Fed Rattles Confidence, Utilities Trade Locks-In Profit

by on May 25, 2013 | ETFs Mentioned:

Stocks finally digested some of the stellar gains seen year-to-date after the latest FOMC minutes rattled investor confidence. During Chairman Bernanke’s testimony to Congress last week, it became clear that the Fed is discussing potential exit strategies, which inevitability sent a wave of worry across Wall Street as stimulus hopes faded away. U.S. equities took a dive in the second-half of the week, although bargain buyers helped to recover some lost ground on Friday after durable goods orders data came in better-than-expected [see also The Cheapest ETF For Every Investment Objective].

ETF Insider Recommendations

Our Asia Pacific pick took a turn for the worst as selling pressures in Japan spilled over into the Aussie equity market, which also prompted us to take profits in our XLU position ahead of the prolonged holiday weekend.

Last Week’s Actionable ETF Ideas
Ticker Position Week Performance
EWA

Long

Down Arrow -1.5%
XLU

Long

Up Arrow +8.8%

Closed Trade: Long EWA: Down 1.5%

This channel trade recommendation was mistimed as unexpected profit-taking in Japan led to steep losses for this Australia ETF. EWA got off to an encouraging start and it appeared to be well on its way to resuming its longer-term uptrend; however, fading stimulus hopes on Wednesday sank this ETF past our stop-loss at $26.25, leading us to close the trade at a minor loss. Our conservative stop-loss served us quite well in this instance as EWA closed at $25 a share on Friday.

Closed Trade: Long XLU: Up 8.8%

We finally took profits in this position after it became apparent that XLU didn’t have the momentum to summit $40.50 a share early in the week. This ETF drifted sideways on Monday and Tuesday, and after the FOMC minutes triggered profit taking pressures on Wednesday, we were sure to watch this position and lock-in profits in case it slid below our original price target of $40 a share. XLU followed the market lower and we took profits ahead of the weekend, which turned out for the best as this ETF closed out the week below $39 a share.

ETFdb Portfolios

Retirement ETFdb Portfolios

Our retirement strategies didn’t perform too well as profit-taking pressures on the equity front also plagued certain segments of the fixed income market.  Year-to-date, the best performing strategy remains the 30 Years Til Retirement Portfolio with double-digit gains while the conservative Ready To Retire Portfolio is still the laggard.

ETFdb Portfolio 1 Week 4 Week 13 Week YTD 1 Year 3 Year 5 Year
5 Years Til Retirement Portfolio 0.07% 0.41% 4.15% 5.63% 11.45% 30.31% n/a
10 Years Til Retirement Portfolio 0.14% 0.69% 5.26% 6.77% 13.51% 32.85% 85.66%
20 Years Til Retirement Portfolio 0.12% 0.65% 5.88% 7.75% 14.99% 36.82% 98.47%
30 Years Til Retirement Portfolio 0.15% 0.65% 6.27% 7.54% 15.87% 38.76% 107.10%
Aggressive Portfolio 0.21% 0.58% 6.31% 6.86% 13.82% 26.02% n/a
Cheapskate Portfolio 0.62% 1.57% 5.70% 8.54% 15.38% n/a n/a
Low Volatility Portfolio 0.05% 0.82% 3.77% 5.09% 7.49% n/a n/a
Moderate Portfolio 0.16% 0.42% 4.57% 6.37% 11.51% 26.70% n/a
Ready To Retire ETFdb Portfolio 0.11% 0.59% 3.82% 6.23% 9.41% 23.38% 63.39%
As Of 07-25-2014
Regional ETFdb Portfolios

Foreign equity markets posted mixed results with Europe holding up surprisingly well, while Asia Pacific markets were shaken up following the massive two day sell-off in Japan. Year-to-date, the best performing strategy remains the Global Titans Portfolio while the laggard is the LatAm Centric Portfolio.

ETFdb Portfolio 1 Week 4 Week 13 Week YTD 1 Year 3 Year 5 Year
Africa-Centric Portfolio 0.73% 3.01% 2.12% 9.82% 19.83% 17.25% n/a
Asia-Centric ETFdb Portfolio 0.77% 2.00% 7.89% 7.25% 11.21% 8.86% n/a
BRIC-or-Bust ETFdb Portfolio 0.42% 0.42% 10.04% 6.36% 11.10% -13.14% n/a
Easy-As-ABC ETFdb Portfolio -0.06% 0.01% 4.11% 4.35% -1.01% n/a n/a
Emerging & Frontier Markets ETFdb Portfolio 0.72% 2.11% 7.83% 8.50% 9.80% 2.21% n/a
Euro Free Europe Portfolio -0.11% -1.37% 3.58% 0.09% 7.67% 13.93% n/a
Ex-Europe ETFdb Portfolio 0.31% 1.29% 5.53% 7.64% 12.55% 25.60% 71.25%
Ex-U.S. Portfolio 0.43% 1.03% 4.92% 6.01% 13.23% 15.19% 50.11%
Global Titans ETFdb Portfolio 0.14% -0.26% 2.95% 3.65% 11.58% 25.80% n/a
LatAm Centric ETFdb Portfolio 0.63% 1.95% 7.51% 4.47% 4.21% n/a n/a
As Of 07-25-2014
Themed ETFdb Portfolios

Our themed strategies turned in mixed performances as choppy trading permeated Wall Street this past week. Year-to-date, the Baby Boomers Portfolio remains at the top of the performance list while the GLD-Free Gold Bug Portfolio is still by far the worst performer from this group.

ETFdb Portfolio 1 Week 4 Week 13 Week YTD 1 Year 3 Year 5 Year
Actively-Managed ETF Portfolio 0.43% 1.50% 4.34% 4.58% 7.66% n/a n/a
2012 ETFdb Portfolio 0.24% -0.10% 6.91% 8.23% 16.41% n/a n/a
AlphaDEX ETFdb Portfolio 0.35% 0.29% 4.89% 4.94% 11.56% 20.45% n/a
Alpha Seeker Portfolio 2.0 -0.36% 0.38% 5.10% 6.68% 11.80% 27.53% n/a
Baby Boomers ETFdb Portfolio 0.08% -0.37% 7.03% 7.81% 21.61% 67.44% n/a
Ben Graham 50/50 Portfolio 0.06% 0.74% 4.62% 6.51% 10.06% n/a n/a
Better-Than-AGG Total Bond Market ETFdb Portfolio 0.25% 0.30% 2.13% 5.07% 5.30% 10.40% n/a
Black Swan Hyperinflation Portfolio 0.04% -1.04% 1.44% 6.18% 3.37% -13.10% n/a
Commodity Guru ETFdb Portfolio 0.40% -0.50% 1.84% 4.53% 6.36% -2.74% n/a
Cheapskate Hedge Fund ETFdb Portfolio -0.20% 0.83% 2.07% 2.26% 2.97% -2.96% n/a
Energy Bull ETFdb Portfolio 0.51% -1.27% 4.38% 8.04% 15.13% 15.09% n/a
Equal Weight ETFdb Portfolio 0.38% 0.38% 4.60% 6.40% 11.27% n/a n/a
Financials Free ETFdb Portfolio -0.03% -0.25% 3.07% 7.00% 14.17% 31.05% 81.14%
Futures Free Commodity ETFdb Portfolio 0.40% 0.60% 3.25% 5.28% 6.26% -18.68% n/a
GLD-Free Gold Bug ETFdb Portfolio -0.80% 0.90% 5.40% 20.34% 2.37% -32.81% n/a
Greedy When Others Are Fearful ETFdb Portfolio 0.79% 1.86% 5.04% 9.00% n/a n/a n/a
High-Tax Bracket ETF Portfolio 0.21% 0.25% 4.25% 5.95% 12.22% 24.54% 70.43%
High Tech ETFdb Portfolio 0.96% 1.99% 11.30% 11.32% 23.45% n/a n/a
High Yield ETFdb Portfolio -0.07% 0.05% 4.50% 7.28% 12.76% 38.83% 97.47%
King Dollar ETFdb Portfolio 0.44% 1.25% 4.25% 5.39% 8.84% 22.14% n/a
Kitchen Sink ETFdb Portfolio 0.14% -0.35% 3.00% 4.44% 9.69% 21.81% n/a
Monthly Dividend ETFdb Portfolio -0.08% -0.44% 3.42% 7.62% 11.99% 32.83% n/a
Pure Growth ETFdb Portfolio 0.30% -0.00% 5.78% 5.90% 13.12% n/a n/a
Pure Value ETFdb Portfolio 0.01% -0.30% 4.87% 6.59% 16.05% n/a n/a
RAFI ETFdb Portfolio 0.29% 0.33% 6.02% 5.92% 16.45% 32.40% 96.40%
Simple (But Effective) Safe Haven ETFdb Portfolio -0.30% -1.14% 1.54% 7.65% 9.32% 18.84% 63.56%
Small Cap ETFdb Portfolio 0.07% -0.71% 3.60% 4.61% 10.98% 24.97% n/a
The Sky Is Falling Portfolio 0.45% -0.29% -1.36% 1.15% -0.57% 1.09% n/a
Socially Responsible ETFdb Portfolio 0.11% 0.05% 4.65% 5.28% 10.96% n/a n/a
Risk On ETFdb Portfolio -0.21% 1.06% 8.02% 10.75% 19.26% n/a n/a
Consumer Centric ETFdb Portfolio -0.11% 0.69% 3.33% 4.15% 12.23% n/a n/a
Agri-Bull ETFdb Portfolio 0.05% -1.89% -1.34% 4.83% 8.43% 5.05% n/a
8% Yield ETFdb Portfolio 0.36% -0.16% 4.38% 8.58% 13.49% n/a n/a
Mining Boom ETFdb Portfolio 0.87% 3.43% 9.02% 12.99% 10.84% n/a n/a
2013 ETFdb Portfolio 0.40% 0.18% 4.58% 8.00% 11.94% n/a n/a
As Of 07-25-2014

Disclosure: No positions at time of writing.