Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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The Most Exciting Way to Play a Financial Rebound |
Published: June 23, 2008
Vanguard Financials
Exchange-traded Fund (AMEX: VFH, $41.65)
dives into nearly every corner of the financial universe. The
fund tracks the financial subset of the MSCI U.S. Investable
Market Index, a benchmark that captures 98% of the nation's
entire market capitalization. As such, shareholders will own a
piece of virtually all domestic financial companies -- some 512
in total.
Of course, as a market-cap weighted index, giants like Bank of
America (NYSE: BAC), AIG (NYSE: AIG), and Wachovia (NYSE: WB)
carry a heavier weighting -- the top ten holdings soak up just
over one-third of the portfolio. But that might be to the fund's
advantage, as these same companies have been some of the hardest
hit and should spring back sharply as conditions continue to
improve.
Like all Vanguard funds, VFH is also light in the pocketbook,
charging just 0.22% annually. That built-in advantage should
give the fund a pronounced edge. This ETF has outpaced more than
four-fifths of its rivals over the past three years -- posting
slightly negative returns over that time in an environment where many
have suffered steep losses.
Tax-conscious investors can also rest easy knowing the fund has
more than $7.00 per share in unrealized losses sitting on the
books, or about 16% of net asset value (NAV). Eventually, those
losses might be harvested (sold) to offset future gains,
minimizing or possibly even eliminating a tax bill for the time
being.
Because the fund leans heavily on large-cap U.S. banks without
the benefit of any overseas diversification, it hasn't had
anywhere to hide amid the recent turmoil. Thus, it has taken its
lumps over the past year -- sliding from the
upper $60s into the lower $40s.
However, that pullback has also given value-minded shareholders
an opportunity to act, and to lock in a respectable
dividend yield of 3.7%
-- which is more than
the payout on a 5-year Treasury.
VFH is a well-rounded,
cost-efficient way to play a rebound in the financial sector.
The fund offers concentrated exposure to influential firms like
Bank of America and Morgan Stanley (NYSE: MS), which play a vital role in a
healthy economy.
Keep in mind, these stocks are already well represented in other
domestic large-cap funds, so be careful of portfolio overlap.
However, as the Fed's most sweeping intervention in decades
continues to stabilize the credit markets and reassure investors
that the worst is behind us, it will be a good idea to be
overweight U.S. financial stocks -- and VFH owns them all. Good investing!
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Nathan Slaughter
Editor
The ETF Authority, Half-Priced Stocks
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in-depth guidance on today's leading exchange-traded funds (ETFs), plus
a proprietary ranking system designed to uncover today's most
profitable funds, please subscribe to
Nathan Slaughter's premium ETF investing newsletter -- The
ETF Authority |
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Investing Doesn't Get Any Easier Than This |
Stock picker Amy
Calistri's strategy is as simple as investing gets -- just one idea
a month designed to make money in today's market. Invest this way
and you don't have to worry about oil prices, automaker bailouts, or
what the Fed is up to -- because every "bad" economic development
actually helps some investment or another.Your investing life can
get a lot simpler -- starting today.
Go here to learn about Amy's simple investing strategy.
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