 |
Markets
This Week |
|
|
| |
|
Investment
Idea
Quiz
Our Portfolio
Market Highlights
S&P 500 Charts
TSX Canada Charts
Behavioral Finance Indicators
Answer to the Quiz
|
|
Q: How can I invest in the green energy that supports sustainable
development?
A: The green sector includes firms involved in solar, wind,
water, fuel cells, micro turbines, battery storage, etc.
These following two indexes consist of companies that support
sustainable environment: WilderHill Clean Energy Index (symbol
ECO) and WilderHill New Energy Global Innovation Index (symbol
NEX). More information about them can be found by entering the
symbols on the American Stock Exchange website www.amex.com
It appears that investing in green energy could not only be
altruistic but also profitable. Last year, the heavy-weight
Goldman Sachs, one of the biggest investment banks in the world,
decided it was going green with $1 billion investment in renewable
and energy efficiency.
|
| |
|
|
|
|
|
(%)
Since inception on October 31, 2005,
S&P 500 has outperformed our passive 60/40 portfolio by 1.48%.
Still, our portfolio realized a lower volatility and a respectable
5.35% return over four months.
The 60% equities and 40% bonds portfolio is typical for a conservative
investor. The diversified portfolio (i.e. equities and bonds)
will produce the optimal combination of high return and a lower
volatility but it will lag behind a pure equity index when the
stock market moves strongly up.
|
|
|
- Feb 18 - Feb 24, 2006
- The equity markets attempted to pass the resistance level
set on January 11, 2006. Thus far, the barrier holds and we
continue to believe that it will. However, investing is not
about being right so if we are wrong, we will admit it swiftly
and move on.
- French and Italian confidence indexes climbed suggesting
European economic growth is accelerating from the recent slowdown.
Signs of faster growth underscore expectations that European
Central Bank will raise its benchmark 2.25 percent interest
rate next week.
- The US inflation in January jumped by 0.7% as energy prices
soared.
- The Chicago Board of Options Exchange (CBOE) has just started
trading
the first of its kind index of investor sentiment. The volatility
index
(symbol VIX) is a good gauge of volatility and fear (i.e. greater
volatility equals
more fear).
- Next week, as is typical for the beginning of a month,
will be full of interesting economic data as well as GDP and real estate numbers.
- During the recent economic forum in Davos, an economist
noted surprised lack of support for globalization. According
to the data, globalization adds $9,000 per year to an average
American family. Conversely, Mr. Frank, a Democratic member
of Congress observed that America has become a country of
excessive inequality. Hence, despite the economic gains from
globalization, real wages have been declining while corporate
profits and pay for the top 2% of the population have soared.
Your $$9,000 check may just be "in the mail".
|
| |
|
|
Charts 2 - 3. 10 Years and Last 10
Days
 
Charts courtesy of StockCharts.com
Charts 4 - 5. 10 Years and Last 10
Days
 
Charts courtesy of StockCharts.com
|
| |
|
|
(see
explanation)
The equities are attempting to break
the resistance set in the middle of January 2006. Based on our
indicators, there is a high probability that even if the stock
market breaks through the resistance level, it will not be able
to hold the gains. The situation resembles August 2005 in three
respects:
Chart 6 - divergence between prices (went up) and advancing/declining
line (flat)
Chart 7 - high degree of optimism by small investors as represented
by AAII
Chart 8 - confidence exhibited by equity option buyers who tend
to reliably wrong
at important market junctures
Charts courtesy of StockCharts.com
and DecisionPoint.com
|
|
|
C is correct.
Socially responsible investing (SRI) has its roots in 1960s activism. Currently,
there are funds for Christian Scientists (which don't invest in pharmaceuticals),
for Muslims (no banks, due to Islamic principles prohibiting the charging of
interest), and funds that screen for companies that deal with tobacco, alcohol,
weapons, and gambling.
The research indicates that SRI funds tend to slightly lag the market returns.
However, people investing in SRI funds believe it is important to invest in
companies that share their values and beliefs.
|
|
|
The contents of this publication are the property of InvestWELL Financial and may not be summarized,
reproduced, or rebroadcast in any fashion without our written permission.
InvestWELL Financial, as a provider
of independent and unbiased financial information, places its
first priority on educating our clients. Not only do we provide
practical information about securities, but we also coach our
clients to become successful independent investors. Given these
purposes, InvestWELL Financial does not take any responsibility
whatsoever for use of any information from the website or related
publications. Although all sources of information are vetted and
the information is believed to be reliable, it is not provided
as investment advice. Past performance is not an indicator of
future performance in securities. Each portfolio must be balanced
upon personal circumstances and high-risk investment decisions
should be made in consultation with a professional.
InvestWELL receives no commission or benefit of any kind from
the companies whose securities InvestWELL Financial showcases.
We do not necessarily own shares in the showcased securities,
but if we do, these shares are only held in the case of widely-held
and publicly distributed companies. There is no intention whatsoever
of profiting in a manner where price-impact of trading or holding
of a security might arise. The website and related publications
of InvestWELL Financial are intended to only be used for educational
purposes.
|
|
|
Thank you for reading Markets
This Week.
Please feel free to share it with your friends.
|
|
|
