John Wasik

Four reasons to ignore market timing and focus on happiness

Aug 11, 2014 15:55 UTC

CHICAGO, Aug 11 (Reuters) – With global angst going up
several degrees, there are myriad reasons to feel nervous about
stocks. But that shouldn’t compel you into timing the market -
focus on your prosperity and happiness instead.

As University of Michigan researchers Justin Wolfers and
Betsey Stevenson have discovered in a study on economics and
happiness, there’s a strong link between higher incomes and
self-reported levels of life satisfaction and happiness. (Link
to study: bit.ly/1cg1Mj6)

While money is certainly not the only ingredient for a happy
and prosperous life, it can certainly smooth out a lot of the
rough edges.

Here are four reminders for why you should not let market
anxiety eat you up:

1. Stocks follow cycles, but most analysts are notoriously
awful at predicting when they begin and end.

Look at the year 1982, when the S&P 500 ended a 63 percent
down cycle that began in 1968 at the height of the Vietnam War
and widespread social unrest. In the early 1980s, Ronald Reagan
was president, the Federal Reserve was fiercely battling
inflation and few had stocks in their retirement plans.

Healthcare: A remedy for long-term investors

Aug 4, 2014 19:03 UTC

CHICAGO, Aug 4 (Reuters) – For healthcare, gray is the new

The fastest-growing segment of the global population is aged
60 and over, according to the United Nations Department of
Economic and Social Affairs. That slice of humanity is expected
to increase by 45 percent by 2050.

The surge in the older population has contributed to a wave
of new product introductions in biotechnology, medical devices
and pharmaceuticals, and expansion of healthcare services.

In addition, healthcare is a remarkably durable sector for
investors, soldiering on despite periodic market downturns, like
the one seen last week when the S&P 500 index had its worst week
since 2012.

These hot sectors may stay warm in the second half of 2014

Jul 28, 2014 17:26 UTC

CHICAGO, July 28 (Reuters) – With a relatively robust first
half for the U.S. stock market in the rear-view mirror, can you
expect hot sectors to continue their climb for the rest of this

The answer is “yes”, assuming the news is generally
positive, and barring any nasty geopolitical or economic
surprises. Although there are a few high-glamour stocks leading
the way, several sectors are relative dullards, yet still worth

One of the biggest winners in the first half were aluminum
stocks, up 55 percent through July 18, according to Standard &
Poor’s. While hardly on anybody’s list of sexy holdings,
aluminum is a basic metal widely used in vehicles, appliances
and aircraft.

Will you get burned by following the hot money in ETFs?

Jul 21, 2014 16:26 UTC

CHICAGO (Reuters) – All too often, I see investors heading in the wrong direction en masse. They buy stocks at the top of the market or bonds when interest rates are heading up.

Occasionally, though, active investors may be heading in the right direction. A case in point has been the flow of money into certain exchange-traded funds in the first half of this year.

Reflecting most hot money trends, billions of dollars moved because of headlines. The Energy Select SPDR exchange-traded fund, which I discussed three weeks ago, gathered more than $3 billion in assets in the first half, when crude oil prices climbed and demand for hydrocarbons remained high.

U.S. transportation stocks for the long haul

Jul 7, 2014 17:44 UTC

CHICAGO (Reuters) – As North Americans hit the highways, airports and rails for vacations this summer, it’s not hard to believe that some of the most robust stocks are in the transportation industry – particularly in an improving economy. Transportation stocks have proven to be long-haul winners and essential cogs in any growth portfolio.

Transportation company performance is generally a bellwether of an economy’s health. When consumer and industrial demand is rising, the greater the need to ship raw materials and finished products from various points of the globe.

On the retail side, a combination of higher demand and the conflict in Iraq ratcheted up U.S. gasoline prices to the highest level in six years this past Fourth of July weekend, according to the American Automobile Association. Despite the higher prices, some 35 million Americans hit the road during the holiday weekend for trips of 50 miles or more.

Finding a soft landing when bond prices fall

Jun 30, 2014 16:45 UTC

CHICAGO, June 30 (Reuters) – Contemplating the end of a
30-year bull run in bond prices is a bit like waiting to go to
the dentist for some long-needed procedure. You know it needs to
happen, but you procrastinate.

The end of the bond rally has been telegraphed for more than
a year, so it needn’t be painful if you prepare for it now.

Some of the conventional wisdom on avoiding all bonds except
for short-maturity issues may be flawed. There are alternatives
that can make sense while producing modest yield.

Energy scare good for oil stocks in the short term

Jun 23, 2014 17:10 UTC

CHICAGO (Reuters) – Despite the incendiary conflict in Iraq that last week sent the benchmark price of Brent crude oil to more than $115 a barrel, a nine-month high, U.S. stock markets largely shrugged off the oil threat, hitting record closing highs last week.

For investors, a new energy crisis in the Middle East presents something of an opportunity, albeit a fragile, short-term one.

Energy production has become much more geographically diverse, particularly in the United States. That lessens the severity of a Mideast production shortfall while boosting the long-term prospects of investment in fossil-fuel companies.

The score on Brazil as a long-term investment

Jun 16, 2014 15:07 UTC

CHICAGO (Reuters) – The beginning rounds of the World Cup have offered thrills to global soccer fans. But what should excite investors about Brazil?

The South American country is brimming with natural resources and growth possibilities. Despite concerns about its growth slowdown and its preparations for the upcoming Olympics, the country can be a good holding if global population growth remains on course.

There are more than a dozen exchange-traded funds (ETFs) that hold Brazilian stocks exclusively. They vary from broad-based index funds to specialized ETFs that use leverage to amplify market moves.

Finding wiser choices in smart beta funds

Jun 9, 2014 16:41 UTC

CHICAGO, June 9 (Reuters) – Ever since the dot-com crash
more than a decade ago, Wall Street and the mutual fund industry
have been on a relentless push to plug “smart” beta funds, also
known as “alternative” or “strategic beta” products. The funds
promise reasonable returns with lower risk by focusing on older,
steadier companies with consistent dividends.

But pursuing a smart-beta strategy isn’t as simple as just
buying a fund with that name and thinking it will outperform
conventional index funds. There’s always a trade-off in costs,
risk and return, so you need to dig much deeper to get beyond
simplistic marketing pitches.

For example, let’s say you were seeking an alternative
strategy and were sour on the 150 or so S&P 500 index funds on
the market that weight their stock holdings by the popularity or
market valuation of the stocks within the index.

What’s the best basket for global stocks?

Jun 2, 2014 15:49 UTC

CHICAGO (Reuters) – A stimulative monetary program in Europe and the U.S., combined with continued growth in Asia, are proving to be a potent trio for global investors.

But you have to be selective with mutual- and exchange-traded funds to ensure you have a broad basket for capturing global returns.

If you already have funds that represent the bulk of the U.S. stock market, you don’t need to duplicate those companies in a global portfolio. Funds that stipulate “ex-U.S.” – that is, they exclude U.S. stocks – can ensure you’re well positioned outside of America.