/Long Term vs. Short Term

Long Term vs. Short Term

Monday, January 14, 2019 –Stocks finished higher for the third straight week, with Small-Cap and International markets outperforming. For the week, the DJIA was up 562.79 points, the S&P 500 rose 64.32 points, while the NASDAQ Composite gained 232.62 points.

The market gains helped make the Russell 2000 Index the last major benchmark to emerge from bear market territory. Within the S&P 500 Index, Industrial shares performed best, helped by strength in railroads and a sharp rise in Boeing. Energy shares were also especially strong for much of the week as oil prices rallied, although they gave back a portion of their gains on Friday. Financials lagged and Health Care stocks also underperformed despite the news of another large merger in the sector—Eli Lilly’s proposed $8 billion acquisition of Loxo Oncology. Volatility continued to moderate, with the Cboe Volatility Index (VIX) hitting its lowest level in over a month, while higher-valued growth stocks outperformed slower-growing value shares.

Stocks have staged a healthy rally in the past two weeks, rewarding investors that stayed calm in the face of December’s panic. This highlights the importance of a longer-term perspective, as some of the market’s best days often come on the heels of its worst. For example, the late-December sell-off included the worst two-day decline (-4.8%) since 2015, which was followed the very next day by the best daily gain (+5.0%) since March 2009. We have now experienced four corrections (declines of 10% or more) in the past four years, directly in line with the average since 1900 of one correction per year.

It’s a reminder that despite the uncomfortable nature of market pullbacks, volatility is in fact a normal part of investing. Being a long-term investor does not require you to ignore shifts in the market, but it does require perspective and discipline. In General, stocks are now up 10.4% from their December lows, having recouped more than 40% of the total decline. Looking at the 10%-plus pullbacks since 2010, the market regained the entire drop in an average of 90 days. This is no guarantee that recent losses will be erased in such short order, but the rally over the past few weeks is a reminder that the decline in December may not be a one-way path toward a severe bear market.

ETFG Quant Movers – those ETFs who have had the largest weekly change in their respective, overall ETFG Quant ratings:
ETFG Quant Winners: Invesco S&P International Developed Momentum ETF (IDMO) took the number one spot up 14.95 points and a score of 54.38. iShares Edge MSCI Intl Size Factor ETF (ISZE) gained 13.78 points to end with a Quant score of 55.16. Invesco S&P 500 Minimum Variance ETF (SPMV) posted a solid gain in score moving up 13.65 points to a score of 55.93. Rounding out the Top Five were Oppenheimer Russell 1000 Quality Factor ETF (OQAL) and Dorsey Wright MLP Index ETN (BMLP) which rose 13.58 and 13.17 points respectively.
ETFG Quant Losers: This week’s biggest loser was Invesco S&P International Developed Low Volatility ETF (IDLV) dropping 10.68 points to a 50.56 Quant score. VictoryShares US EQ Income Enhanced Volatility ETF (CDC) fell 9.67 points to 40.01. VanEck Vectors Gaming ETF (BJK) declined 9.54 points to 41.21. iShares MSCI Italy ETF (EWI) moved down 9.49 points to 53.01. Ending out the bottom five is Invesco BLDRS Developed Markets 100 ADR Index Fund (ADRD) down 9.44 points to 45.97.
ETFG Weekly Select List – the five most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.

Because of the sectors success on the 1W Quant Rating of the ETFG Heat Map, we’d like to highlight some substantial movement in the Technology Sector when comparing this week’s Select List to last. SPDR FactSet Innovative Technology ETF (XITK)takes the number one spot as a newcomer, unranked last week. Dropping one spot down to second was last week’s top pick First Trust Nasdaq Semiconductor ETF (FTXL). Global X FinTech Thematic ETF (FINX), ALPS Disruptive Technologies ETF (DTEC) and iShares North American Tech-Multimedia Networking ETF (IGN) round out this week’s Technology Sector Select List. Keep an eye on our Weekly Select List for crucial insights as investors continue to turn to ETPs for portfolio diversification and security in these volatile markets.

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Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.
ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor’s currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.

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Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.

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This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor’s currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.

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