The October 2019 optimal portfolios are now available to subscribers of ETFMathGuy. So, please log in and select your discount broker to see the effect of current market conditions on our optimal portfolios. Here, we also summarize the market dynamics in the third quarter.
Third Quarter Market Summary
Today’s issue of the Wall Street Journal had several articles that nicely summarized the latest quarter for ETFs. Today, I discuss two articles. The first deals with investing in precious metals, and the second with preferred stock.
Precious Metals
The first article discusses the opportunity of investing in precious metals in a rate falling environment. The author points out that holding precious metals, like the popular gold ETF (ticker: GLD) or sliver ETF (ticker: SLV) don’t produce a yield like stock and bond ETFs. Then, the article goes on to suggest the “safe haven” aspect of precious metals may be driving their demand. The image below shows that the opportunity for large gains is possible, if investors are willing to accept a high degree of volatility.
Preferred stock
The second article discusses a hybrid stock-bond fund that tracks preferred stock. This investment has characteristics of both common stock and bonds, as seen by its performance shown below for a preferred stock ETF (ticker: PGX). Because the riskiness of preferred shared typically falls between stocks and bonds, it is not surprising its returns do too.
Conclusions
The financial markets continue to exhibit very dynamic behavior. But, ETFs continue to offer an opportunity to reach parts of the markets in a cost and tax efficient manner. So, we hope this article helps to inform your decision making when selecting ETFs.
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