investing

Feb 20 2018

Charting Bitcoin with FastTrack

Bitcoin graphic fasttrack

Bitcoin is back on the front page, breaking above above the $10k mark again last week. While its a speculative asset class and typically not something a FastTracker would devote much capital, we have been getting a good number of calls about Bitcoin, Blockchain, and related tech.

What do we think, worth a gamble?

He’re a quick list below of most popular/ asked about ETFs, Funds, and stocks. Look out for the bitcoin family coming soon.

Bitcoin/ Cryptocurrency/ Blockchain
GBTC – Bitcoin Investment Trust
ARKW – ARK Web x.0 ETF
ARKK – ARK Innovation ETF
BLOK – Amplify Transformational Data S ETF
BLCN – Reality Shares ETF Nasdaq NextGen E
KOIN – Innovation Shares NextGen Protocol ETF
LEGR – First Trust Indxx Invtv Tnsctn&Prcs ETF
KOIN – Innovation Shares NextGen Protocol ETF

Stocks
LBCC – Long Blockchain Corp
OSTK – Overstock
RIOT – Riot Blockchain
KODK – Eastman Kodak Co
MGI – MoneyGram International
NVDA – Nvidia

Feb 12 2018

How are low volatility ETFs holding up?

Over the past 5+ years, a variety of low volatility equity ETFs have launched with rapid growth. In light of the recent market volatility, how are the funds holding up? The top three are listed below and have a combined AUM of $24 billion:

SPHD – PowerShares ETF S&P 500 High Div Low Vol
SPLV – PowerShares ETF S&P 500 Low Volatility
USVM – iShares ETF MSCI USA Minimum Volatility

The FT Cloud SpreadSheet below highlights that the dividend adjusted stand deviations are in fact lower than SPY. So, the funds are producing the described lower volatility.

But what do we think about recent max drawdown numbers and the trailing 12 month returns? The picture below highlights the trailing 12 months total returns and recent draw down. While the ETFs are producing only 80-90% of SPY’s monthly volatility, they’re producing 90%+ of the drawdowns and a mere 20-80% of the returns.

Over the longer term (3 year, 5 year, and common start date), the ETFs are showing consistent lower SD while maintaining comparable annualized returns. See the three year, 5 year, and common start date views below.

Are these worth holding in your portfolio? We’ve love to hear your thoughts.

One Year Total Return (Feb 2017 – Feb 2018)

Sep 30 2015

Sieve Practical Example

In this post, I’ll walk through a typical use case of a fund sieve.

Investors Question: “I have a Fidelity retirement account. Where do I start?”

For this really simple example, we’re going to load all the funds in the Fidelity family. Then remove all funds that are not in the Giant family. Then we’ll remove all funds that have a front end load.

First, sign in to FT Cloud, open the spreadsheet tab (labeled “FT Cloud”), and click the “Load Family button in the upper right.
Next, we’re going to load the Fidelity family (Funds>>Company>>All>>Manage Large Number of Funds >> Fidelity)
This next step is the important part. The Fidelity family has 913 funds. We want to pare this down to a more manageable, actually invest-able list. To start, we’re going to press the “and” button with the “FundSize-Giant” selected. This will keep only the Fidelity funds that overlap with the Giant funds family (ie… remove all tiny funds, super specific funds, etc).
Next, we’ll whittle a little more and remove all funds in the “Loads-Front” family by pressing the “Remove-” button with “Loads-Front” selected.
Press the load button in the lower right to load the final 197 funds.

So, to summarize. We used the sieve to remove a variety of “unwanted” funds. We started with the 913 Fidelity family, then we worked our way down to the 197 funds that make the most sense for the fund scan/sieve.

Jun 26 2014

Translating GDP Declines into Investment Advice

All over the web we see economic indicators reaching new highs and lows, but investors often confuse economic information with investment information. There is a major disconnect between the economy and the stock market and its easy to see with FastTrack charts.

Ignorance has no bounds . . . the story in 5-years will be the same with the economy up or down

Check out the FastTrack charts below and see that despite the negative economic news, the investment environment over the last 5-years far rosier than the numbers suggest.

In this post we’ll use an article in today’s WSJ as a baseline “economic report” and break it down sector by sector. June 25, 2014 article for THE Wall Street Journal by Jonathan House.

Health Care

Looking at healthcare, the article notes “…consumer spending growth was lowered to 1% from 3.1% previously, largely because health-care spending was weaker than previously estimated.”

The green line is VGHCX, the Vanguard Health Fund and the red line is the S&P 500. “Weaker healthcare spending” surely didn’t equate to lower health care returns. VGHCX posted a 8.85% return in the first quarter of 2014. We saw a pull back after the first quarter GDP figures were released, but the March drop didn’t come close to wiping out the overall first quarter gains.

For the last 25-years while the economy has been on a roller coaster, VGHCX has risen even faster than the broad US Market (SPY S&P-500 exchange traded fund is the red line in the chart above), and the ride is not over.

Construction

From the article, “We see a 6.5% fall in housing starts and a 4.2% fall in spending.” This is in tune with FSHOX, the Fidelity Select Construction and Housing fund (shown in green). FSHOX foundered in the second quarter… but more importantly, why worry about it when there are so many other bright segments of the economy (like Health above).

Commerce

“Commerce had previously estimated output fell by 1% in the first quarter…”
“Exports also declined…“
“Economists surveyed predicted Wednesday’s report would revise GDP growth down to a 2% decline.”
“Six month growth is below the 2% average since 2009 and below the U.S. economy’s longer-term growth rate of over 3%.”

“It does not sound like the economy has reached escape velocity no matter how you try to spin it,” said Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi. “It’s going to take some big numbers the rest of 2014 for the economy to hit 2% growth.”

Reading just the article, it sounds like everything has been crummy since 2009. Yet, this is a period in which the red SPY (broad market) has risen 24% annually. I am not sure how to measure the cited “escape velocity”, but this looks good to me..

The article mentions 3% growth so we put in a 3% green line(annualized return). What is clear is that GDP growth has little to do with the ability of US companies to change, belt-tighten, and grow profits despite the economy. If you had money in a mayonnaise jar buried in the backyard, you missed one of the greatest rallies in history.

Corporate Profits

The article cites “five years into the recovery . . . Corporate profits after tax, without inventory valuation and capital consumption adjustments, rose [a paltry] 0.1%

In 2009 (upper chart), the 500 biggest companies in the US held by the SPY fund paid out 2.44% in dividends (a share of the profits). This was at the pit of the recession discussed in the article. Note in 2013-2014, these same companies paid out 2.30% in dividends, of course, this is misleading. Since the SPY fund has gained 139% over the five year span of 2009-2014, the actual cash paid in 2014 was more than twice the amount paid in 2009.

What’s the Punch Line?

If you’re investing, the right information is critical. There’s tons of noise on the web, but simple charts and quality data are a great way to get organized and understand the real market story.

FastTrack training and daily charts have all the information an investors needs to become wealthy. The economy performed poorly over the last 5-years, but news reports of older employees having to postpone their retirement is only true of those who were unaware of the stock market reality.

Ignorance has no bounds . . . the story in 5-years will be the same with the economy up or down.

Get the full story. Call 866-295-0166 for a free trial of FT4Web for individual investors and FTCloud for professional investors.