Until then the stock market is apparently going to go up every single day, LOL.
IndexIQ has now joined the pantheon of very innovative ETF providers along with EG Shares, GlobalX and Market Vectors. There is plenty of utility in funds from the big boys too but the smaller companies don't have as deep pockets, are taking a lot of entrepreneurial risk and bringing some great products.
The latest fund from IndexIQ is the South Korea Small Cap ETF (SKOR). I have to say I've never been a fan of South Korea as an investment destination, there are consumer debt problems (probably not as bad as in the US) and companies like Samsung and LG rely in large part on discretionary spending of the US consumer. However it is possible that similar to Japan the story with small caps could be different than the large caps (in Japan DJP policy is supposed to favor domestic companies that are mostly small cap over the big exporters), this is something to learn about. SKOR is 19% financials which could be an issue.Coming next from IndexIQ is the Taiwan Small Cap ETF (TWON). TWON is 30%, tech which is a lot less than the iShares Taiwan ETF (EWT), 27% industrials and 18% materials. I think the fund is due to come April 28 but whether that is correct or not it is not out yet.
According to IndexUniverse IndexIQ has also filed for small cap ETFs for Thailand, Malaysia, Hong Kong, Singapore and Indonesia. Realistically no one is going to own all these funds but it would be very reasonable to learn a country and draw a conclusion about preferring small over large in one or two of them.
IndexIQ has also filed for a small cap global agribusiness and several other small cap resource industry funds. As I repeat often, more innovation like this allows non-stock pickers to capture very narrow effects which I think is a good thing.
Speaking of sectors iShares has a page on its website titled Explore Sectors. iShares has "over 50" sectors funds. This sort of study is time well spent.
8 comments:
Although data released yesterday through RealtyTrac, a prominent and authoritative online real estate service for practitioners, indicates a worsening of the foreclosure situation (and re-forclosures, those who received a mortgage concession and then, again, failed to pay their obligation), it seems silly to use that as a rationale for a slight uptick in retail sales.
A luxury car, a nice cruise and steaks at Mortons, perhaps. But not underwear at Wal-Mart or a shirt at Target.
The notion that folks defaulting on mortgages may be consuming is discussed at http://tinyurl.com/y6afvrl but briefly, as Mark Zandi of Moodys points out, approximately six million homeowners are not making regular mortgage payments which would free up something like $8 billion each month. If you assume the cash is being spent rather than saved -- not an idiotic assumption given the falling savings rate, the un- and under-employment rates, stagnant wages, etc -- then that could boost consumer spending by nearly one percent.
Sure it's anecdotal evidence but one percent at the margins can provide some juice, encourage manufacturers and other goodies. Add the carry trade and quantitative easing to that and you've got a properly toasted up-wave.
A sustainable move, underpinned by a recovering economy? Ah, well now, the magic 8-ball says [shake, shake] ..."perhaps."
RW, you say that assuming the $8 billion each month is being spent rather than saved is not an idiotic assumption given the factors you describe, but isn't there a more fundamental assumption: Given the economic factors, the homeowners who are not making their payments have the money and are choosing not to pay?
Sam, I think many have the money and are electing to pay for other things, yes, which would make their default strategic rather than obligatory; the article I linked to has more details.
RW --
You make an excellent point.
Strategic nonpayment of mortgages is a thriving tactic, at least in my region.
Not fulfilling obligations runs counter to my lifestyle, but I guess that gaming the financial system is a worthy endeavor for many.
T
I can second T 's observation. I was listening to a well employeed engineer($100K+/year) explain that he was considering bankruptcy and defaulting due to a $4500/ month note on a house worth less than half it's pre collapse value. This is an economic decision, not unemployment. He just returned from a cruise vacation.
My nephew has already filed, for just these reasons. I wonder about one's moral obligation in a situation like this. Is the right thing to stay upside down, maybe forever, because of a financial failure that was not of one's own making?
Ah, the welfare/baleout/entitlement era; such a country we have today! The only problem with socialism is that, pretty soon, you run out of other people's money (paraphrase, Margaret Thatcher). Bring back 20% down and a mortgage no greater than 2 1/2 times one's annual income and there will never be another housing crash (like, there never was until those things were done away with).
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