Micro and Macro Investing Using ETFs

Most people wouldn’t think that investors could use Exchange Traded Funds to invest from both a macro standpoint and from a micro point of view, but due to the increasing number of ETFs now available to investors, this is possible.

First off, what is micro or macro investing?

Macro investing is when you take high-level data points and base your investment strategy on that information. A few examples of high-level data points would be gross domestic product, unemployment stats, US Home Sales stats, current interest rates, consumer confidence, business confidence, the purchasing manager's index, and so on. These data points highlight certain aspects of the economy from the ten-thousand-foot level. The macro picture will tell you how an economy is doing from a very general aspect.

The opposite side of that is micro investing or taking information from much smaller sample sizes and making investment decisions based on that information. A microdata point could be something as small as Apple’s (AAPL) revenue from their most recent earnings report or Amazon.com’s (AMZN) number of Prime Members subscribers. This very small, very direct and specific information will not tell you how the overall US economy is doing, but it would give you a better idea about how Apple or Amazon are faring as opposed to just knowing that the US GDP grew by 3.0% last quarter.

So how would you take macro investment data and put it to use with ETFs? Continue reading "Micro and Macro Investing Using ETFs"

Best January In 32 Years! Is It A Sign Of How 2019 Plays Out?

After having the worst December in more than 87 years, the markets bounced back in January, gaining 7.9% in the month and the best January the market has experienced since 1987. This follows last January when the S&P 500 increased by 5.6%, which at the time was the best January the index had seen since 1997.

Historically when the market finishes January in the black, the market finishes higher for the year. Since 1928 when the market is up in January, it has finished the year higher 71% of the time. On a smaller timeframe say since 1950, when the market ends January higher, it has ended the year higher 85% of the time or 58 out of 68 times.

Now maybe your thinking to yourself that in 2018 the market was higher in January but ended the year in the red, down 6.2%. Well since 1980, we have not seen consecutive years in which the market end January higher, but finished the year in the red. Continue reading "Best January In 32 Years! Is It A Sign Of How 2019 Plays Out?"