Max Money Blog

Looking to invest and not sure what to buy?

If you are looking for a simple buy and hold portfolio and at-most once a year rebalancing, look no further than these Lazy Portfolios that we have profiled. Their latest performance numbers are here.

That’s it, you are done. You are well ahead of the majority of the money managers and actively managed mutual funds out there.

If you are the adventurous kind, we would recommend putting atleast 80% of your money in one of the Lazy Portfolios. See how you do with remaining maximum of 20% first before you jump with everything into Tactical Asset Allocation.

Now that you are settled with a Lazy Portfolio and are looking for some action…

Start with the Asset Class Strength page. Here you can see the current state of Stocks, Bonds and Commodities. You can also see how they have performed in the recent past.

The Asset Class Strength page will tell you where to put your money today, if at all. If any asset class is ‘red’, it may be best to wait it out for now. Once it enters the yellow zone, start with small percent of your money first and wait a week and see it the trend is building up.

The Asset Class strength page, and related three ETFs, are all that you need to beat the star money managers.

Let’s say you have perused the Asset Class Strength page and now know where to put your money, read on…

• If you choose to invest in Stocks…
  You can either buy a broad market fund and be done with it. Our ETF rankings and signals page can help you choose any ETF, including one which invests in a broad US Stock market index.

  If you are looking for a particular size fund, as in Large-cap, Mid-cap or Small-cap; or a style fund, as in growth or value; or a combination of size and style, my Style/Size strength page would be an excellent starting point to determine what is in favor. For the Sector investor, there is a page for you too :-). If you are looking to invest outside the united states, you will find the Country strength page very helpful.

  In either case, once you know which narrow asset class you’d like to invest in, you can come back to the ETF rankings page to find that best fund for you.

• Should you prefer Commodities…
  Your next question should be whether to put the money in Energy, Grains, Livestock, Precious Metals or Industrials. The Commodity Strength page can help you answer that question. Armed with the information, you can view all the Commodity ETFs that maxmoneyblog.com tracks here. You could also get to this page from the main ETF rankings page.
• Finally, if Bonds fascinate you, our preference is TLT or the 20+ year bond. There is a new Vanguard Long Bond ETF too, but we need to let it build some history first. You will, however,  find lots of arguments in literature against buying the long term bond. But we leave that to you. You can find the bond rankings from the main ETF rankings page.

If there is an ETF that you’d like us to track, do leave a comment, or send an email to info@maxmoneyblog.com.

Disclaimer: ETF rankings and signals are for educational purposes only and should not interpreted as an investment advice.

The Sovereign Society submits:

With the International Monetary Fund, or IMF, poised to sell some of its gold this year, gold bug investors are on edge.

That imminent sale will probably put some pressure on gold this summer, but don’t let it depress you; the big picture remains unchanged as it pertains to the next dollar crisis, skyrocketing U.S. debt levels, and the drive to create inflation by deflation-battered and wounded central banks.

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Since the Fed announced its intention to “monetize” (i.e. buy with newly printed dollars) our own Treasury debt, analysts have been pondering the eventual outcome of this operation. Will the marketplace render a verdict, in the form of a much weaker dollar or a much higher gold price, that the U.S. is pushing too far the privileges of issuing the world’s reserve currency? (Our sense is that the dollar’s status is not likely to be threatened anytime soon, due to a lack of credible alternatives, and a shared global interest in getting through this crisis without introducing another major uncertainty into a fragile marketplace.)

Will the Fed artificially suppress longer-term Treasury yields to such a degree that there will be no willing buyers, apart from the Fed, for the T-Bonds that will need to be issued in great quantity to fund projected fiscal deficits?

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Sean Hyman submits:

By Sean Hyman

When you want to see which currency could be the “top performer” when things recover, you want to see who got crushed the least fundamentally. I often say it this way: Who won the “least ugly contest”?

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Trader Mark submits:

Thanks to reader Adam for finding these clips of Hugh Hendry courtesy of Greenlight Advisors. As always Hugh is if nothing else entertaining; I don’t agree with it all of course but this is a bright mind… [Mar 20: Hugh Hendry of Eclectica Asset Management is Wickedly Good]

On a side note I don’t feel quite so bad about the past 2.5 weeks once I saw this on Zerohedge

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Macro Man submits:

It is heartwarming, as a citizen of the world and a taxpayer of the United States, to see that another of our beleaguered financial institutions has apparently righted the ship after the recent travails of the industry. Having received access to government guaranteed funding, central bank asset purchases, and a capital top-up from the public purse, JP Morgan (JPM), like Goldman (GS) before them, beat consensus earnings expectations and declared its participation in the TARP to be a "scarlet letter" which it would be happy to be shot of.

We’ll leave aside the issue that Q1’s robust performance, if repeated for the next three quarters, would have JPM earning $1.60 this year- and thus trading on a P/E of more than 20, which hardly seems to be compelling value. No, the real question is how much would the Goldmans and the JPMs and the Wells Fargos (WFC) be earning if they had to raise the money themselves, didn’t have the Federales trying to polish their turds, etc. One can only hope that if the TARP funds are paid back, all of the special benefits these guys have enjoyed are also summarily withdrawn; access to the Fed programs, the FDIC guarantees, etc. Hey, there’s nothing wrong with these guys wanting to stand on their own; but if they do, they shouldn’t expect to see dime one of help from John Q. Taxpayer.

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Michael Malpede submits:

FX Highlights

• USD firms versus Europe with EUR pressured by comments from ECB President Trichet that the ECB will decide on unconventional measures at the May policy meeting, EUR was also pressured by report that Moody’s plans to put Ireland’s bond rating on watch, CHF lower as Swiss retail sales drop sharply and
SNB threatens intervention, CAD lower as Canadian CPI falls more than expected
• Japan’s February tertiary index falls to a four year low down 0.8%, BOJ governor Shirakawa says the Japanese economy is worsening sharply and more deterioration is likely, JPY mixed gains in cross trade to Europe
• Australia’s Q1 CPI rises 0.3%, and 3.0% y/y, high yield currencies marginally lower on reduction of risk even as stocks rise, AUD mixed
• ECB President Trichet says ECB will decide on unconventional monetary measures at the May policy meeting, Trichet expects global recovery to start in 2010, Moody’s may cut Ireland’s bond rating, EU trade deficit smaller than expected but exports fall, EUR lower
• Swiss February retail sales fall 3.8%,y/y,SNB says they will continue with the policy of FX intervention as long as deflation is a risk ,CHF lower
• BOE ’s Barker says inflation targeting is not enough, GBP lower versus USD gains versus EUR
• Canada’s annual inflation rate slowed to 1.2% in March from 1.4% last month, CAD lower
• Fed ‘s Yellen says the US economy is not out of the woods and still contracting, Feds Fisher says US in bone crushing recession, global recession worse than 1940s , inflation not a threat for the next couple of years, Fed policies will expedite recovery
• Nikkei reports that China’s foreign minister said that China plans to keep buying US
• Fed’s Lockhart expects US economic downturn to end soon and upturn in Q3, he does not expect a strong recovery
• IMF Strauss- Kahn says yuan is substantially undervalued and called on China to let the yuan appreciate
• US equity market set to open higher, European equities close higher, Nikkei closed 157 points higher

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Cornelius submits:

A recently released report from Goldman (GS) is making the rounds and is amping up the buying temperature for a perennial institutional favorite, the carry trade. Even Bloomberg has picked up the story and is running with the theme. They specifically call out two ZH favorites, the BRL and the AUD - however we think this move is really too early/too late, depending on how you look at it.

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“We have lent a huge amount of money to the U.S., so of course we are concerned about the safety of our assets. Frankly speaking, I do have some worries.” These words, spoken by Wen Jiabao, the Premier of the State Council of the People’s Republic of China, shortly before the G-20 started could well be seen as posturing. In a more genteel sense they were similar to the smack that gets “talked” across the line of scrimmage before the ball is snapped on any given Sunday. (Yes, I know it’s baseball season, and the start of it at that but a guy can dream can’t he?)

That China is simultaneously making moves within its own country to increase the use of the Yuan for trade purposes might add a little weight to WJ’s pre-G-20 chatter. Last week the Chinese government designated five of its biggest trading cities to take part in a planned program allowing foreign trade to be conducted fully in Yuan, instead of in dollars or other major currencies.

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Dollar up as data declines

Just when everyone has turned bearish on the U.S. dollar, it has its eyes set on the strongest level since the day the FOMC announced quantitative easing. Since then investors turned medium-term bearish according to a Bloomberg poll and expect the Fed’s printing press approach to dilute the dollar and detract from its appetite. The only problem is with the dollar today rallying to $1.3130 against the euro, is that weakness in core economic data is proving that quantitative easing is needed to a larger and longer degree than perhaps first expected, while it will also need to be adopted by the European Central Bank, which of course detracts from the dollar’s first alternative..

Stock markets continue to reel from weakness in U.S. consumption habits and the bears are telling the bulls to rein in their horns with their premature optimism built on fear of missing the rally more so than on hard data. The turnaround has softened commodity prices and undermined the appeal for riskier assets and in turn currencies in emerging and commodity sensitive markets.

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