Investing

Congrats

Tone Deaf on ETFs

A couple of major announcements in the Exchange Traded Fund (ETF) world last week: State Street announced that they slashed the expense ratios on a ton of their ETFs and TD Ameritrade added a ton of ETFs to their ‘no-commission’ platform.  At first glance, this is great news.  Cheaper beta is available to more investors.  However, this is actually tone-deaf and a transparent money grab.  Hopefully, investors will show that they know better. Huh? State Street’s fee reductions are late in arriving.  Vanguard and iShares have been eating State Street’s lunch for years, in large part due to lower expenses.  Will investors flock to State Street now that it is the low-cost provider?  Perhaps the dumb ones will.  Investors who have money with Vanguard or iShares likely have huge gains.  Selling these positions to save a couple of basis points would be penny wise and pound foolish. While it is…

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News as drama

Three Trades Based on This Week’s Headlines

The two big news items this week are the French election and US tax reform.  There was also a big shakeup in the House of Mouse as Disney’s ESPN laid off a significant amount of on-air talent.  What’s the best way to trade this news?  If you read this blog with any regularity, you already know where this is going. French Election France’s establishment parties got the boot as nationalist Marine Le Pen and centrist Emmanuel Macron advanced through the first round of voting.  This continues a global trend of shaking up the political status quo.  As in other recent elections, volatility picked up before the election only to drop once the results were reported.  While Le Pen is seen as a populist wild card, Macron is expected to win handily in the next round.  Many expect Macron to add a stable presence to contrast President Trump’s boat-rocking. The trade: No…