ETR: The Stunning Power of ETFs

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Issue No. 3077 - $1.00	Thursday, August 12, 2010
Latest News Have you checked your inbox yet for that special message from Early to Rise? Today, we're presenting a video from our colleagues over at the Oxford Club. They have a new service... and the guy running it is red hot. One of his plays back in March returned over 700%. And he's had winners like that all year long (and the year before that). How does he do it? And how can you follow his success? First, tune out all the "noise" coming from the mainstream financial press. In fact, totally ignore it. And then let the OC's expert determine your next move based on just one key indicator. It's a system he's developed after an in-depth look at 107 years worth of market data. So if you haven't already, check your inbox for that message from us, click on the link and watch the video to check out his strategy in action. Don't wait, or you could miss out. The next wave of big winners is set to hit soon. -Jason Holland Managing Editor Early to Rise -----------------------------------------------------Highly Recommended----------------------------------------------------- Why Not Join Them? This November, aspiring entrepreneurs and successful business owners alike will flock to Delray Beach and our Info Marketing Conference. Your trip to Florida will be the best investment you ever make. I know that because of the responses we have gotten from past attendees -- like these: "Really incredible. The sort of information you can get at this seminar versus others is actionable and hugely doable. It's presented in such a fashion that you know how to implement it. I had been stymied and deadlocked, and that is finally over." - Rick Louis "The content is amazing. The speakers are amazing. You get everything you need to know to get online, and they teach you how to implement it. I secured five joint ventures while I was here. This is the best money you can possibly spend." - PJ McClure Start your own success story here. "If you don't follow the stock market, you are missing some amazing drama." Mark Cuban How to Exploit the Stunning Power of ETFs to Power Your Portfolio By John Nyaradi Every stockbroker in America is desperately hoping you won't discover what I know. And that is that Exchange Traded Funds (ETFs) shower investors with benefits that mutual funds simply can't provide. They offer you virtually unlimited investment flexibility... and you can buy them without paying your stockbroker one penny in commissions. ETFs have been around for more than 15 years. But although they've rapidly grown in popularity, most investors still don't understand how they can be used to supercharge their portfolios in both up and down markets. In a nutshell, an ETF is a basket of stocks that represents a sector. For instance, the iShares U.S. Sector Health Care ETF has major holdings in companies like Johnson & Johnson, Merck, Abbott Laboratories, Amgen, Bristol-Meyers, and Eli Lilly. With one transaction, you invest in a pool of securities, just like with a mutual fund, but the basket trades like an individual stock. The Wall Street Journal has called ETFs "one of the hottest investment tools to emerge in recent years." And Money Magazine has said that "ETFs are one of the few financial products that actually make money for you instead of your broker." There are more than 800 ETFs, with new ones opening every day -- and total assets invested in ETFs now top $800 billion! ETFs offer you exposure to major indexes (like the Dow and S&P 500), or you can use them to invest in sectors like real estate, financials, bonds, commodities, foreign currencies, and even sub-indexes like solar, steel, or coal. Plus, in recent years, "inverse" ETFs have been developed that give you the opportunity to make money when markets go down, while leveraged ETFs allow you to gain 2X and 3X exposure to various indexes and sectors. You can even use ETFs in sophisticated options strategies. How You Can Master Today's Tough Markets With its wild swings and the worst bear market since The Great Depression, it's no secret that today's stock market has challenged investors. But that doesn't mean you have to stick your money under the mattress. You have other options. Here are some recent real life examples from our Wall Street Sector Selector trading portfolios: When the market was climbing in first quarter 2010, we triggered a "buy" signal on February 24 that lasted until March 22. Our Standard Portfolio logged gains in ETFs like these: EWW (iShares Mexico Index): +5.9% XLY (SPDR Consumer Discretionary): +6.9% XLI (SPDR Industrials): +6.8% Then, on March 31, a "sell" signal fired and we and took up positions in ETFs that generated the following results: PSQ (ProShares Short QQQQ): +7.7% VXX (iPath S&P 500 VIX Short Term Futures): +50.3% EFZ (ProShares Short MSCI EAFE - Europe, Africa, and Far East): +2.8% During this same period, our 2X Leveraged Portfolio, focusing exclusively on leveraged ETFs, logged gains like +5.9% in EEV (ProShares Ultra Short Emerging Markets) while our Option Master Portfolio generated profits of +29.7% in less than three weeks and +10.8% in two trading days during the months of May and June. Of course, not every trade is going to be a winner. And it takes discipline, and even courage, to compete successfully in today's cutthroat markets. However, it's crystal clear that ETFs are extraordinarily powerful investment vehicles -- and they should be a major part of every investor's portfolio. A Laser-Like Focus on Exchange Traded Funds At Wall Street Sector Selector, we believe that ETFs are vastly superior to mutual funds, because: ETFs are far more cost-efficient than mutual funds. A typical mutual fund charges 1% or more annually, while ETFs average in the 0.10% to 0.6% range. The fees are lower, so your return automatically goes up. ETFs are far more tax-efficient than mutual funds. You only pay capital gains when you sell, unlike a mutual fund that is constantly rotating its underlying portfolio and giving your profits away in taxes. ETFs are far more liquid than mutual funds. They have no minimum holding period, no early redemption fees, and they trade during the day (like stocks), so you can open or close your position at any time. ETFs offer far more transparency than mutual funds. Anytime you want to know what your ETF is invested in, you can see its holdings -- instead of wondering what your mutual fund manager is doing because he doesn't have to report until the end of each quarter. ETFs let you invest in any sector in the world, be it domestic energy, the stock market in China, or the European equivalent of the S&P 500. Wherever opportunity lies, ETFs allow you to exploit it. Add up all these benefits, and it's easy to see why we chose ETFs from top providers as the exclusive trading vehicle for Wall Street Sector Selector. Everyday, we track more than 50 ETFs across more than 15 sectors. Here's a sample of the funds we track: iShares Emerging Markets iShares MSCI Hong Kong Index iShares MSCI Japan Index Fund iShares MSCI Malaysia Index Fund iShares MSCI Singapore Index Fund iShares MSCI Taiwan Index Fund iShares MSCI Mexico Index Fund iShares MSCI South Korea Index Fund iShares MSCI Brazil Index Fund iShares Dow Jones U.S. Insurance Index F iShares Dow Jones U.S. Utilities Sector iShares Lehman 7-10 Year Tres. Bond Fund iShares Dow Jones U.S. Oil & Gas Exploration iShares Dow Jones U.S. Oil Equipment & Services iShares S&P Latin American 40 Index iShares Dow Jones U.S. Aerospace & Defense iShares Dow Jones U.S. Home Construction iShares Dow Jones U.S. Consumer Cyclical iShares Dow Jones U.S. Energy Sector iShares Dow Jones U.S. Financial Sector iShares Dow Jones U.S. Healthcare iShares Dow Jones U.S. Industrial Sector iShares Dow Jones U.S. Consumer Non-Cyclical iShares Dow Jones U.S. Basic Materials iShares Dow Jones U.S. Real Estate Index iShares Dow Jones U.S. Transportation iShares Dow Jones U.S. Tech Sector Index iShares Dow Jones U.S. Telecom Sector Get "Best in Class" ETFs Delivered Straight to Your Inbox Wall Street Sector Selector rigorously screens the 50+ ETFs we track, and then selects the "best in class" that demonstrate the top opportunities for rapid fire gains in our Standard, 2X Leveraged, and Option Master Portfolios. So now, instead of searching across a universe of thousands of stocks and mutual funds, you can laser-target your investments in a simple and reliable ETF trading program. With the flexibility and diversification of ETFs, you can make today's volatility work for you instead of against you -- and have the chance to rack up profits whether the market is going up or down. Make no mistake. Today's markets are volatile and dangerous. But every danger comes with an equal opportunity. And, starting today, you can take advantage of all these possibilities through the awesome flexibility and unstoppable power of Exchange Traded Funds. [Ed. Note: John Nyaradi is publisher of Wall Street Sector Selector, an online newsletter specializing in sector rotation trading techniques and Exchange Traded Funds. He is also president of Ridgeline Media Group, LLC, and publishes a financial blog, Wall Street Sector Selector: Professional ETF Trading. Nyaradi's articles on investing have appeared in major online financial publications, including Dow Jones Market Watch, Trading Markets, The Money Show, Yahoo Finance, InvestorsInsight, Fidelity.com, Seeking Alpha, ETF Daily News, iStockAnalyst,and many others.He has also appeared as a guest on The Business Talk Radio Network. For more information on John's Wall Street Sector Selector program, go here. And for other "under-the-radar" investing tips and tricks, as well as the most lucrative wealth building and wealth saving opportunities available today, check out Early to Rise's Liberty Street League newsletter.] -----------------------------------------------------Highly Recommended ----------------------------------------------------- Who Ever Heard of Burning Cancer Out of Your Body? Can the cure for cancer really be as simple as heat? You'll be amazed by the simple but powerful health solutions found by our health research team. For example: A simple cure for heart disease that could eliminate the need for anyone to ever have bypass surgery again An amazing breakthrough that can make you look and feel up to 20 years younger A way to eliminate your "emotional" cravings for food But read on... because the craziest part is where our team found them... "One of the best experiences I've had." "I've got to tell you, this Bootcamp is one of the best experiences I've had. I've been in the direct-marketing arena for about 25 years, and I learned a tremendous amount just in the first two and a half days of attending this conference. All the presentations were absolutely fantastic." Lou Betancourt -----------------------------------------------------Highly Recommended----------------------------------------------------- Wouldn't You Love to Be In On That Conversation? Imagine stepping into a room filled with half a dozen of today's most successful business owners. Michael Masterson is sitting on a couch in the center of this high-profile group. (They are some of his closest friends and business associates.) Everyone appears to be simply chatting. But make no mistake... some of the hottest business deals, investments, and money-making strategies are being discussed. For example: The latest, hidden profit opportunity that could generate over $28,000 in just a couple of weeks... A real estate deal that could generate a 100% return (or more) within a few weeks... The "Great Diamond Hoax," with the potential to return 15% to 40% ROI with a single transaction And that's just a tiny taste of the kind of deals they're talking about. Now, you can be right there with them... The Language Perfectionist: Superfluous Words By Don Hauptman One of the basic principles of good writing is to omit unnecessary words. Conciseness beats verbosity. Consider these examples I recently encountered: "[Author James] Patterson considers himself as an entertainer, not a man of letters." The word as is dispensable here. Correct: "Patterson considers himself an entertainer...." "But I can't recall of an instance when [newspaper] book sections disappeared and book coverage was folded into other sections where the coverage expanded." The word of adds nothing to this sentence and can be deep-sixed. "Study Spanish for free with our online lessons, vocabulary games, and didactical contents developed by Spanish teachers." There's no doubt that the use of for free is commonplace. (A Google search for the phrase generates half a billion matches!) But the expression is slangy and the preposition is superfluous. Correct: "Study Spanish free...." Some language gurus suggest that at no cost, for nothing, or without charge can work better, depending on the context. Once acquired, colloquialisms such as those above become habitual and are difficult to extricate from one's vocabulary. In conversation, they may be forgivable. But make the effort to expunge them from your writing. [Ed Note: For more than three decades, Don Hauptman was an award-winning independent direct-response copywriter and creative consultant. He is author of The Versatile Freelancer, an e-book that shows writers and other creative professionals how to diversify their careers into speaking, consulting, training, and critiquing.] We want your feedback! Let us know your thoughts on today's issue. Email us at: AskETR@ETRFeedback.com
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