Market Flavor Blogtag:www.marketflavor.com,2008:/blog//52008-03-16T22:59:16ZMovable Type 3.34Bear Market Investment Strategy - The Bear Stearns Bailouttag:www.marketflavor.com,2008:/blog//5.1852008-03-16T22:35:26Z2008-03-16T22:59:16ZDo you have the proper investment strategy as the downside risks in the stock market get worse? Trying to predict... Click here to check out the Market Flavor portfolio and read more about our economic outlook.
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Stock Market Performance in 2007 - The S&P 500 vs. The Market Flavor Portfoliotag:www.marketflavor.com,2008:/blog//5.1782008-01-07T05:57:33Z2008-01-07T06:11:49ZWith a disappointing finish to 2007, the S&P 500 ended the year with a 3.5% gain. We are pleased to... The Market Flavor Portfolio was created on March 1st 2007 and over that comparable time period the S&P 500 performance was only 4.65%. Without adding a lot of risk, the Market Flavor Portfolio outperformed the S&P 500 by an incredible 16.48 percentage points for the comparable time period. That equates to a staggering 250% increase over the performance of the S&P 500! We are very pleased to have provided this level of performance to our members and we are diligently working to try and repeat this great performance in 2008. With Market Flavor you can count on a quality stock portfolio without drastically increasing your portfolio risk.
If you are not yet a member be sure to sign up for our free complimentary trial. Our stock advice is easy to follow and simple to use.
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Best Investments for 2008 Q1tag:www.marketflavor.com,2007:/blog//5.1772007-12-31T23:53:21Z2008-01-01T00:12:32ZWith a bad ending for stocks in 2007 and a weak economic outlook for 2008, we have been advising our...
high yield online savings account. Until we see an improvement in the US economy we feel it’s too risky to be fully invested in the stock market.
The best investment for 2008 is to park your cash in a high yield online savings account, at least for the first quarter of 2008. With all the currently stock market risk we think you have a much better chance of loosing money in the stock market during the first quarter of 2008 then making money. With odds like this it’s a much better idea to park money somewhere with a guaranteed 5% return.
Be sure to see our full list of investment recommendations in the Market Flavor Portfolio!
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Kiva Org - Supporting Poverty Reduction through Economic Growthtag:www.marketflavor.com,2007:/blog//5.1752007-12-11T04:23:27Z2007-12-11T05:31:21ZWe are starting a new blog category to highlight different online economic charities that support poverty reduction through economic growth....
For out first economic growth charity we are featuring is Kiva.
Kiva takes the proven process of global micro lending and allows people from around the globe to lend small amounts of money through the internet. You can view different business ventures through their website and pick the micro loans that you find most attractive. Kiva is the perfect example of how capitalism and technology can help reduce global poverty. Please check out Kiva's website and give a small gift that will in turn keep on giving by supporting expanding economic growth.
Be sure to subscribe to our blog to get updated when we add new notable charities to our list. You'll also receive valuable investment advice from out elite online investment advisor.
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Index ETFs vs. Mutual Fundstag:www.marketflavor.com,2007:/blog//5.1742007-12-09T07:16:44Z2007-12-09T16:47:09ZAccording to Investopedia, about 80% of mutual funds fail to outperform the S&P 500. So why take an 80% risk...
Investopedia, about 80% of mutual funds fail to outperform the S&P 500. So why take an 80% risk of underperforming the stock market with mutual funds when there are index ETFs, like the SPY, that track the S&P 500? The choice seems pretty clear! An S&P 500 ETF like the SPY is very easy to invest in and should outperform most mutual funds. Please note that index ETF's do have a small expense fee which will cause an index ETF like the SPY to slightly underperform the S&P 500. But the trading costs associated with creating the S&P 500 in your own portfolio would be far greater then the SPY's expense ratio. With this small fee an S&P 500 ETF should still outperform most mutual funds due to the already high percentage of mutual funds that can't beat the S&P 500.
Not only do index ETFs outperform most mutual funds, but they also have lower expenses ratios. Through our research, we found that on average mutual fund expense ratios are about 3 times more then the average Index ETF expense ratio. CNN Money claims that the average mutual fund expense is 1.35% and the average ETF expense is 0.41%. If index ETF performance alone isn't enough to convince you, hopefully the lower expense ratio of ETFs will. Also remember that expenses are usually not included in a funds reported performance.
Although index ETFs, like the SPY, perform much better then most mutual funds, the Market Flavor sample stock portfolio has greatly outperformed the S&P 500. We utilize quality stocks with good valuations and high growth potential to create a winning stock portfolio. Along with those top notch stocks we use different ETFs to give us access to strong industries and foreign countries. Give our simple online investment service a try!
Read more about the SPY index ETF at Yahoo Finance.
Below we have constructed a list of ETF's that are commonly used to invest in different indexes, industries, countries, bonds, and commodities.
Most Popular ETFs list
Nasdaq 100 ETF - QQQQ
Dow Jones ETF - DIA
Short Term Treasury Bond ETF - SHY
Short Term Bond ETF - BSV
Aggregate Bond ETF - AGG, LAG
Intermediate Term Bond ETF - BIV
Long Term Bond ETF - BLV
Energy ETF -XLE, VDE
Crude Oil ETF - USO
Gold ETF - GLD, IAU
China ETF - FXI
Europe ETF - VGK
Emerging Markets ETF - EEM, VWO
Latin America 40 ETF - ILF
India Fund - IIF
Canada ETF - EWC
Financial ETF - XLF, VFH
Russle 2000 Growth ETF - IWO
Natural Gas ETF - UNG
Brazil ETF - EWZ
REIT ETF - VNQ
Here is an article by fool.com that goes into more detail about how ETFs and Mutual Funds work. ]]>
Stock Portfolio Performance in Novembertag:www.marketflavor.com,2007:/blog//5.1732007-12-03T15:02:24Z2007-12-03T15:19:47ZWe are pleased to announce that the Market Flavor online stock portfolio has had another great month, outperforming the S&P...Performance in November
Market Flavor
-1.11%
S&P 500
-2.61%
Read more about our online portfolio service here, or sign up now for a complimentary free trial and see how great our investment advice really is!
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Where to Invest in 2008 for the First Quartertag:www.marketflavor.com,2007:/blog//5.1702007-11-27T06:52:16Z2007-11-27T07:13:44ZWith our current cautious stock market outlook, we have a couple investment recommendations for 2008 to take you into the... Right now we recommend the safe investments of Bonds and High Yield Online Savings Accounts. Both are great conservative investments that will help your portfolio until we see a more stable US economy. With falling interest rates, bond prices have been climbing and should continue that growth trend through the first quarter of 2008. Even thought bonds look nice, we have been recommending that our members put extra money in the highest yield online savings accounts. Here are some of our recommendations for the best online savings accounts.
If you want to invest in stocks, stick with inexpensive stocks that have a lot of foreign exposure. By inexpensive we mean a stock that is trading at a low PE ratio compared to its PE Chart. You can read more about PE ratios and PE charts here.
Last, we recommend lowering the overall volatility of your stock portfolio by adding portfolio protection or by cutting back on risky investments. For easy portfolio protection we recommend an Ultra Short ETF. Read more about using Ultra Short ETF's for portfolio protection.
For strong portfolio advice during this stock market correction, try our complimentary free trial. We provide a strong sample stock portfolio that has preformed very well through this stock market downturn.
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How to Invest in the US Currency Declinetag:www.marketflavor.com,2007:/blog//5.1692007-11-23T14:41:15Z2007-11-29T08:15:31ZWhen investing in the stock market, it’s always important to consider the current economic conditions. Recently we have been experiencing... This trend should hold up for a while but watch for the eventual shift to an appreciating currency. When the US dollar starts appreciating, or even before it happens, stock investments should be shifted to stocks that primarily do business in the United States or that specialize in importing goods from foreign countries.
We do provide free stock picks on this blog, but none of the free stock picks are weak US currency plays.
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Model Stock Portfoliotag:www.marketflavor.com,2007:/blog//5.1652007-11-13T03:10:46Z2007-12-01T20:03:13ZThe Market Flavor model stock portfolio is easy to follow and has proven successful by outperforming the S&P 500. With...
Success
This model investment portfolio has been extremely successful as shown in this chart.
Simplicity
The Market Flavor model stock portfolio is easy to follow with our portfolio guide on which stocks to invest in and how much to invest in each stock. You will also be instantly notified via email whenever a change is made to the portfolio.
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Recession 2007 - Wait to Invest until Early 2008 or Latertag:www.marketflavor.com,2007:/blog//5.1622007-11-09T18:55:19Z2007-11-21T07:26:01ZFor the end of 2007 we believe that we are on the verge of a small stock market recession. Corporate... The advice we have been giving our members is to hold back on investing new money in the stock market and to trim back some current stock investments. Why risk your hard earned money with an economy that doesn’t look good? The probability of losing money in stocks is higher during a weak economy like we have right now. Once the US economy gets stronger the possibility of making money in the stock market should be much higher. Sign up for a complimentary free trial of our online investment advice service.
We recommend holding more cash then normal and taking advantage of the great rates that an online savings account offers. An online savings account doesn’t tie up your money and it also gives you a nice rate of return. See out list of great online savings accounts.
There is also the option of recession protection by using an ultra short ETF or by buying stock put options. We have not been recommending this to our members but it could be a great option if you are concerned about a larger stock market recession. Read some of our posts on portfolio protection.
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A List of Great High Yield Online Savings Accountstag:www.marketflavor.com,2007:/blog//5.1592007-10-21T18:13:08Z2007-11-21T07:40:07ZHigh Yield online savings accounts are an easy and convenient way to invest extra cash without tying it up in...
4.75% Capital One - No minimum balance
Our experience is that it’s very easy to transfer money between a brokerage account and an online savings account or to pull money out through an ATM or by writing checks.
Please keep in mind that these interest rates are subject to change and are usually not locked in like a CD rate or Bond rate.
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Stock Market Investing Tipstag:www.marketflavor.com,2007:/blog//5.1572007-10-19T00:53:03Z2007-11-21T07:43:44ZInvesting in stocks can be a simple process if your know what to look for. First know where we are...
First know where we are in the economic cycle.
This can determine how much of your portfolio you should have invested in stocks and also if you should be buying stocks or selling stocks. Here are some articles on the economic cycle. When the economy doesn’t look so good, it’s smart to decrease your exposure to the stock market and keep more of your portfolio in cash then normal.
Also consider the P/E ratio of the company. A P/E ratio under 20 is best but the P/E ratios of companies very by industry. That’s why it’s good to examine the P/E chart of a company.
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Rising Crude Prices and the Effects on Gas Prices and the Economytag:www.marketflavor.com,2007:/blog//5.1562007-10-18T16:46:12Z2007-11-21T07:46:04ZAs many of you have probably noticed, crude is on it's way up again and looks like it could break... But what does this mean for the consumer and the economy? One argument is that it's good for the economy because it shows economic expansion. While thats true it also puts a big cramp on the the profitability of companies that depend on this commodity. Higher gas prices are bad for the consumer, especially with the current problems in the housing market. With this causing a problem for the consumer it appears it would also be a problem for the economy.
One area we continue to like is technology. The higher price of gasoline could be a nice boost to internet traffic. As people travel less they will most likely spend more time searching on the internet. Great news for Google Inc. (GOOG)
Is it good for the oil companies? Probably for companies that drill for oil like GlobalSantaFe Corporation (GSF). But consumers might start demanding less which could also hurt them after a while.
Crude is becoming much more expensive to pull out of the ground. Companies that can find crude more efficiently should be in high demand. Schlumberger Limited (SLB) is a great example of a company like this, even thought it's a little expensive right now. Please note that SLB is an American Depositary Receipt (adr) stock.
In the long run crude and gas prices will rise with inflation and possibly faster do to the difficulty of pulling crude out of the ground. We have been fairly resilient to these increases in the past so we should also be alright this time. Crude prices also seem to be unjustified at these levels for an extended period of time. It seems as though these prices are driven by fears which hopefully will soon be reduced.
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Hedging with Put Options, Defining an Options Strategy for Portfolio Protectiontag:www.marketflavor.com,2007:/blog//5.1542007-10-11T03:00:00Z2007-11-21T07:49:24ZIn our first post on hedging we talked about using an ultra short ETF (Exchange Traded Fund) as a beginner...
first post on hedging we talked about using an ultra short ETF (Exchange Traded Fund) as a beginner hedging strategy. Put options can be used as a more advanced hedging strategy to protect your stock portfolio from a stock market crash or econmic recession. They can also be called a protective put if you own the underlying stock or ETF.
Buying a put means that you are paying a premium (price of the option) for the option to sell a specific stock or ETF at a strike price (specified price you can sell at). Option contracts have an expiration date which is the third Friday of the month specified in the options contract, or Thursday if Friday is a holiday. If the price of the underlying stock or ETF drops below the strike price before the expiration date, you can exercise your put option contracts. Exercising put options will sell 100 shares per option at the strike price. If you don't own the stock or ETF and you exercise your put options, your broker should automatically purchase the stock or ETF at market price and sell it at the strike price. If you don't execute your put options and they expire "in the money" (the strike price is above the market price), your broker should automatically settle the options for cash. To make money with a put, the market price of the stock or ETF has to fall below the strike price minus the premium you paid.
You can also sell options you own before the expiration date. Selling put options that you own is a great way to recover money when the underlying stock or ETF is increasing in price. An option contract represents 100 shares, so 5 put options gives you the option to sell 500 shares at the strike price before the expiration date. Options are quoted at the price per one share even though they are sold in lots of 100. An option that is quoting $1.50 would cost you $150 for one option. Options can often expire worthless which means there is a strong possibility you'll lose the money you spent to purchase the put options.
For portfolio protection we recommend purchasing a put on an index ETF. The SPY is a great ETF for the S&P 500 and the QQQQ for the Nasdaq 100. Buying a put option for the SPY or QQQQ helps protect you against a crash in the S&P 500 or Nasdaq 100 respectively.
Advantages of using Puts for a Hedge Less expensive then an ultra short ETF for similar protection More protection in the case of a market crash or recession Disadvantages of using Puts for a Hedge Time frame - ETF's don't expire Very risky - easy to lose all the money you invest in the put
Make sure you understand how options work before you hedge with puts. There are a lot of advanced concepts involved with options and it’s very important to understand options extremely well before you use them. If you are unsure about using options please use the ultra short ETF’s we mentioned in our previous post on protecting your portfolio. Ultra short ETF's are much easier to use because they are usually less volatile and don't have an expiration date.
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Our Free Stock Picks Performance, Some of our Best Picks!tag:www.marketflavor.com,2007:/blog//5.1522007-10-05T15:00:00Z2007-12-01T20:06:10ZIt’s time to take a look at the performance of the free stock picks that we’ve recommended on this blog....
updates through your RSS reader or by email so you know when we decide to sell these stocks or when add new free stock picks.
For the full Market Flavor portfolio click here!
Company
Ticker
Date Recommended
Purchase Price
Current Price 10/4/07
Performance
GameStop Corp.
GME
April 5th 2007
$33.32
$54.63
63.96%
Google Inc.
GOOG
May 4th 2007
$471.12
$579.03
22.90%
AT&T Inc.
T
April 2nd 2007
$38.76
$41.99
8.33%
Current prices are the closing price from 10/4/07 taken from Yahoo Finance.
Purchase prices are the historical adjusted close from Yahoo’s historical prices for the day the stock pick was posted.
Kiva takes the proven process of global micro lending and allows people from around the globe to lend small amounts of money through the internet. You can view different business ventures through their website and pick the micro loans that you find most attractive. Kiva is the perfect example of how capitalism and technology can help reduce global poverty. Please check out Kiva's website and give a small gift that will in turn keep on giving by supporting expanding economic growth.