Tag Archives: ideas

Amazon Vs. Alibaba: Cloud Computing & Infrastructure Growth

Online retail giants Amazon ( AMZN ) and Alibaba ( BABA ) have both seen massive growth in their cloud computing businesses over the past few years. Both Amazon Web Services (AWS) and Alibaba’s cloud computing and infrastructure segments have outpaced

A Quick Example Of Rebalancing Theory At Work

I know I go on and on about disciplined rebalancing. In this article , I also address the concept that each asset class in your portfolio can be viewed as a form of “currency,” and can be expensive or cheap. Today, I merely wanted to share a quick real-world example of how this worked in my personal portfolio. The picture below is a 6-month graph from Yahoo Finance. The blue line represents the Vanguard REIT Index ETF (NYSEARCA: VNQ ), the red line the Vanguard Utilities ETF (NYSEARCA: VPU ) and the green line the S&P 500 average. Click to enlarge You will quickly notice that both VNQ and, even more dramatically, VPU have outperformed the S&P. As a result, the “overweight” indicator recently flashed up for both of them in my portfolio, to the tune of about 7-8% overweight. The red arrows represent my two recent sales to bring them back in line; VNQ on 5/9 and VPU on 5/13. Want to know a little secret? As I write this, both are now slightly underweight in my portfolio. The sharp drop you see in both at the very end of the graph is because the Fed minutes released today appear to indicate that a June rate hike is back on the table. As a result, all interest-rate-sensitive asset classes took a beating. So, now I have an opportunity to watch for a chance to possibly buy back in at lower prices. Not because I’m brilliant. Simply because I monitored and acted on my weightings in a disciplined manner.

Homebuilder ETFs To Buy On Upbeat Data

After being stalled in the first quarter, the housing market started to show signs of a spring rebound. This is especially true given that new home construction and building permits rebounded in April, indicating that the U.S. economy is again gaining steam (read: Are Housing ETFs Ready to Ride on Spring Selling Season? ). U.S. housing starts climbed 6.6% to a seasonally adjusted annual rate of 1.17 million homes and much higher than the Reuters expectation of 1.13 million. The uptick in construction activity was broad-based with increases of 3.3% in single-family houses, and 10.7% in multi-family houses, including apartments and condominiums. Meanwhile, new applications for building permits, a construction bellwether for the coming months, rose 3.6% to an annual rate of 1.12 million after declining for three months. The data released early this week showed that homebuilder confidence remained unchanged for the fourth consecutive month in May as indicated by the National Association of Home Builders/Wells Fargo sentiment index. Builders’ outlook for sales over the next six months jumped to the highest level since December. This reflects that the housing market is still strengthening, though the pace of growth has slowed down (read: 5 Sector ETFs to Play Now ). This is because historically low interest rates and ongoing job creation will continue to fuel growth in a recovering homebuilding sector, creating a buying opportunity in homebuilders and housing-related stocks. In addition, slower and gradual rate hikes will not impede the growth prospect of the sector, at least in the near term. Given this, investors might want to look at the three homebuilder ETFs – the iShares U.S. Home Construction ETF (NYSEARCA: ITB ) , the SPDR S&P Homebuilders ETF (NYSEARCA: XHB ) and the PowerShares Dynamic Building & Construction Portfolio ETF (NYSEARCA: PKB ) – for their exposure to the sector. These funds have a solid Zacks ETF Rank of 2 or ‘Buy’ rating, suggesting some outperformance in the months to come. Further, the residential and commercial building industry has a solid Zacks Rank in the top 34%. While the upbeat data failed to garner interest in the sector this week, investors could start piling up these products in their portfolio, especially if the upcoming home sales report due to release on May 24 also shows strength. In particular, PKB is outperforming with gains of 5.8% so far in the year while ITB and XHB have shed 2.5% and 3.5%, respectively. Investors seeking large profits in a short span could also take a look at the leveraged plays – the ProShares Ultra Homebuilders & Supplies ETF (NYSEARCA: HBU ) and the Direxion Daily Homebuilders & Supplies Bull 3x Shares ETF (NYSEARCA: NAIL ) . HBU provides double exposure while NAIL offers triple exposure to the index of ITB. However, the fund is relatively new in the space and has low trading activity, making it a riskier and a high-cost choice. Link to the original post on Zacks.com