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Jeff Stouffer

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  • Mortgage Lessons of the Past Are Quickly Forgotten in This ETF

    By Jeff Stouffer - May 16, 2013 | Tickers: AGNC, NLY, MORT, MFA

    The ability to forget and repeat mistakes is well recorded in the history of humanity. Back in the hey-days of mortgage originations, the idea of pooling individual mortgage obligations and restructuring the payment streams to fit investor appetites seemed like a great way for a bank to free up its balance sheet and create new mortgages. History reminds us that the demand to produce such mortgage pools led us down more »

  • With All the Weeds Pulled Out of the Mortgage Patch, This ETF May Bloom

    By Jeff Stouffer - May 16, 2013 | Tickers: MCY, ORI, RDN, KME, RYL

    Talk to any mortgage loan officer today and he/she will still think that he/she will be accused of being one of the bad guys that caused the triggering event of the financial industry's problems. Now that sweeping regulations and reform are well underway, the mortgage loan officer that still works in this field will no longer have the curved, waxed mustache and black cape.

    Home mortgages are more »

  • Significant Risks in Passive Chinese ETFs

    By Jeff Stouffer - May 15, 2013 | Tickers: CHL, SNP, CEO, PTR, CHXF

    Passive, index-tracking exchange-traded funds are in huge demand -- but are they always wise investments? The WisdomTree China Dividend Ex-Financials Fund (NASDAQ: CHXF) is an example of an index fund with a lot of unnecessary risk--the index it follows is based on investing in Chinese dividend-paying stocks. The year-to-date return is -5.08% and a dividend has yet to be established or paid (see the price chart below).

    Some of the more »

  • Constant Gravitational Attraction to Metals and Mining

    By Jeff Stouffer - May 14, 2013 | Tickers: AA, CLD, CMP, CNX, XME

    My ongoing search for investment strategies for my clients leads me to programs that absolutely do not work and may never, regardless of brand name and the people behind them. One such program is the SPDR S&P Metals & Mining ETF (NYSEMKT: XME). This exchange-traded fund, born on June 19, 2006, has posted a series of negative returns. The one-year return is -19.31%, the three-year return is -11.35 more »

  • An Easy Way to Handle Punishing Surprises in Telecommunication Stocks

    By Jeff Stouffer - May 10, 2013 | Tickers: AAPL, T, CTL, IYZ, S, VZ

    The telecommunications sector is filled with promise. With constant technological changes the general public's demands for these services continue to increase. On numerous and regular occasions, a company that operates in this sector makes an announcement that crushes the stock price in no time at all. Thus the general public's view toward this group is quite finicky.

    One way to maintain a solid exposure to this group without more »

  • Today’s Remake of Jed Clampett’s Success Story

    By Jeff Stouffer - May 9, 2013 | Tickers: BHI, HAL, IEZ

    Remember how each episode of The Beverly Hillbillies started? Sure enough, Jed aimed his shotgun, fired a shot, and oil came gushing through the ground. A more pragmatic result of this simple story is taking place in the oil-services sector. The iShares Dow Jones US Oil Equip. (NYSEMKT: IEZ) is an exchange-traded fund that holds 48 stocks of companies that compete in the oil-services group.

    It is the recent positive more »

  • Pop Goes the Sound of This Micro-Cap Portfolio

    By Jeff Stouffer - May 9, 2013 | Tickers: CSIQ, OSTK, PZI

    Some of the most spectacular stock returns can be found in the micro-cap space. Stocks that have a market capitalization of between $50 million and $250 million are considered to fall into this category. Recent market action in the PowerShares Zacks Micro Cap (NYSEMKT: PZI) ETF has been significant enough that three of the top four holdings have graduated to the next level. This ETF, which holds 400 stocks, was more »

  • It Appears That Consumer Discretionary Spending Continues

    By Jeff Stouffer - May 9, 2013 | Tickers: CMCSA, XLY, HD, MCD, DIS

    It seems out of character that an investment strategy based on consumer discretionary spending in today’s economy is not be a viable strategy. Going against this train of thought is the Consumer Discretionary SPDR (NYSEMKT: XLY). This exchange-traded fund, which started on Dec. 16, 1998, has posted a one-year return of 23.4%, a three-year return of 17.9%, and a five-year return of 12.7%. This performance can more »

  • Exciting Investment Ideas in "Stodgy” Industries

    By Jeff Stouffer - May 9, 2013 | Tickers: MET, KBWI, CB, TRV

    When turnaround trends take place in industries that have been considered boring or unappealing for extended periods of time, such events can be rather explosive. A good example of this is the PowerShares KBW Insurance Portfolio (NYSEMKT: KBWI)), an ETF that holds only insurance-company stocks. The inception date is Nov. 1, 2011 and the posted one-year return is approximately 28.9%.

    The release of the PowerShares KBW Insurance Portfolio appears more »

  • Reaching for Returns by Using Lower Priced REITs

    By Jeff Stouffer - May 8, 2013 | Tickers: ARR, DCT, IVZ, ROOF, NCT

    The explosive growth of exchange-traded funds has brought several sponsoring competitors to the marketplace. It is business as usual when new products are brought to market and all kinds of purveyors are seeking a foothold in the new frontier. There has never been, or will be, a shortage of product designers and marketers in the investment world. One such product family is the Index IQ group and one REIT based more »

  • A Flatlining ETF That Should Perform Better

    By Jeff Stouffer - May 8, 2013 | Tickers: DD, FCX, IYM, PX, DOW

    Investments that defy logic are more common than you'd think. Even during periods of modest growth of gross domestic product, indices and investment strategies based on basic materials would seem to benefit from improving economic conditions. The two one-year charts below display a disparity of this premise. The first chart is the one-year US GDP, and the other is a one-year chart of the iShares Dow Jones US Basic more »

  • No Sign of Negative Returns in this Real Estate ETF

    By Jeff Stouffer - May 8, 2013 | Tickers: AMT, HCP, IYR, PSA, SPG

    It is not too often when a real estate investment strategy under review has posted positive returns, for all measuring periods, since inception. This once-in-a-blue-moon program is the iShares Dow Jones US Real Estate Index Fund (NYSEMKT: IYR), a well-diversified ETF that was created on June 12, 2000, that holds 95 different REITs and pays a nice dividend. One attractive feature of the ETF is that only approximately 8.4 more »

  • Double-Digit Returns from the Biotechnology Strategy

    By Jeff Stouffer - May 7, 2013 | Tickers: NPSP, REGN, SNY, XBI, THRX, VRTX

    Investments in biotechnology by the average investor tend to deliver hit or miss returns over time. Since inception, the SPDR S&P Biotech ETF (NYSEMKT: XBI) has delivered double-digit returns. This ETF holds 53 stocks and is focused on this industry. Created on Jan. 31, 2006, the one-year return is 33.76%, the three-year return is 23.57%, and the five-year return is 13.27%. Only the one-month and three-month more »

  • A Tortoise-Like Dividend ETF That Delivers Hare-Like Returns

    By Jeff Stouffer - May 6, 2013 | Tickers: CVX, ETR, DVY

    An often over-looked investment theme is based on dividend income. Such strategies seem so boring in that they keep chugging along collecting dividends on a regular basis. There seems to be very little sex appeal to these strategies, especially when the media reports on day-to-day activities of companies such as Apple or Google. The media comments of such companies take all the stage when earnings or other high-impact news developments more »

  • Trains, Planes, and Automobiles, All Driving this ETF to New Heights.

    By Jeff Stouffer - May 6, 2013 | Tickers: CAR, HTZ, LUV, XTN, LCC

    A key component of The Dow Theory is that transportation is an essential ingredient of an improving economy. Without the profitability in transportation companies to move goods to the consumer, then an upturn in manufacturing output is not confirmed

    The SPDR® S&P® Transportation ETF (NYSEMKT: XTN) is an exchange-traded fund that holds 40 stocks of transportation companies. This ETF was brought to the market on January 26, 2011 and more »

  • Healthcare Helps Your Portfolio’s Wellbeing

    By Jeff Stouffer - May 5, 2013 | Tickers: GILD, IYH, JNJ, MRK, PFE

    An allocation to Healthcare investment strategies can be good for the wellbeing of your portfolio. Looking into the iShares Dow Jones US Healthcare Sector Index Fund (NYSEMKT: IYH), an exchange-traded fund, I find a lot of positive results, even with the anchor effect associated with 2008. The one-year return is 30.7%, the three-year return is 17.66% and the five-year return is 10.99%. This ETF was brought to more »

  • One Method to Get Paid on the Daily Cost of Living

    By Jeff Stouffer - May 5, 2013 | Tickers: D, DUK, IDU, NEE, SO

    I recall the days when I was a rookie at Merrill Lynch. In the 1990s one of the oldest pitches a broker can make is selling shares in the local power company. Comments such as “how would you like to get a dividend on your monthly electric bill?” would be taught as a way to open an account. The problem with that was the confinement to the local market. The more »

  • The Fallacy of Benchmark Investing

    By Jeff Stouffer - May 2, 2013 | Tickers: XOM, IXC, RDS-A

    The endless argument between active-versus-passive investment management styles appears to be one with no end in sight. Exchange-traded funds, for all of their great features and benefits, fall well within the passive-management camp.

    ETFs are designed to track an index by holding all the underlying components. This creates another rhetorical question: “If the benchmark delivers mediocre returns, does outperforming this benchmark indicate a sign of superior investment management?”

    An example more »

  • Rising From the Ashes: A Global Financial Sector ETF on a Roll

    By Jeff Stouffer - April 30, 2013 | Tickers: BRK-A, HBC, IXG, JPM, WFC

    The constant bad news about the U S economy tends to obscure some positive investment performers. After all investment performance is not directly tied to economic performance.

    The iShares S&P Global Financial Sector Index Fund (NYSEMKT: IXG) is an exchange-traded fund that holds 221 financial stocks, and according to the chart below, allocates the portfolio among countries throughout the world.

    A day does not go by when we hear more »

  • Over 100% Asset Growth in This Minimum-Volatility ETF

    By Jeff Stouffer - April 30, 2013 | Tickers: AMGN, USMV, VZ

    When a new strategy hits the Street and it gains assets at a significant rate over a very short period of time, the ability of this new program to absorb the new money is quickly tested.

    A new exchange-traded fund named the iShares MSCI USA Minimum Volatility Index Fund (NYSEMKT: USMV) is an example of such a program. This ETF was brought to the marketplace on Oct. 18, 2011. In more »

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