ETF short interest provides some great insights into what the market really thinks.

I’m going to ignore Matt’s twitter-length rebuttal of my last post, and instead point to an excellent set of data that just appeared in my inbox. State Street Global Advisors publishes (as many firms do) a monthly report on the ETF industry. What grabbed me this time was the short-interest report.

It should come as no surprise that ETFs are heavily shorted. After all, one of the great things about ETFs is that phrase “exchange-traded.” It means you can fold, twist and mutilate an ETF just like you can any other stock, and that means that if you can find it to borrow, you can short it. And since many ETFs are phenomenally liquid, they can be pretty easy to locate for shorting.

Overall, short interest in ETFs as reported on Oct. 15 was 11.84 percent. This is substantially

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With nearly $450 billion in assets and growing, exchange-traded funds may be ready for their turn in the spotlight. The number of ETFs has grown from 80 at the end of 2000 to 737 at the start of 2009. Although these investment vehicles have entered the mainstream, some investors may feel that ETFs are shrouded in mystery.

Yet once you demystify them and understand how they work, you will be in a better position to determine whether exchange-traded funds may be appropriate for your portfolio.

What Is an ETF?

Exchange-traded funds are unique investments that resemble mutual funds in some ways and behave like stock in other ways. ETFs are baskets of securities put together by investment companies. They are usually assembled to track an index, sector, or other group of stocks.

Individual shares of ETFs are similar to individual shares of stock in that they can be traded, causing prices of those shares

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Schwab’s new ETFs solve one critical problem in the ETF market, but they won’t take over the world. At least not for a while.

I’ve been thinking about the Schwab ETF launch all week, trying to figure out if it’s a game-changing event or an overblown bit of marketing. I think it’s a bit of both.

The big news, of course, is that Schwab is entering the ETF market and breaking new ground on fees. It has launched four ETFs that offer the lowest expense ratios in the world: As low as 0.08 percent for U.S. broad market exposure. The new Schwab Total Market ETF (NYSEArca: SCHB) and Schwab Large Cap Equity ETF (NYSEArca: SCHX) are now the lowest-cost mutual funds available to retail investors.

What’s more, Schwab is offering zero commissions for Schwab customers who buy or sell the ETFs.

That’s a big deal. Commissions are a huge hurdle

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By guest author Jim Nelson (http://pennysleuth.com/a-rare-second-chance-at-making-a-fortune/)

Today you have a rare “second chance” at making a fortune.

Let me explain…

From 1990 to 2004 the number of internet users in the US absolutely exploded — going from less than 1% of the population back in 1990 all the way up to over 65% in 2004.

And, as you know by now, the rapid increase in Internet usage spawned enormous growth in computer and internet-related companies. Microsoft went up 9,750%. Yahoo jumped a whopping 7,763% in just three and a half years. And AOL, the grand daddy of them all, went up 73,050%from its 1992 IPO to its peak at the end of 1999.

The trick was to identify the growth early. And to get out before the bubble burst.

Well today we’ve got a rare second chance to “turn back time.”

As investors and traders, it’s rare that we get any second chances. But when you’re …

by Jordan J. Weir

It has been consistently demonstrated that your investment returns aren’t so much a function of what stocks your invested in, but what sectors/asset classes your invested in. In the dot com boom, it didn’t matter what dot com stock you invested in, if you were invested in dot com companies, you probably did alright. During the dot com bust, it wasn’t just a couple select companies that went down, it was just about all of them. Because of this tendency for similar stocks to move together, it is much more productive to be able to simply buy ” or short – a type of stock, then try and nail the exact right company. But how can you gain exposure to a sector without taking unnecessary risk based on the company?

ETF. The latest all important acronym to add to your …

Ok, now I’m starting to get spooked.

Long-time readers know that I’ve frequently commented on the eerie similarities between how the financial markets behaved in 2008 and 2009. However, at this point, things are beginning to border on “conspiracy theorist.”

In both years, commodities bottomed first (Jan 23, 2008 vs. Feb 23 2009). In both years, the Feds stepped in with a major intervention in Feb/ March (Bear Stearns ’08 vs. Obama Stimulus ’09). This in turn kicked off a major rally in which both stocks and commodities soared higher together.

Both asset classes began to lose momentum in the early summer with the Baltic Dry Index peaking in late May ’08 vs early June ’09. Stocks and the Baltic then rolled over, falling into July:

June 1-August 5, 2008: Baltic collapses 28%

June 1-August 5, 2009: Baltic collapses 25%

Stocks first followed the Baltic, but then staged a massive reversal due to interventions/ short squeezes. …

With growth rates nonexistent in the United States and expectations for future growth muted due to ongoing debt levels and credit problems, investors have turned to other regions of the world to boost their portfolios.

China and the Asian Tiger countries have long been popular destinations to diversify portfolios.

But countries south of the border have also seen an emerging middle class and sometimes are overlooked on the world stage.

Buy Individual Companies or Buy a Basket

There are two ways to invest in Latin America: through individual companies that trade on the American exchanges or through a basket of companies in an exchange traded fund (ETF).

If you want to take the no hassle approach there are several ETFs available to capture the Latin American market.

You can buy a basket of companies from many countries in the iShares Latin America 40 ETF (

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By Guest Author: Tony Farrell (http://www.monthly-dividend-stocks.com)

Get my list of high yield monthly dividend stocks at http://www.monthly-dividend-stocks.com
My strategy: Research and discover all high yield monthly dividend payers, and start buying them up a whopping $ 200 or so worth at a time. WHAT?!?!? ARE YOU SERIOUS?!?!?!? Yes that’s right ONLY $ 200 each. If I had $ 20,000 to invest then I’d be acquiring about 96 positions at $ 200 each and paying the rest in trade commissions. Always get dividends paid in cash, make additional cash infusions when I can to accelerate the process, and use the cash to acquire more positions in other monthly dividend payers. Continue to buy more and more positions as enough cash becomes available, $ 200 or so at a time in each one, starting with higher risk / higher yield and working down to lower risk / lower yield (remember, time is on …

The full transcript of John Bogle’s recent webinar examining exchange-traded funds and the outlook for America’s investors.

 

As part of the festivities surrounding the 2009 Journal of Indexes editorial board meeting, IndexUniverse.com hosted a live webinar with Vanguard founder and index industry legend John Bogle.

During the one-hour presentation, Mr. Bogle unveiled new research regarding how successful (or not) investors are when trading exchange-traded funds, and took a big picture look at the state of American finance.

Moderated by JoI editor and IndexUniverse.com publisher Jim Wiandt, the webinar features an extensive audience Q&A session. A full transcript follows below.

Jim Wiandt, editor, Journal of Indexes (Wiandt): Good morning everyone, and welcome to a very special event that we have here today. We are actually at the NASDAQ market site and we have the Journal of Indexes editorial board meeting today.

We have

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Exchange-traded funds have enjoyed a rapidly growing popularity throughout the investing public, except among one key group: investors who are wary of the risks associated with equity investments.

Because the universe of exchange-traded funds, or ETFs, is expanding, several new bond-based ETFs have come on the market. At the end of 2008, there were 60 ETFs tracking bond indexes, up from six in 2006.1

If you avoided ETFs because they were predominantly composed of stocks, the growing availability of bond ETFs might warrant a second look.

Bonding with the Stock Exchange An ETF is a portfolio of securities that is assembled by an investment company and sold in shares that trade like stock. The investment company holds the underlying securities in trust and sells ownership of them in shares. The underlying securities typically track an index, a sector, or a group of securities that share a common thread.

The value of an ETF

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