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Volatility is elevated as the S&P 500 stalls near historic highs, while the software industry is oddly not participating in the recent rebound.
It was another good day in the stock market today, as equities pushed higher in Friday morning trade. It's not hard to see that bulls are getting tired though, as equities faded off their opening highs.The SPDR S&P 500 ETF (NYSEARCA:SPY) fell 0.1%, the SPDR Dow Jones Industrial Average (NYSEARCA:DIA) rallied 0.1% and the PowerShares QQQ ETF (NASDAQ:QQQ) dropped 0.4%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe rebound in equities has been a continuous story line for investors over the past two weeks. And so have the disastrous developments of the WeWork IPO. What's Up With WeWork?WeWork is a real estate company that provides shared office spaces for startups and other businesses.The idea of WeWork is an excellent alternative to building and office leases, providing startups, potential clients and teams a rich collaborative environment. But that's not how investors are looking at it. In short, they don't trust WeWork.Earlier this year, SoftBank (OTCMKTS:SFTBY) threw money at WeWork, valuing the cash-burning entity at $47 billion after it invested $2 billion. Now? Reports of a continually lower IPO valuation keep circulating. The latest calls for a $10 billion IPO valuation -- a whopping 78% reduction from the valuation it garnered when SoftBank invested -- and that's after SoftBank said the company should shelve its IPO plans.It's just the latest example of another private-equity unicorn garnering a valuation way ahead of its skis and paying the piper in the public market. Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) paid the price right out the gate, and while it took some time, Slack (NYSE:WORK) is suffering too.Accord to WeWork's U.S. Securities and Exchange Commission Form S-1, the company reported sales of $436 million in 2016, $886 million in 2017 and $1.8 billion in 2018. That's pretty solid growth. However, operating losses have exploded. WeWork had operating losses of $396 million in 2016, $931.8 million in 2017 and $1.7 billion last year.In the first six month of 2019, WeWork has revenue of $1.5 billion and operating losses of $1.4 billion. How is this model sustainable? Further, its structure couldn't be more complicated. Have a look (again, from the S-1):Finally, co-founder and CEO Adam Neumann raises some red flags. For instance, by buying properties and then leasing them back to his own company. Or Neumann being a managing member of an LLC that owned the "We" trademark that then sold said trademark to WeWork when it rebranded as The We Company for a cool $5.9 million.I don't know Neumann personally -- obviously -- but what kind of founder-CEO does this type of stuff? There are 10 pages of disclosures on Neumann in the S-1, who has voting control via a three-class share structure. In June, three former executives launched a lawsuit against We ranging from sexual harassment to age discrimination.Lastly, We saw its lease obligations jump from $34 billion to $47 billion in the first six months of 2019. How's the company going to cover those obligations as its operating losses swell and without free cash flow? What's it going to do when -- not if -- a recession strikes, either in the U.S. or globally, or both?These are serious questions that need serious answers. I'm not trying to dog on We, but man, you do not see a pre-IPO show turn into a circus act with a near-80% haircut in valuation without there being some serious flaws.If this company ultimately goes public, be sure to do your due diligence. Movers in the Stock Market TodayOne IPO that's not disappointing investors -- like SmileDirectClub (NASDAQ:SDC) on Thursday -- is Cloudflare (NYSE:NET). Shares jumped 20% on the day, closing at $18. Despite pricing at $15 per share, well above its original $12-$14 range, shares still found a bevy of buyers on Friday.Apple (NASDAQ:AAPL) stock sank 1.9% on Friday, after enjoying strong gains for most of the week. Despite rallying after unveiling its new iPhone, streaming plans and other products on Tuesday, not everyone is on board.One Rosenblatt analyst sees lower demand for the iPhone 11 and argues that sales could disappoint. He has a "sell" rating and Street-low $150 price target. Another analyst from Goldman Sachs says that Apple's plan to offer one year of Apple TV+ for free when customers purchase certain new devices could have a "material negative impact."Finally, one last analyst take is on Disney (NYSE:DIS). Remember, Disney, Netflix (NASDAQ:NFLX) and Roku (NASDAQ:ROKU) all fell when Apple announced its new streaming product.However, analysts at Cowen noted that Disney's strength at the box office this year could make for a very difficult comp next year. To be honest, it's hard to argue that point, but Cowen must still be optimistic, maintaining a $154 price target.Next week we'll hear from the Federal Reserve. Not more than a few weeks ago, the market was pricing in a 100% probability of at least one rate cut. Even on Thursday, the odds stood at about an 89% probability of a rate cut and an 11% chance of no cut. On Friday, the odds of no cut jumped to 20.4%. Hmm.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long DIS and AAPL. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post Stock Market Today: Donat Get Me Started on the WeWork IPO appeared first on InvestorPlace.
The federal budget deficit has topped $1 trillion for the first time in seven years, the Treasury Department said. Expenses in August eclipsed incoming revenue by $214 billion this month, taking the government’s total shortfall to just under $1.07 trillion, the government reported Thursday. The growing deficit has also pushed up the national debt, the amount owed by the country to creditors to cover the difference between revenue and expenses.
Debt owed by governments, businesses, and households has shot up by almost 50% worldwide since the financial crisis, far outpacing economic growth.
The S&P 500 hesitated at historic highs. Micro caps have surged since September's start, with Chef's Warehouse breaking to new highs.
U.S. markets and stock exchange traded funds rallied Thursday after the European Central Bank revealed its intent to support the Eurozone economy and positive developments on U.S.-China trade. On Thursday, ...
The SPDR S&P 500 (NYSEARCA:SPY) hit new all-time highs on Thursday. Who would have predicted that for the stock market today?Not many were looking for such a robust rally to take place over the past few trading sessions. But InvestorPlace readers were ready. They knew that the stock market was trading in a well-defined range throughout the month of August and they knew when that range resolved to the upside.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOnce resistance gave way and we saw follow through from the bulls, that's when it was clear new highs were possible. In fact, we wrote: "Above resistance could send the S&P 500 back to 3,000, while a move below support likely brings up a test of the 200-day moving average."So what's causing this rally anyway? Markets liked the de-escalating tone between China and the U.S., even though there some reports say the trade war will not likely be resolved any time soon. More Quantitative Easing, Please?For those looking for more quantitative easing from the Federal Reserve, don't hold your breath. The Fed is scheduled to make its rate decision next week on Wednesday, Sept. 18. As it currently stands, the Fed Funds Rate is pricing in an 88.8% probability of a 25 basis point cut next week. The other 11.2% probability has the Fed keeping rates unchanged.Put simply, the U.S. is not in the economic position -- either with low growth or negative interest rates -- to warrant more stimulus. But the European Union is. * 10 Battered Tech Stocks to Buy Now The European Central Bank announced a 10-basis-point cut in its deposit rate to -0.5%, in-line with expectations. The ECB also announced that it will restart its QE program to the tune of $20 billion per month beginning Nov. 1. While ECB president Mario Draghi says there's only a low chance chance of an E.U. recession, those odds have increased.QE should be a boost, but it's concerning that it's needed after a near-decade of various policies. Movers in the Stock Market TodayIt was an exciting day in the stock market today, if not just because equities are flirting with their all-time highs. However, not all assets are moving favorably.While gold prices -- and the SPDR Gold Shares (NYSEARCA:GLD) -- closed higher on the day, GLD finished well off its morning highs. The can be said for bonds too, via the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT). The fall in bonds helped pave the way for bank stocks to continue their rally on Thursday, even as they approach resistance.The Top Stock Trades column took a closer look at the bank stocks earlier today.What else was moving?Aurora Cannabis (NYSE:ACB) fell roughly 10% and hovered near its session lows in the stock market today. The decline came after the company reported its quarterly results, missing revenue expectations and showing margin pressure. The woes of the cannabis space continue.Shares of General Electric (NYSE:GE) fell 1.2%, but Baker Hughes (NYSE:BHGE) was making waves after the former became a seller of the latter.BHGE opened notably lower on the day and fell to $21.36. However, it finished higher by 1.5% at $22.63 despite GE announcing it will cut its stake from 50.3% to roughly 39.5% as it looks to raise capital.The IPO market remains a mixed bag, with the latest shake-up coming from SmileDirectClub (NASDAQ:SDC). Shares priced at $23, above the $19-$22 range. But that didn't please investors, as shares tumbled 27.5% in their debut. Ouch. Heard on the StreetShares of Activision Blizzard (NASDAQ:ATVI) got off to a hot start in the stock market today. However, the stock only managed to climb 1% by the time the market closed. That's despite Nomura analysts upgrading the stock to "buy" and raising their price target from $49 all the way to $64. The target implies more than 16% upside from Wednesday's closing price.Wells Fargo analysts are ringing the bell on Caterpillar (NYSE:CAT) and Deere (NYSE:DE). They downgraded both stocks from "outperform" to "market perform," assigning price targets of $170 and $143, respectively.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post Stock Market Today: Should Investors Expect More Quantitative Easing?Â appeared first on InvestorPlace.
Below is a closer look at the Goldman's 5 key takeaways on this trend. While the drop in momentum stocks over the past two weeks was sharp, it simply unwound a robust rally that propelled these stocks upward by 17% for the month through Aug. 27. "The reversal in Momentum captured sharp rotations in other equity factors and sectors that had become increasingly correlated with each other," the report notes. Growth stocks and low volatility stocks also fell, while small caps and value stocks outperformed the broader market.
[Editor's note: "3 Different Ways for Newcomers to Buy S&P 500 Stocks" was previously published in July 2019. It has since been updated to include the most relevant information available.]If you're new to investing, one of the best ways you can dip your toe into the water is to buy a mutual fund or exchange-traded fund (ETF) that invests in all 505 of the S&P 500's stocks. Your first question: What is the S&P 500? Your second question: How come there are 505 stocks, not 500? Both are relatively painless questions to answer.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFirst, the S&P 500 represents 500 of the largest and most established companies listed on a U.S. stock exchange. You're likely familiar with many of the index's constituents. The S&P 500's largest company by market capitalization [share price multiplied by number of shares outstanding] is Microsoft (NASDAQ:MSFT) at $1.075 trillion. Warren Buffett, one of the most successful investors of all time, has said that most investors should simplify their investments to deliver better long-term returns. He put it this way in his 2013 annual letter to shareholders:"My advice [to the trustee] couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) …I believe the trust's long-term results from this policy will be superior to those attained by most investors -- whether pension funds, institutions or individuals -- who employ high-fee managers."Low costs and few moving parts win the game in the long run.The second question requires much less legwork. There are 505 stocks in the index because some of the companies, such as Buffett's Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B), have more than one class of shares, which means Berkshire Hathaway counts as two holdings, not one.Simple, right? * 7 Stocks to Buy With Over 20% Upside From Current Levels Now that I've answered the two questions, I better cut to the chase by providing readers with a short list of easy ways to buy S&P 500 stocks. Option No. 1: The SPDR S&P 500 ETF (SPY)Source: Shutterstock Launched in 1993, SPDR S&P 500 ETF (NYSEARCA:SPY) is the oldest ETF in the U.S. It also happens to be the biggest with $268 billion in assets. As you probably expected, it has 500 holdings, but you may be surprised to hear that the SPY ETF currently pays investors a dividend yield of 1.9% to hold it. And that's all for the expense ratio of 0.09%, or $9 per $10,000 invested per year.However, remember what Buffett said about low-cost funds. It's not the cheapest of the ETFs tracking the S&P 500, but it is the most popular. And it has stood the test of time. Option No. 2: Vanguard S&P 500 ETF (VOO)Source: Shutterstock Two of the next three largest U.S.-listed ETFs also invest in every one of the S&P 500 stocks -- the Vanguard S&P 500 ETF (NYSEARCA:VOO) has $115 billion in assets and charges 0.03%. This used to be 0.04%, until Vanguard cut the fees on three of its most popular products -- including the VOO ETF. * 7 Stocks to Buy In a Flat Market As Vanguard's literature points out, this fund is "more appropriate for long-term goals where your money's growth is essential." It makes a great base holding. Option No. 3: Buy Buffett's Stock (BRK.B)Source: Shutterstock Berkshire Hathaway has often been compared to a very large mutual fund because it owns $216 billion worth of publicly traded stocks, most of them part of the S&P 500.However, in addition to the equities, owners of the stock get a small piece of hundreds of private companies operating in all kinds of different sectors of the economy. The best part: Buffett won't charge investors annual fees to own his stock. He'll just deliver long-term returns that handily beat the S&P 500. From 1965 to 2017, Berkshire Hathaway stock's generated a compound annual growth rate of 20.5%, more than double the S&P 500. These three options plus mutual funds that track the S&P 500 index (they're slightly more expensive than ETFs) will get the job done while letting investors who buy them sleep easier at night. As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * Should You Buy, Sell, Or Hold These 7 Medical Cannabis Stocks? * 7 Strong Buy Stocks With Over 20% Upside * 7 Reasons Stock Buybacks Should Be Illegal The post 3 Different Ways for Newcomers to Buy S&P 500 Stocks appeared first on InvestorPlace.
It was another positive day on Wall Street, with stocks closing near their highs on Wednesday. Again, small-cap stocks stole the show in the stock market today.All week, we've been pointing out the outperformance of the Russell 2000. That strength was on display as the iShares Russell 2000 ETF (NYSEARCA:IWM) closed higher by 2%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat easily outpaced the SPDR S&P 500 ETF (NYSEARCA:SPY) and the SPDR Dow Jones Industrial Average (NYSEARCA:DIA), which rallied 0.7% and 0.9%, respectively. It also topped the 0.9% rally in the PowerShares QQQ ETF (NASDAQ:QQQ).The IWM is now up almost 5% just this week, easily topping the roughly 50 basis appreciation in the S&P 500. The ETF has also seen a few strong days of accumulation, causing some to wonder whether small caps are set to start closing that gap.While the IWM may be coming into some possible resistance, continued momentum could kick-start a breakout. Movers in the Stock Market TodayShares of Apple (NASDAQ:AAPL) barreled to their highest level in about a year, rising 3.2% to $223.59. The move comes on a two-fold catalyst. First, the company introduced its new iPhone and other products set to launch over the next few weeks. Second, the stock was on the cusp of a big breakout, which is taking place now.If only Zscaler (NASDAQ:ZS) could say the same thing. Shares were down 20% on the day, despite the company beating on earnings and revenue expectations. However, the midpoint of management's full-year guidance came up short of consensus estimates for both revenue and earnings. * 10 Stocks to Sell in Market-Cursed September Restoration Hardware (NYSE:RH) initially opened lower, but then jumped 4.8% to new highs. The move comes after the company reported yet another beat-and-raise quarter.Side note: RH and IWM are two stocks on Wednesday's Top Stock Trades column.Dave & Buster's Entertainment (NASDAQ:PLAY) shares fell more than 4% after the company reported earnings. The company beat on earnings, reported in-line revenue and missed on comp store sales results.GameStop (NYSE:GME) took it on the chin, falling more than 10% after the company missed on earnings and revenue estimates, and provided worse-than-expected guidance. The only seemingly good news is that shares rallied hard off the lows and did not make new 52-week lows.Another retailer that's struggling? Forever 21, which is expected to file for bankruptcy as early as this weekend. Heard on the StreetCisco Systems (NASDAQ:CSCO) climbed 1.7% and is looking to reclaim $50 after it was initiated with an "outperform" rating and $60 price target from the analysts at Evercore ISI.Hilton Worldwide Holdings (NYSE:HLT) jumped about 1.7% on the day, closing at $95.21. The move came after Bernstein analysts initiated shares with an "outperform" rating and $108 price target. It implies almost 14% upside from Wednesday's close.Finally, shares of Callaway Golf (NYSE:ELY) were upgraded to "outperform" at Raymond James. The analysts are using a $21 price target, implying more than 10% upside from current levels. That's even after the stock's nearly 26% rally so far this year and 5.5% rally on Wednesday.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell was long AAPL. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Stock Market Today: Small Caps Are Back?Â appeared first on InvestorPlace.
U.S. markets and stock ETFs climbed Wednesday as technology shares strengthened following Apple’s launch of its latest iPhones and as markets look to supportive central banks. On Wednesday, the Invesco ...
While many investment strategists see rising dangers for the economy and stocks, Goldman Sachs predicts that the bull market will charge ahead through the end of next year, with the S&P 500 Index (SPX) reaching 3,100 by the end of 2019 and 3,400 by the close of 2020, for respective gains of roughly 4% and 14% from today. Goldman believes that the U.S. economic expansion is far from over despite the impact of the U.S.-China trade war and slowing global economies. "Our economists expect that a US recession is unlikely during the next two years.
[Editor's note: "The 10 Best Index Funds to Buy and Hold" was previously published in August 2019. It has since been updated to include the most relevant information available.]Index funds are responsible for saving investors like you and me untold billions of dollars in fees over the past couple of decades. They've also spared us countless headaches. (I don't know about you, but I'm glad I don't have to pick specific stocks to buy to get exposure to utilities or play the growth in India's middle class.) And the best index funds … well, they've made us a lot of money, which is the point of it all.But index funds are also contributing to an issue that could blow up in our faces.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe push into index funds has intensified to the point that some experts believe it's not only driving the market higher, but it's causing a valuation bubble. In short, if you buy into any fund (index or not), the fund must invest that money into more stocks -- and all that buying is distorting valuations. The danger, then, is that when that bubble pops, many supposedly safe index funds will feel the pain worse than other parts of the market.The lesson here is that the best index funds to buy for the foreseeable future aren't all going to look the same. * Millennials Drive Big Investing Trends Some top index fund picks will be so buy-and-hold-oriented that you won't need to worry about the bubble popping in a year or two or three because you plan on holding for 20 years, maybe 30. Some of the best picks for next year will only be worth buying into for tactical trades of a week or two at a time.So the following is a list of the best index funds for everyone -- from long-term retirement-minded investors to click-happy day traders. And this includes a few funds that I either hold currently or have traded in the past.In no particular order … iShares Core S&P 500 ETF (IVV)Type: Large-Cap Equity Expenses: 0.04%, or $4 annually for every $10,000 invested.Every year, I take a look at the best index funds for investors, and the Vanguard S&P 500 ETF (NYSEARCA:VOO) is always at the top of my list.The argument is typically the same, and consists of two parts: * The S&P 500 Index is one of the best chances you have at solid investment performance. That's because most equity funds fail to beat the market, most hedge funds fail to beat the market, and, to quote Innovative Advisory Group, "individual investors as a group have no idea what they are doing." So if beating the market is so darned hard, just invest "in the market" and get the market's actual return. The VOO and two other exchange-traded funds allow you to do that. * The VOO is the cheapest way to invest in the S&P 500.But that second point has changed.In trying to position itself for advisers who may want to suggest the lowest-cost offerings, iShares parent BlackRock, Inc. (NYSE:BLK) lowered the fees on 15 of its Core-branded ETFs, including the S&P 500-tracking iShares Core S&P 500 ETF (NYSEARCA:IVV).Previously, the IVV charged seven basis points. It's better than the SPDR S&P 500 ETF's (NYSEARCA:SPY) 0.09%, but still above VOO's 0.03%. Now, though, IVV falls closest to the cellar at just 0.04% in annual fees. Thus, the recommendation stands. Buy the market for as cheap as you can, and right now, that's the IVV.And that note of caution? If the valuation bubble does pop, the S&P 500 and its components very well could be hit harder than many other blue-chip stocks outside the index. If you only have a few years left in your investment horizon, you should acknowledge this and invest (and monitor) accordingly. If your investment horizon is measured in decades, buy and never look back.Learn more about iShares' IVV here iShares Core S&P Mid-Cap ETF (IJH)Type: Mid-Cap Equity Expenses: 0.07%As I just said, it's difficult to beat the market. But the iShares Core S&P Mid-Cap ETF (NYSEARCA:IJH) is awfully, awfully darn good at it. From a total performance perspective, the IJH has beaten the IVV over a 15-year period.Source: Rachel Kramer via FlickrAnd yet, very few people talk about the IJH, just as very few people talk about the companies that make it tick, such as veterinary supplier Idexx Laboratories, Inc. (NASDAQ:IDXX).So … what's the deal?Mid-cap companies are frequently referred to as the market's "sweet spot." That's because, as Hennessy Funds describes in a whitepaper (PDF), they typically feature much more robust long-term growth potential than their large-cap brethren, but more financial stability, access to capital and managerial experience than their small-cap counterparts. * Millennials Drive Big Investing Trends The result:"Using standard deviation as a statistical measure of historical volatility, investors in mid-cap stocks have consistently been rewarded with lower risk relative to small-cap investors over the 1, 3, 5, 10, 15 and 20 years ended December 31, 2015. While mid-caps have historically exhibited higher standard deviation than large-caps, investors were compensated for this higher volatility with higher returns for the 10, 15 and 20 year periods."Ben Johnson, CFA, director of global ETF research for Morningstar, points out that "an investment in a dedicated mid-cap fund reduces the likelihood of overlap with existing large-cap allocations and stands to improve overall portfolio diversification."In other words, IJH is an outstanding fund, but don't consider it an S&P 500 replacement -- consider it an S&P 500 complement.Invest in both.Learn more about IJH here SPDR S&P Bank ETF (KBE)Type: Industry (Banking) Expenses: 0.35%Bank stocks have done very, very well in 2019, with solid year-to-date performances in stocks like Bank of America (NYSE:BAC) and Citigroup (NYSE:C) (up 19% and 32% respectively) leading the broad Financial Select Sector SPDR Fund (NYSEARCA:XLF) to a 17% gain since the start of 2019. This makes the SPDR S&P Bank ETF (NYSEARCA:KBE) especially attractive.Source: Mike Mozart via FlickrSince the end of Oct. 2016, the KBE has gained over 25% on the belief Trump will tear down Wall Street regulations, creating an environment that's much more conducive to bank profits.That was confirmed in late 2016, when Trump confirmed Steve Mnuchin as his pick for Treasury Department secretary, and Mnuchin was quick to say that "(stripping) back parts of Dodd-Frank that prevent banks from lending" was top on his list of priorities.Mnuchin said something else telling -- namely, that regional banks were the "engine of growth to small- and medium-sized businesses." I got a call from Chris Johnson of JRG Investment Group after that, and he quipped, "It's like he stared into the camera and winked at every regional bank and said, 'You're going to make money again.'"While XLF does hold banks, it also holds insurers and other types of financials. KBE is a more focused collection of dozens of banks, including national brands like Bank of America and smaller regionals like Montana-based Glacier Bancorp, Inc. (NASDAQ:GBCI), which is less than $3.5 billion by market cap. These stocks will not only benefit from any anti-regulation action but also future interest rate hikes.Learn more about SPDR's KBE here PowerShares Aerospace & Defense Portfolio (PPA)Type: Sector (Defense) Expenses: 0.60%The PowerShares Aerospace & Defense Portfolio (NYSEARCA:PPA) is one of two ideal ways to play the defense space broadly. The other is the iShares U.S. Aerospace & Defense ETF (NYSEARCA:ITA), and frankly, I think it's a toss-up between the pair. It just depends on what you're looking for.Source: Shutterstock Both are heavy in many of the same stocks, such as Boeing Co (NYSE:BA) and United Technologies Corporation (NYSE:UTX). The price advantage goes to the iShares fund, which is cheaper by 0.2 percentage points. However, PPA is a better choice if you're looking for more diversification. * Millennials Drive Big Investing Trends Defense stocks are clobbering the market, including more than doubling the S&P 500 since Trump got elected. This isn't a hidden trade. Frankly, I think new money should consider waiting for the next sizable market dip to knock some of the froth off before buying either of these ETFs.But defense will rule for the foreseeable future. Thus, PPA and ITA will, too.Learn more about PowerShares' PPA here. Global X SuperDividend Emerging Markets ETF (SDEM)Type: Emerging-Market Dividend Expenses: 0.65%The next four funds are dedicated yield plays, and we're starting with a pretty young (and aggressive) ETF -- the Global X SuperDividend Emerging Markets ETF (NYSEARCA:SDEM). But there are a few sound theories that could make this one of the best international plays.Source: Shutterstock Trump is widely considered to be a net negative for emerging markets because of his anti-trade, pro-U.S. rhetoric. But as Paul J. Lim and Carolyn Bigda at Fortune point out, the recent reactionary drought in EM stocks has brought their price-to-earnings ratios below their long-term average.The duo points out a number of other drivers, including … * Stimulated U.S. economic growth would benefit emerging markets who export to the West. * Commodity price pressure has eased, helping the many materials plays in EMs. * Higher oil prices should reduce the number of loan defaults in oil and gas, which will lift some of the worries about emerging markets' financial companies.All of that stands to benefit the SDEM, which has 23% of its holdings i nenergy and basic materials ) as its two heaviest sectors and invests heavily in commodity-focused markets including Brazil and Russia.SDEM does pose a bit of risk by intentionally investing in some of the highest yielders across a number of emerging markets -- as we all know, dividends can suggest financial stability, but excessively high dividends can be a symptom of troubled companies.But Global X views the high dividends as another factor of value (the reason yields are high is because the stocks are underappreciated), and it does mitigate this risk by equally weighting its 50 holdings upon every rebalancing.SDEM's monthly dividend yields 6.58%. That's still excellent for an emerging-markets fund, and the icing on the cake if the potential for an EM rebound is realized.Learn more about SDEM here PowerShares S&P 500 High Dividend Low Volatility Portfolio (SPHD)Type: U.S. Dividend Expenses: 0.3%If you're looking for dividend stocks without quite so much risk, the PowerShares S&P 500 High Dividend Low Volatility Portfolio (NYSEARCA:SPHD) is literally designed to provide you with just that.Source: Shutterstock The SPHD has a portfolio that seeks out dividends, not in risky emerging markets, but in the most stable high-yield blue chips the S&P 500 has to offer. To do this, the index takes the 75 highest-yielding constituents of the index, with a maximum of 10 stocks in any one particular sector, then takes the 51 stocks with the lowest 12-month volatility from the group.The result is a mostly boring group of stocks that are heavy in utilities (14%), energy (14%) and real estate (24%). * Millennials Drive Big Investing Trends The fund also uses a modified market cap-weighting scheme that provides a ton of balance. Even top holdings Iron Mountain (NYSE:IRM) and Macerich (NYSE:MAC) are just 3% of the fund apiece.The main purpose of a fund like SPHD is to create even returns and strong income -- something more in line of protection against a down market. But it has even managed to clobber SPY (and numerous dividend ETFs) in the past.SPHD is young, but it looks like one of the best index funds on the market.Learn more about SPHD here SPDR Bloomberg Barclays High Yield Bond ETF (JNK)Type: Junk Bond Expenses: 0.4%In late 2014, I picked the SPDR Bloomberg Barclays High-Yield Bond ETF (NYSEARCA:JNK) as one of the best index funds to buy for 2015, and JNK responded by dropping 13% that year and recovering to "only" a 9.8% decline in 2016. But this year, however, JNK is actually up 9%.That reflects the general idea behind buying JNK -- even in difficult times for junk bonds, a heavy yield can do a lot to offset capital losses, and then some.Invesco released a report showing that high-yield bonds like those held in JNK actually perform well in rising-rate environments (PDF). It starts:"Since 1987, there have been 16 quarters where yields on the 5-year Treasury note rose by 70 basis points or more. During 11 of those quarters high yield bonds demonstrated positive returns; during the five quarters where high yield bond returns were not positive, the asset class rebounded the following quarter."There's a number of reasons for this, such as an expanding economy normally being a boon for corporate debt service (lowering default rates), a lower relative duration rate of junk bonds and the boosting of returns via prepayment penalties by companies anxious to reduce or eliminate their debt before rates increase.Meanwhile, near-zero rates have helped keep down the rates on junk bonds, so right now JNK is yielding nearly 5.6% despite offering some of its lowest nominal payouts since inception in late 2007. Expect that to rise along with interest rates in coming years, which will provide outstanding annual returns from income alone to anyone with a long investment horizon.Learn more about SPDR's JNK here VanEck Vectors Preferred Securities ex Financials ETF (PFXF)Type: Preferred Stock Expenses: 0.4%*Another less-ballyhooed asset geared toward high income is preferred stocks. They're called "preferred" because the dividends on them actually take preference over common stock dividends.Source: Shutterstock Preferreds must be paid before commons are, and in the case of a suspension, many preferred stocks demand that the company pay all missed dividends in arrears before resuming dividends to common shares.And the "stocks" part of the moniker is a little misleading too, because they actually have a lot in common with bonds: * While preferred stock technically is equity, it typically doesn't include voting rights (like bonds). * Also, rather than a dividend that may fluctuate from payout to payout like a stock, preferreds have one fixed, usually high, payout amount that's assigned when the stock is issued (like bonds). * While common stock technically can register capital gains and losses, they tend to trade close to the par value assigned at issuance, which often is $25. So they might trade at a little discount or a little premium, but they don't fluctuate a lot. In other words: They have low volatility. * Millennials Drive Big Investing Trends While I have long been (and still am) invested in the iShares U.S. Preferred Stock ETF (NYSEARCA:PFF), my recommendation is the VanEck Vectors Preferred Securities ex Financials ETF (NYSEARCA:PFXF).The real draw of PFXF is its low 0.4% expense ratio, low volatility and 5.4% yield -- the best combination of the three in the space.*Includes an 8-basis-point fee waiverLearn more about VanEck's PFXF here Direxion Daily S&P Biotech Bull 3x Shares (LABU)Type: Leveraged Industry (Biotech) Expenses: 1.13%*While I'm long both pharmaceuticals via the Health Care Select Sector SPDR Fund (NYSEARCA:XLV) and biotechs via the SPDR S&P Biotech ETF (NYSEARCA:XBI), I think the best healthcare opportunity will be found by traders who tango with the Direxion Daily S&P Biotech Bull 3x Shares (NYSEARCA:LABU).Source: Shutterstock The LABU is a 3x leveraged index fund that aims to provide triple the daily returns of the S&P Biotechnology Select Industry Index -- the same index upon which XBI is based. Note the term "daily returns" -- the longer you hold onto leveraged funds, the more your returns can skew from the movement of the index.I think biotechs could still be in for a bumpy ride, as popular outcry over sky-high drug pricing isn't going away. Moreover, there's still the issue of pharmacy benefits managers (PBMs) increasingly siphoning pharmaceutical and biotechs' profits. But aggressive traders will get the most bang for their buck trying to play dips with tools like LABU, while fiscal hermit crabs like myself are content to sit in XBI and enjoy the uneven crawl higher.*Includes 12-basis-point fee waiver.Learn more about Direxion's LABU here Direxion Daily Gold Miners Index Bull and Bear 3x Shares (NUGT/DUST)Type: Leveraged Industry (Gold Mining) Expenses: 0.94%/1.04%*The last of the best index funds are actually a pair of funds that you can use to trade gold. (Sort of.)Source: Shutterstock The Direxion Daily Gold Miners Index Bull 3x Shares (NYSEARCA:NUGT) and Direxion Daily Gold Miners Index Bear 3x Shares (NYSEARCA:DUST) are actually leveraged plays on the NYSE Arca Gold Miners Index -- an index of gold mining companies that powers the VanEck Vectors Gold Miners ETF (NYSEARCA:GDX).Why gold miners?Gold miners have certain all-in costs of mining gold, and so they move heavily based on the price of the commodity. In fact, they tend to be more volatile than gold itself. Just take the first half of 2016, in which the SPDR Gold Trust (ETF) (NYSEARCA:GLD) returned a robust 25%. GDX doubled in that same time frame. And NUGT? NUGT returned 420% -- so, more than quadruple the GDX. * Millennials Drive Big Investing Trends But if you timed the play wrong, you were sunk. If you bought NUGT in May and held through the end of the month, you were down 40% to GDX's 14%.I have no doubt that 2019 will continue to provide a number of big drivers (in either direction) for gold, from U.S. dollar movements to interest rate moves to renewed Brexit fears. NUGT and DUST are two lucrative ways to profit off those trends.Just handle with care.*Includes a 9-basis-point fee waiver for NUGT and a 2-basis-point fee waiver for DUST.Learn more about NUGT & DUST hereAs of this writing, Kyle Woodley did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post The 10 Best Index Funds to Buy and Hold appeared first on InvestorPlace.
It was just another Tuesday at the Detroit office of Bright Trading on Sept. 11, 2001. The office, which was comprised of 25 traders from Michigan and Canada, were going through their pre-market rituals, studying charts and scouring the news to identify potential set-ups for the upcoming day. CNBC was blaring on the television, as it always was, when the first of two planes crashed into the World Trade Center at 8:46 a.m. We, as well as the late Mark Haynes, assumed it was a wayward pilot who lost his course and had inadvertently flown into the North Tower of the World Trade Center.