ETF thread

Discussion in 'Stock picks and trading strategies' started by Technical Alchemist, Jan 31, 2008.

  1. Technical Alchemist

    Technical Alchemist forum leader won penny contest 13x won weekly contest 12x

    It seems ETFs get a lot of coverage in the larger media arena but that they are seldom discussed here on the micro level. My hope is that this thread can serve as a general forum for the discussion of new and even existing ETFs, trends in these vehicles, and also serve as a discussion on strategies respective to ETFs.

    As a relatively new investor (DRIP for 10+ yrs / active management for ~3 yrs) what we are experiencing in the market is foreign to me. I remember the flat lining of the markets from '05 and before (I've been a student of the markets well before putting money to work) and obviously was rewarded nicely, like many of you, with the oil, commodities, emerging market as well as tech bull markets of the past couple years. However, at this juncture with the economy in recession or at least on the brink I do not have personal experience navigating the many treacherous pitfalls one can make with extreme volatility and vacillation in the markets. For this reason I'd like to spread some of my risk by purchasing ETFs rather than individual stocks until the market environment normalizes or stabilizes.

    The general consensus seems to be that banks should benefit from an increase in the yield spread due to a low interest rate environment. Also retail is predicted to be a winner. I would like to avoid the possibility of getting my picks wrong by choosing a bank that will disclose larger than expected write downs or a retailer than runs in to a raw cost issue or whatever one could imagine goes wrong. However, I would like exposure to these sectors and was wondering if any of you can recommend a few strong ETFs in these sectors for me to apply my due diligence. I'd prefer to go domestic in this endeavor as I believe it is still time to be somewhat conservative though I'd like to dip my toes in the water once again and put money to work. I have no problem locating sector ETFs but evaluating fund families (and do managers even matter in this arena?) is something I am not familiar with. Can any of you offer guidance on these new-to-me investment options?

    Thanks in advance for your replies.
     
  2. wallstreetsedge

    wallstreetsedge Active Member won weekly contest 2x

    banks..there are several...

    EES
    EEZ
    EPS
    EXT
    EZM
    EZY
    FXO
    IAT
    IYF
    IYG
    PFI
    PGF
    PRFF
     
  3. johnnyLite

    johnnyLite Member

    I have been thinking about the same strategy because I am still not confident enough in my skills to pick individual stocks in this volatile market and I do not have a large portion of money to spend.

    http://online.wsj.com/public/quotes/etf_screener.html Is a pretty good ETF screener I have tried.

    Vanguard has some pretty decent ETFs, pretty low expense ratios too, all under .30 that I have seen. I have index mutual funds through them and I like their site. I use Scottrade to do stocks, but Vanguard has some good products. Also, the SPDRs are worth looking at.
     
    Last edited: Feb 1, 2008
  4. johnnyLite

    johnnyLite Member

  5. dicarcz

    dicarcz New Member

    I just posted a seperate topic, I didn't realize there was a ETF thread already, sorry about that.

    Anybody have any thoughts on NLR? Market Vectors Nuclear Energy ETF.
     
  6. BuyOnDips

    BuyOnDips Active Member

    For those interested in researching ETFs, Yahoo finance is a good place to start. Never bought an ETF, but probably will in the near future.

    Yahoo has added a "component" link on their stock listings. Find a stock you like there. Then click on the component link. For example here's the component page for Costco(COST):
    http://finance.yahoo.com/q/ct?s=COST

    That page shows you the listings of ETF's that have COST as a top 10 holding. Then click on any of the ETF links on that page. I clicked on PSL.
    http://finance.yahoo.com/q?s=PSL

    If you click on the holdings link on that page it will list the top 10 holdings of that ETF.
    http://finance.yahoo.com/q/hl?s=PSL

    That's one way of finding an ETF with a specific stock you like.

    Yahoo's ETF center is a great source for researching ETFs.
    http://finance.yahoo.com/etf


    Let us know what ETFs you eventually pick MCD. Good luck.

    BTW, PSL looks like a fairly conservative retail/recession ETF play. It's up 5% YTD.
     
    Last edited: Feb 2, 2008
  7. BuyOnDips

    BuyOnDips Active Member

  8. Jelly

    Jelly Member

    Check volumes for some of these. Sometimes you leave too much on the table. They can move really fast.

    If you also track the reciprocal ETF, that and the indices give several confirmations of trigger points (and co-ordinated head fakes too).
     
  9. optimus25

    optimus25 Active Member

    www.etfconnect.com

    This site has always been a great resource for me when looking up ETFs and Closed end funds.

    Ishares is the undisputed king of ETFs so check out their website:

    www.ishares.com
     
  10. Technical Alchemist

    Technical Alchemist forum leader won penny contest 13x won weekly contest 12x

    Awesome. Thanks for your replies everyone.

    BTW, anyone know of a nat gas ETF sans oil and oil service? The one thing I have learned is not to fight a trend and it seems this is the next area of manipulation like crude of years past and the tech run-up in the second half of '07. I still think a better entry awaits but I will be eyeing the sector.
     
  11. Technical Alchemist

    Technical Alchemist forum leader won penny contest 13x won weekly contest 12x

    Does anyone think EWZ is a good longterm play for a self-directed IRA or Roth. Given the account this would likely be a longterm holding. I don't hold individual equities in qualified accounts due to the risk - other than an occassional oil trust for the divvy - but I think ETFs might be a good substitute for the common mutual fund.

    Thoughts?
     
  12. wallstreetsedge

    wallstreetsedge Active Member won weekly contest 2x

    imo if youre looking for something to just throw into your retirement acct and forget about it.. you might as well buy a big well known co like KO and JNJ and sell out the money calls on them every month
     
  13. netwrangler

    netwrangler Well-Known Member

    Yes, I think EWZ is an excellent longterm holding.

    I am long EWZ and sell out of the money calls against it each month. Doing this inside an IRA simplifies the paperwork and defers the taxes. It's a great strategy.
     
  14. Horsefish

    Horsefish Member

    Another instrument to look at for an IRA are preferred stocks of large banks right now. Check out CpF, a citigroup issue pps 23.35, face of 25.00, yield 7.66. And BACpI, Bank of America, pps 22.11, face of 25.00, yield 7.47. Will get yield and cap gain on these.
     
  15. Technical Alchemist

    Technical Alchemist forum leader won penny contest 13x won weekly contest 12x

    Thank you for your recommendation, both of you.

    EWZ has been pulling back quite a bit so I may play the waiting game. Anyone have an idea why this is down? It can't be oil since Brazil is energy independent. Global slowdown perhaps?
     
  16. netwrangler

    netwrangler Well-Known Member

    Brazil is a dynamic [and volatile] economy.

    That makes it [and its ETF - EWZ] a good candidate for long term investment.

    For those intrepid traders amongst us [hey, probably more than one] it is also a candidate for trading.

    So, MCD, you have identified [imo] a very good long term investment.

    But, of course, timing is everything.
    A waiting game makes sense to me ... but don't wait too long.
     
  17. cramerica1972

    cramerica1972 Active Member

    what is a money call?
     
  18. Technical Alchemist

    Technical Alchemist forum leader won penny contest 13x won weekly contest 12x

    How long have you been long EWZ?

    I noticed it has turned up recently after a 7.25% pullback in the last two weeks. Does this look to be a new uptrend or just a good entry for a longterm holding?
     
  19. netwrangler

    netwrangler Well-Known Member

    I bought EWZ on 1/8/08.

    I had been long RIO and interested in PBR before that.
    I believe Aiki had mentioned EWZ as an investment vehicle for a friend of his, and that is what pushed me across the line.

    Right now I am long EWZ, but have some protective puts.
    This is a volatile security for an ETF. I'm trying to reduce my risk.

    All of this begs your question of how I view the near and medium term future of EWZ.
    No question, long term, I think this is a winner.
    That said, I haven't done enough Fundy and Tech analysis to be able to trade this issue.

    Maybe your question will inspire me to do so.
    It certainly appears to be tradable.
     
  20. cramerica1972

    cramerica1972 Active Member

    those of you that havent read my thread about the tax complications of EFT's.....please read it.
     

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