Posts filed under “Index/ETFs”

QQQE: Equal Weight Nasdaq

Traditional QQQ Weighting
click for larger graphic

Source: Nasdaq

 

Long overdue and excellent idea:

Part of the problem with the Nasdaq QQQ’s has bee on the oversize weighting of a few giant market names in it. Certainly Apple (AAPL), but also Microsoft (MSFT), Google (GOOG) and others. Note that chart above dates from 12/31/2012 — after Apple began its slide, and yt still, it was almost 1/6th of the Qs.

The new QQQE is an equal weight set of Nasdaq holdings, each contributing 1% to the overall mix. This reduced  Information Technology from 63% to 49%, and raises just about all other sectors in the index.

I’d love to see a chart comparing the cap weighted and equal weighted indices.

 

 

UPDATE: February 9 2013 5:39pm

Tom Brakke of The Research Puzzle sends along this chart

Category: Index/ETFs, Technology

History Of The S&P 500′s Biggest Components

More looks from various decades of the the top 10 S&P500 caps.

 

Click for Complete History

More charts after the jump

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Category: Digital Media, Index/ETFs, Valuation

U.S. Equity Sector ETF Weekly Performance

  The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price moves. The RSI moves between zero and 100 and is considered overbought with a reading above 70 and oversold when below 30.  Note the RSI can sustain an overbought (oversold) reading in a strong up (down) trend….Read More

Category: Index/ETFs, Think Tank

Simplifying Your Investment Strategy

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My Sunday Washington Post Business Section column is out. This morning, we look at the advantages of avoiding complexity in your investment process. The print version had the simple headline Simplifying Your Investment Strategy while the online version used the hedder Keep it simple, avoid the pitfalls.

There are know advantages to certain complex investing strategies, but these complexities become harmful disadvantages most of the times, as Humans are emotionally unable to follow them.

By creating an investment plan that is simple and easy to follow, you make it more likely that you will ultimately succeed and reach your goals. Hence, all of the familiar themes get mentioned in my focus on simplicity: ETFs, lower costs, diversification, rebalancing, dollar cost averaging, etc.

Here’s an excerpt from the column:

We must recognize our own behavioral errors. To be blunt, you are not likely to become a cognitive Zen master anytime soon. But a little enlightenment could keep you from making some common investing errors.

Knowing these limitations, we can design an investment plan to circumvent the behavioral pitfalls. And a good step is to simplify. Toward that end, keep these 10 ideas in mind when approaching your portfolio”

The 10 ideas are not groundbreaking — but they are often overlooked.

Less can be more.


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Source:
Keep it simple, avoid the pitfalls
Barry Ritholtz
Washington Post, January 25 2013  
http://www.washingtonpost.com/business/keep-it-simple-avoid-the-pitfalls/2013/01/24/210063fc-65a3-11e2-9e1b-07db1d2ccd5b_story.html

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Category: Apprenticed Investor, Index/ETFs, Investing, Rules

5 Biggest Market Caps As % of S&P500

Why cheap Apple shares can’t gain any traction click for larger graphic Source: Barron’s     The chart above shows the 5 largest market cap firms as a percentage of the S&P500 index. Barron’s points out that when companies hit 5% of the S&P500, it often acts as a cap on further valuation growth. The…Read More

Category: Index/ETFs, Valuation

Wacky Email of the Month: Obama to Rejigger DJIA

Since its the Friday before a 3 day weekend, let me share with you the goofiest email I have received this month, from somewhere in the Netherlands. The full email (which is all over the Internet in its original language) is reproduced below, immediately following my response.   My response: That is hilarious. I presume…Read More

Category: Index/ETFs, Really, really bad calls

A Breakdown Of ETF Assets & Flows

MarketWatch – Investors win as ETF wars heat up The ETF wars are once again heating up to the benefit of everyday investors. BlackRock, the leader and pioneer of ETFs through its famous iShares products, is feeling the pressure of increased competition in the ETF space and is likely to lower their pricing. Comment Recently we pointed…Read More

Category: Index/ETFs, Investing

Top 10 Investor Errors: Mutual Fund vs ETFs

Welcome to post number six in our continuing series of most common investor errors.

Today, we are going to look at something that relates back to several of our earlier bullet points on fees and active management relative to investor structures.

Mutual Fund vs ETFs: The average mutual fund charges far more than the average ETF does. Whenever possible, I recommend substituting a low cost ETF over the more expensive Mutual fund.

The fund industry seems to have figured this out. Some have put out ultra-low cost mutual funds that typically mimic broad indexes. Others have ETF-ified their existing mutual funds, converting them into Exchange Traded Funds. Over the next decade, it would not surprise me to see nearly half of the existing mutual fund offerings morph into ETFs.

The bias against mutuals over ETFs is in the many ways that mutual funds can tag you with hidden costs, taxes, 12b-1 fees, and expenses. With ETFs, you pretty much get what you pay for.

Do note however: Even within the ETF universe, there are a wide range of internal fees. These expenses come off of the top of your investment performance, so it pays to watch them closely.

Reducing your costs is a surefire way to improve long term results. Consider what ETFs you can substitute instead of mutual funds.

 

 

Previously:
Top 10 Investor Errors
1. Excess Fees
2. Reaching for Yield
3. You Are Your Own Worst Enemy
4. Asset Allocation vs Stock Picking
5. Passive vs Active Management

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Category: Apprenticed Investor, Index/ETFs, Investing

Case-Shiller Home Price Indices (November 2011)

Through November 2011, the S&P/Case-Shiller1 Home Price Indices declined 1.3`% for both the 10- and 20-City Composites in November over October. For a second consecutive month, 19 of the 20 cities covered by the indices also saw home prices decrease.

For year over year data, the 10- and 20-City Composites posted losses of -3.6% and -3.7% versus November 2010. These are worse than the -3.2% and -3.4% respective rates reported for October.

Click to enlarge:

More charts after the jump

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Category: Index/ETFs, Real Estate

Index Funds Don’t Pick Themselves!

I was sitting on Friday’s hilarious Dilbert, expecting to post it Saturday, but so many friends and colleagues mailed it in to me, I was compelled to post it today: >

Category: Index/ETFs, Investing