The Financial Times reports on the record breaking growth in the ETF industry and the two firms that are leading the charge. No surprise to see Vanguard and Blackrock continuing to dominate the space. Vanguard is a pioneer and a powerhouse in indexing, and Blackrock's ETF business has long been a leader in the space. Champagne corks should be popping in celebration across the exchange traded fund industry after a third successive year of record-breaking growth. But many ETF providers will have left their fizz on ice after again struggling to mount any meaningful challenge against BlackRock … [Read more...]
Archives for January 2017
One Look at America’s Debt Will Make You Cringe
These two charts paint a disturbing picture for the future of America’s finances. Over the last eight years, the Federal Government has gone on a spending spree, more than doubling the ratio of government debt to GDP. One would think such a large increase in government debt would have been an expensive proposition, but it wasn’t. A zero interest rate policy from the Fed and a multi-trillion dollar bond buying program subsidized massive budget deficits. Our chart on the ratio of interest expense (gross) to GDP shows that Federal interest expense as a share of the economy is now lower than it … [Read more...]
How Does the Stock Market Look for Trump vs. Obama?
You might be feeling optimistic about the stock market now that President Trump is in office. Most of my conversations this week have had an optimistic tone. But what does that mean for stocks? Let’s look at what we know. When President Obama took office during the housing bust, he inherited a stock market that saw the Dow Jones Industrial Average plumbing the depths at 7500. It was an ugly time to be sure, but looking back from an investor’s standpoint, the market was at a much more attractive value than it is today. That doesn’t mean the stock market can’t go up from here as Trump gets to … [Read more...]
Alibaba, Microsoft, Amazon the Awesome Big Three of Cloud Services
It figures, as the WSJ explains, to be another banner year for the massive Chinese e-commerce player. Buoyed by China’s insatiable online shoppers, Alibaba Group Holding Ltd. posted a strong third quarter, raised its revenue outlook and said it would step up investments to expand its digital media and cloud businesses. Alibaba, which runs China’s most popular e-commerce websites Taobao and Tmall, said Tuesday that fiscal year 2017 sales would rise 53%, up from an earlier forecast of 48%. The Chinese e-commerce giant is riding the wave in the country’s online retail growth as internet … [Read more...]
Is Wells Fargo Too Big to Succeed?
When a bank gets too big, it’s the customer who usually pays the price. Look no further than Wells Fargo: As Wells Fargo & Co.’s sales-tactics scandal unfolded, investors, regulators and politicians asked how improper practices could have persisted for so long. One possible reason: bank branches were given a heads up before Wells Fargo’s internal monitors landed for inspections. Managers and employees at the bank’s roughly 6,000 branches across the U.S. typically had at least 24 hours’ warning about annual reviews conducted by risk employees, current and former Wells Fargo employees … [Read more...]
Here is Why the Stakes are so High with NAFTA
In one of his first executive orders, President Trump has promised to renegotiate the North American Free Trade Agreement (NAFTA). Since the signing of NAFTA in 1994, trade among the member countries has increased significantly and North American supply chains now sprawl across Canada, Mexico, and the U.S. The stakes of a renegotiation are high, but the opportunity for the U.S. to strike a better deal is significant. Donald Trump has put “renegotiating” the two-decades-old North American Free Trade Agreement between the US, Canada and Mexico at the top of his economic agenda and threatened to … [Read more...]
A Major Apple Supplier Plans Massive U.S. Expansion
The creation of 30,000 to 50,000 good paying jobs may be just over the horizon. The Wall Street Journal lays out the plan. BEIJING—Electronics manufacturer Foxconn Technology Group is considering investing $7 billion to build a flat-panel screen factory in the U.S., but the company founder says incentives will be needed to make the deal happen. Speaking at a Foxconn company event in Taiwan on Sunday, founder and chairman Terry Gou said the factory could create 30,000 to 50,000 jobs in the U.S., and discussions were already under way with state and local officials in Pennsylvania and other … [Read more...]
You Need to Know What Happens When You Make Savings Urgent
Saving early and often is always a great idea. One of the biggest obstacles to long-term peace of mind and safety in your retirement is: You. If you realize that, then you’re on your way to realizing the retirement you deserve. The good news: Academics are finding ways to make the future seem more immediate and demanding of attention in various contexts, including saving for retirement. The new techniques—hailing from the field of behavioral science—have been shown to motivate people to save more and earlier, advantages that give money more time to grow. The bad news: The savings crisis is … [Read more...]
This is why Investment in Infrastructure is Soaring
At Young Research, infrastructure assets have long-been one of our most favored investment sectors. The business models of many infrastructure businesses have appeal. The competition is limited, the cash flows are stable, the revenue streams are often inflation-adjusted, and the dividend payout ratios are generous. Recently, we have been less active in the space than in years past. Why? Great businesses don't always make great investments. As the Financial Times reports, institutional investors have been pouring billions into infrastructure assets in search of yield. A prolonged period of … [Read more...]
Wait Until You See The Amazing Year Energy has in 2017
It is going to be a great year for U.S. energy producers in 2017. The Wall Street Journal outlines some breathtaking prospects. Oil producers, optimistic that higher crude prices are here to stay, have issued 2017 budgets that call for dramatically greater spending to tap new wells. Preliminary capital-spending plans released in recent weeks by more than a dozen American shale drillers, including Hess Corp. and Noble Energy Inc., show an average 60% budget increase for the group. The trend comes after two years of austere budget cuts and layoffs at shale companies to help them cope … [Read more...]
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