The Tax Bill of ETFs and ETNs

With the tax deadline rapidly approaching, it is absoltuly essential that investors understand how their exchange traded funds (ETFs) and exchange traded notes (ETNs) will be taxed.

With the vast array of ETFs to choose from, taxes can get tricky. In general the tax treatment of ETFs is relatively simple and is applicable to long-term and short-term capital gains rules and rates. For example if one held the SPDY (SPY) for less than one year, any gains would be subject to short-term capital gains rates and if held for longer than one year, then the gains would be subject to long-term capital gains rates. Read more of this post

4 ETFs To Play Increased Economic Uncertainty

Last week numerous indicators enhanced economic uncertainty in the US, sending the Dow Jones Industrial Average to its longest streak in nearly seven years and all 10 of the S&P 500 Index groups down.

Enhanced economic uncertainty was primarily driven by three major forces.  The first was a decline in the Conference Board’s measure of consumer confidence.  For the month of May, the index dropped by nearly 7.9% from the month before reaching a six month low.  Furthermore, the Conference Board indicated that consumers remain overly pessimistic about the labor markets during the next six months.  Read more of this post

5 ETFs To Play Rising Prices

As the US government has resorted to excessive spending measures to keep the economy from completely crumbling, many investors suggest that inflation is inevitable and is likely to prevail in the near term future.

Current economic data suggest that inflation is relatively tame, but prices are on the rise.  In April, the Consumer Price Index, also known as the CPI, rose by 3.2 percent from a year earlier marking the fourth straight month of rising prices.  Furthermore, these increases in prices had already emerged in the retail sector as rising prices of cotton, wheat, sugar, crude oil and other raw materials have forced companies like Starbucks (SBUX), McDonalds (MCD) and Levi Strauss to raise prices and pass the impact through to the consumer.   Read more of this post

Precious Metal ETFs: Ultimate Guide

As economic uncertainty continues to prevail around the world and political instability takes its toll in North Africa and the Middle East, the appeal for gold and other precious metals is expected to continue to remain elevated, pushing up prices.

Gold has appeal for numerous reasons and will likely continue to be the “go-to” precious metal.  The shiny metal offers protection from inflation- a fear that many investors have, a hedge against a falling dollar and has long been a safe haven for Central Banks.   Additionally, a growing middle class in developing nations will likely support its demand.  Good ways to gain exposure to gold include the following: Read more of this post

Seven ETFs To Fight Inflation

Although current US economic data indicates that inflation is relatively subdued, there are numerous reasons to suggest that rising prices are on the horizon.

Rising commodity prices have already prevailed as demand for corn, wheat and soybeans around the world continues to outpace supply and political unrest has sent the price of WTI crude oil north of $109 per barrel.  Furthermore, inflation has already prevailed in much of the developing world causing the People’s Bank of China to increase its benchmark one-year lending rate to 6.31 percent and its one-year deposit rate to 3.25 percent.  A similar tune was heard in India, when its central bank raised the cost of borrowing for the eighth time in nearly one year.  Read more of this post

How Uncle Sam Treats ETFs and ETNs

As the timer to file one’s taxes continues to tick away, it is important to understand how exchange traded funds (ETFs) and exchange traded notes (ETNs) can increase or decrease Uncle Sam’s portion of the pie.

With the vast array of ETFs to choose from, taxes can get tricky.  In general the tax treatment of ETFs is relatively simple and is applicable to long-term and short-term capital gains rules and rates.  For example if one held the SPDY (SPY) for less than one year, any gains would be subject to short-term capital gains rates and if held for longer than one year, then the gains would be subject to long-term capital gains rates. Read more of this post

4 Reasons Gold ETFs Are Expected To Keep Luster

As gold continues to oscillate ahead and below the $1,400 per ounce mark, some suggest that the precious metal could be in a bubble, but there are four reasons the metal is likely to sustain its price levels in the near future.

First, gold continues to be the ultimate safe haven in times of uncertainty.  The US economy is showing signs of recovery, but at a slow and steady pace.  The most recent data that illustrates this is a report by the Labor Department which indicated that US employers added fewer than expected jobs last month and payroll counts increased by 103,000 last week as opposed to the 150,000 expected by analysts.  To put it into perspective, these numbers resulted in Federal Reserve Chairman, Ben Bernanke to state that it would take “four to five more years” for the labor markets to completely heal. Read more of this post