Beware the Currency Market Turmoil

In This Issue:

Video Alert Podcasts Beware the Currency Market Turmoil An ETFU.com List Mania ETF Talk: Featuring Another Giant S&P 500 Fund Deeper Ways to Be a Better ETF Investor in 2015 Rogue Change Hurts

By: Doug Fabian | Editor, Successful ETF Investing | President, Fabian Wealth Strategies

Beware the Currency Market Turmoil

There have been two big trends influencing the markets during the past several months, particularly since early December, and they are the decline in oil prices and the rise in the value of the U.S. dollar vs. rival foreign currencies. I wrote about both of these trends in last week’s issue, as well as in the most recent issue of my Successful ETF Investing newsletter. This week, the big noise came from another currency market, as the Swiss National Bank, or SNB, unexpectedly removed its cap of the franc to the euro. Why was this done? Well, because the SNB thinks that the European Central Bank, ECB, is going to implement some type of a very large quantitative easing (QE) program when it meets next week, and that move would be euro bearish and Swiss franc bullish. You’ll Never Guess Who’s About to Crash the DOW Don’t believe all of the rhetoric you’re hearing about President Obama’s “clueless” leadership… he knows exactly what he’s doing. His hidden agenda is slowly but surely coming to fruition behind the backs of the American people. The worst part: the success of this “master plan” relies on a massive stock market crash! Click here now for the urgent exposé that could save your portfolio from the inevitable. Click Here Now! It also will likely be dollar bullish, and that means more upside for the greenback and the U.S. Dollar Index. Now, another thing the currency market turmoil is telling us is that the global economy is a treacherous place right now. There’s a lot of stress being put on currency markets in anticipation of the ECB’s QE decision, and that’s causing the dollar to rise – and dollar-denominated assets such as oil and other commodities to falter. The chart below of the benchmark commodity index, the DB Commodities Tracking Index Fund (DBC), tells us all we need to know about the value of dollar-denominated assets and their plunge during the past six months. At this juncture, investors need to really be aware of the machinations in the currency markets, as the fate of the greenback has much wider implications for oil, commodities, multi-national corporate earnings and bond yields. Not being aware of this situation is both negligent – and flat-out dangerous. An ETFU.com List Mania Do you know what the best-performing U.S. sector exchange-traded funds (ETFs) were in 2014? How about the best-performing commodity ETFs? What about the top-performing fixed-income funds? More importantly, do you know where to go to find out this type of critical investment information? Well, now you do, and the place to get it all is my new website, ETF University, or simply ETFU.com. Here is where you’ll find a host of “Top 10” lists featuring myriad categories of exchange-traded funds. Stocks, commodities, bonds, international, domestic, tech, etc., all the key areas you want to know about are covered at ETFU.com. So, what are you waiting for? Go to ETFU.com and get all of your favorite Top 10 lists – absolutely FREE. So THAT’S How Wall Street Always Wins… I want you to ask yourself this question: How reliably do you book short-term trading wins of 426%… 730%… even as much as 800% in just weeks? My guess is that it’s probably not very often, if ever. You see, a select few people know the real rules of the trading game. I’m talking about the secret rules Wall Street uses to control the options market. Among the “pros” who work on The Street, revealing these rules is strictly taboo. But today, a veteran hedge fund and trading house advisor is going rogue and revealing the incredible strategy that exploits a hidden flaw in these rules that can provide HUGE options profits. Click here now to uncover the trading strategy that has led one group of traders to 40 triple-digit wins in just the past 18 months! Click Here Now! ETF Talk: Featuring Another Giant S&P 500 Fund Last week, I tackled the biggest exchange-traded fund (ETF) on the market, SPY. Today’s ETF Talk will examine another ETF that tracks the S&P 500. Unlike SPY, this week’s fund is run by BlackRock’s iShares. This fund has a much smaller amount of assets under management than SPY does, but it is nonetheless the second-largest ETF in existence. The world’s second-biggest ETF is iShares Core S&P 500 ETF (IVV). IVV’s 2014 gain of 11.43% closely matched the returns of the S&P, the U.S. domestic large-cap index that IVV seeks to match. Holding nearly $70 billion in assets is no small feat, much as it pales in comparison to SPY’s gargantuan market share. Just like SPY, IVV’s holdings match those of the S&P 500 index, though IVV differentiates itself from similar ETFs with its low expense ratio of 0.07%. The S&P 500 has had a bumpy start this year. But if markets return to form, IVV will reap the benefits. This ETF provides a dividend yield of 1.83%. IVV invests 17.38% of its assets in its largest 10 positions, all of which are big, recognizable names. These giant public companies include Apple Inc. (AAPL), 3.60%; Exxon Mobil Corporation (XOM), 2.13%; Microsoft Corp. (MSFT), 2.12%; Johnson & Johnson (JNJ), 1.63%; and Berkshire Hathaway Class B shares (BRK-B), 1.51%. If you are looking for a way to get exposure to the broad U.S. domestic large-cap market without breaking the bank, iShares Core S&P 500 ETF (IVV)’s low expense ratio could provide a tempting offer. If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk. Deeper Ways to Be a Better ETF Investor in 2015 In last week’s issue, I offered you 10 suggestions on how to be a better ETF investor in 2015. This week, I want to elaborate on the first three of those suggestions, as I think each deserves a little deeper analysis. Let’s take a closer look now. 1) Find more money to invest in ETFs. This may seem a bit confusing, but it’s really not. When I say find more money to invest in ETFs, I am not suggesting that you go out and get a new job so you can earn more money (although there’s nothing wrong with that). What I am suggesting is that you alter your current asset mix so that you can rotate out of higher-cost, higher-risk assets such as mutual funds and/or individual stocks and rotate into lower-cost, and often lower-risk, exchange-traded funds. Also, if you have money tied up in, say, a savings account that’s paying you virtually zero interest (returns here actually are negative when you factor in inflation), then it’s time you consider moving that money into your brokerage firm and buying low-risk ETFs. Finally, if you have money tied up in an old 401(k)-type account from a former employer, you need to do an IRA rollover so you can get out of restrictive fund choices and move money into much-more-flexible ETFs. 2) Consolidate your accounts at one brokerage. Believe it or not, this is one of the biggest problems I see when analyzing investor portfolios. In fact, many prospective clients of my advisory firm, Fabian Wealth Strategies, tell me they have relationships with half a dozen or more brokerage and financial firms. The way I see it, there is no good reason to have more than one brokerage account. Quality firms such as Fidelity, Schwab, TD Ameritrade or Vanguard aren’t going anywhere, and you only need one to take good care of your hard-earned capital. The only real byproduct of having multiple accounts at multiple financial institutions is a negative one, and that is confusion. More paperwork, more passwords, more phone numbers and more and more self-inflicted problems, and, well, just more of what you don’t need in your life. I recommend moving your assets to one brokerage firm, making life a whole lot easier in 2015. 3) Start a Roth IRA. If you qualify for a Roth IRA, and if you don’t have one, then you are only hurting yourself and your overall investment returns. Why? Well, because a Roth IRA is a tax-free savings account. The key word here is FREE. When you have a Roth IRA, there are no taxes on withdrawals of your contributions at any time, nor are there any taxes on earnings in retirement. There are also no required minimum distributions with a Roth. You can contribute $5,000 per year ($6,000 if you’re over 50), and while this may not be a lot of money to you, the tax-free aspect of a Roth IRA automatically gives you a better return on your investment dollars than you would get with a standard IRA, or with a regular investment account. So, if you don’t have a Roth IRA and you qualify, then now is the time to open one up. Next week, we’ll take a deeper look at three more ways to be a better ETF investor in 2015. NOTE: Fabian Wealth Strategies is a Securities and Exchange Commission-registered investment adviser, and is not affiliated with Eagle Financial Publications. The Company that “Beat” Obama One of Obama’s signature environmental stands is stopping the controversial Keystone Pipeline from getting approved. And yet, a single company has gone around him and created something that will not make him happy. Now, they’re generating mountains of cash and Obama can do little to stop it. Go here for the whole story. Click Here Now! Rogue Change Hurts “Change hurts. It makes people insecure, confused, and angry. People want things to be the same as they’ve always been, because that makes life easier. But, if you’re a leader, you can’t let your people hang on to the past.” – Richard Marcinko, “The Rogue Warrior” Although many of us say we want to change our lives, particularly with those New Year’s resolutions, I think very few of us actually want to embrace the discomfort associated with change. Why? Well, because like former Navy SEAL Team 6 creator Richard Marcinko, a.k.a. The Rogue Warrior, says, “Change hurts.” Well, sometimes, you have to hurt to grow. And, if you are a parent, businessman, corporate manager or in any field where you have to motivate others, then you must make yourself and your people know that change is both necessary and essential to becoming better in life. Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Weekly ETF Report readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug. In case you missed it, I encourage you to read my e-letter column from last week on Eagle Daily Investor about why the market could be volatile in 2015. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.

All the best, Doug Fabian