - with a target rate near 0.00% - but credit-card interest rates linger at record highs. The all-in rate on some credit-card transactions approaches 30%.
Is it the end of the line for the adjustable-rate mortgage (ARM)?
A close look at the interest-rate paradox involving credit cards and ARMs indicates that it may be time to start writing the epitaph for adjustable-rate home loans. Here's why.
The U.S. Federal Reserve's benchmark Federal Funds rate is at all-time lows - with a target rate near 0.00% - but credit-card interest rates linger at record highs. The all-in rate on some credit-card transactions approaches 30%.
Freakish Winter Freezes Some Profit Plays, Heats Up Some Others
This article was supposed to be about investments that would allow you to profit from the typical cold-and-snowy weather that's part of the winter routine at this time of year.
But as everyone from Southern California to the Middle Atlantic East Coast states, and the Great Lakes to the Deep South, is painfully aware, this year's winter has been neither "routine" nor "typical" - not by a long shot.
Indeed, the so-called "snowpocalypse" of 2010 has been so fierce that pundits have already coined new terms to describe it. This run of winter bluster has actually nullified some of the usual "winter plays" - those that can be found almost every year - while at the same time creating other opportunities you might not ordinarily think of.
But as everyone from Southern California to the Middle Atlantic East Coast states, and the Great Lakes to the Deep South, is painfully aware, this year's winter has been neither "routine" nor "typical" - not by a long shot.
Indeed, the so-called "snowpocalypse" of 2010 has been so fierce that pundits have already coined new terms to describe it. This run of winter bluster has actually nullified some of the usual "winter plays" - those that can be found almost every year - while at the same time creating other opportunities you might not ordinarily think of.
Investing Strategies: How to Decode the New Option Symbols That Take Effect Today
If you're a veteran options trader, you'll find that a major change to the rules of the game takes effect today (Friday). Today was the deadline for quotation systems, order-entry platforms and other electronic programs around the globe to begin referring to option contracts by entirely new identifying symbols.
The old option symbols - simple four- or five-character letter codes that have been in use since the Chicago Board Options Exchange (CBOE) first started trading standardized listed options back in 1973 - are being replaced with new, more-definitive codes containing a combination of up to 22 letters and numbers.
The new symbols are designed to provide a complete description of each individual option - one that can be universally understood by everyone in the markets, and by the data-transmission computers and electronic quotation systems.
The old option symbols - simple four- or five-character letter codes that have been in use since the Chicago Board Options Exchange (CBOE) first started trading standardized listed options back in 1973 - are being replaced with new, more-definitive codes containing a combination of up to 22 letters and numbers.
The new symbols are designed to provide a complete description of each individual option - one that can be universally understood by everyone in the markets, and by the data-transmission computers and electronic quotation systems.
Investing Strategies: How to Decode the New Options Trading Symbols
It sounds like it should have been a government project - "clarifying" something by changing it from just four or five letters to a lengthy combination of up to 22 letters and numbers. That is what's about to happen with the trading symbols for "put" and "call" options listed on U.S. options exchanges.
But the "government" had nothing to do with it.
The idea for a new option-quotation format was actually put forth back in 2005 by securities industry insiders whose companies were struggling to find ways to deal with the rapidly growing number of optionable stocks, index options, short-dated "serial" options, long-term issues such as LEAPs - and the expanding strike-price ranges for all of them.
With the guidance of the Options Clearing Corporation (OCC), a group was organized and tasked with creating what was subsequently dubbed the Options Symbology Initiative (OSI) - a system to "overhaul the symbology used in representing listed option contracts in data transmissions between market constituents."
But the "government" had nothing to do with it.
The idea for a new option-quotation format was actually put forth back in 2005 by securities industry insiders whose companies were struggling to find ways to deal with the rapidly growing number of optionable stocks, index options, short-dated "serial" options, long-term issues such as LEAPs - and the expanding strike-price ranges for all of them.
With the guidance of the Options Clearing Corporation (OCC), a group was organized and tasked with creating what was subsequently dubbed the Options Symbology Initiative (OSI) - a system to "overhaul the symbology used in representing listed option contracts in data transmissions between market constituents."
The Seven Investment Risks to Avoid in 2010
Spurred by its best annual performance since 2003, U.S. stocks stampeded into the New Year, with the Dow Jones Industrial Average, the Nasdaq Composite Index and Standard & Poor's 500 Index posting gains of 1.49%, 1.73% and 1.60%, respectively. And while that's certainly a respectable beginning, investors shouldn't assume it signals that a bull market run its course for the full year.
Indeed, while Money Morning's outlook for 2010 is generally positive, there are at least seven major risks that could rein in the charging bull - or even release an angry bear into the trading arena. The top risks consist of:
Indeed, while Money Morning's outlook for 2010 is generally positive, there are at least seven major risks that could rein in the charging bull - or even release an angry bear into the trading arena. The top risks consist of:
Billionaires Turn to Beggars as Financial Crisis Torches the World's Fortunes
The holiday season is traditionally the time when society extends a helping hand to the less fortunate among us. But this December, thanks to the world's continuing economic unease, we've got a whole new class of "poor" people to worry about.
They're called billionaires - or, even more tragic, "ex-billionaires" - and, according to Forbes magazine, they've taken a bigger financial hit in the past 15 months or so than in any year since the magazine started tracking the fortunes of the world's richest people back in 1987.
In fact, the most recent Forbes survey found that the total number of billionaires around the globe plunged from a record 1,125 in early 2008 to just 793 in March 2009 - a net decline of 332, or 29.5%. Even worse, the total net worth of the world's recognized billionaires plunged 45.4%, from $4.4 trillion in 2008 to just $2.4 trillion this year (numbers are based on stock prices and other values assessed in mid-February). That translates to an average net worth of just $3 billion, down 23%, or $910 million, from 2008.
Hot Stocks: Is Markel Corp. a Berkshire Hathaway in the Making?
Ask any 10 U.S. investors to name the most-admired American financial figure and it’s a pretty good bet at least nine of them will answer Warren Buffett.
Thus, it should come as no surprise that other firms would want to emulate the business strategies of Buffett’s company, Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) – which is exactly how Markel Corp. (NYSE: MKL) is making its name on Wall Street.
Like Berkshire, Markel Corp. lists its primary business as insurance – but it’s no State Farm Insurance or Allstate Corp. (NYSE: ALL). Rather than selling auto or homeowners policies directly to consumers, Markel and its subsidiaries (listed below) sell specialty insurance products and programs in an assortment of niche markets.
Thus, it should come as no surprise that other firms would want to emulate the business strategies of Buffett’s company, Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) – which is exactly how Markel Corp. (NYSE: MKL) is making its name on Wall Street.
Like Berkshire, Markel Corp. lists its primary business as insurance – but it’s no State Farm Insurance or Allstate Corp. (NYSE: ALL). Rather than selling auto or homeowners policies directly to consumers, Markel and its subsidiaries (listed below) sell specialty insurance products and programs in an assortment of niche markets.
Six Ways to Boost the Resale Value of Your Home – Even in a Down Market
It’s no secret that the old real estate adage tells us that only three things determine the value of your home – location, location, location. But the reality is that there's plenty you can do with most any piece of property to get a higher selling price in almost any market. Some of the steps […]