ETFs and the Music of the Markets

What do exchange-traded funds (ETFs), music and the markets have in common? Well, aside from the fact that I happen to love them all, ETFs, music and the markets have a lot in common.

Here’s a little analogy to help illustrate my point.

Remember the 2004 biopic “Ray” starring Jamie Foxx in the lead role as Ray Charles? I suspect you may have seen it and, if you haven’t, I highly recommend it. Foxx won an Academy Award for his portrayal of the great singer, songwriter and pianist, and the film was a no-holds-barred look at Charles’ life.

In preparing for the film, Ray Charles sat down with Jamie Foxx, who also is a classically trained pianist, to play the piano together and exchange musical vibes.

Here’s how Foxx described the encounter in an interview with best-selling author and podcaster Tim Ferriss.

“As we’re playing, I’m on cloud nine. Then he [Ray Charles] moves into some intricate stuff, like Thelonious Monk. I was like, ‘Oh Sh*t, I gotta catch up’ and I hit a wrong note. He stopped because his ears are very sensitive: ‘Now, why the hell would you do that? Why you hit a note like that? That’s the wrong note, man.’ I said, ‘I’m sorry Mr. Charles,’ and he said, ‘Let me tell you something, brother. The notes are right underneath your fingers, baby. You just gotta take the time out to play the right notes. That’s life.’”

Wow, that is life indeed.

When applied to investing, we can say that the music of the market also dictates that we “take the time out to play the right notes.”

You see, the proliferation of ETFs over the years also has put the “right notes” underneath our fingers. In fact, today we can literally get portfolio exposure to just about any segment of the market by tapping on the computer keyboard that’s right underneath our fingers.

And while doing this right may be easier said than done, it can and is being done by all sorts of investors, worldwide.

Of course, the key to becoming a good musician, and to knowing the right notes to play, takes a whole lot of deliberate practice, knowledge and cultivated skill. It is the same way with investing.

Part of our mission here in the Weekly ETF Report is to help you acquire the knowledge and the skill to be able to play the right notes in your portfolio.

In the weeks to come, I will be showing you my techniques to help you identify the right notes when it comes to selecting winning ETFs for your portfolio.

Many of these techniques are at the heart of the proven, trend-following investment plan that’s helped investors preserve and grow their capital for over four decades in my Successful ETF Investing advisory service.

So, tune in next week for the second installment of ETFs and the Music of the Markets… I think you’ll find the melody quite pleasing.

3D printing refers to the process of creating three-dimensional objects. Theoretically, almost anything can be “printed,” ranging from a slice of pizza to electric cars.

PRNT is the first ETF to track an index composed of stocks that are directly involved in 3D printing and 3D-printing-related businesses. Those businesses include printing software, hardware, printing centers and scanners. The fund is roughly two-thirds invested in U.S. equities and one-third in overseas markets (mostly Europe), but could expand its holdings to several Taiwanese technology companies.

Drawing strength from the inherent push for technological advancement around the world, managers of PRNT are expecting 3D printing to revolutionize manufacturing. As the technologic basis for 3D printing gradually enters a more mature phase, some analysts estimate that 3D printing soon will appeal to a wider audience, which would be excellent news for PRNT.

In September 2016, General Electric (GE) spent $1.4 billion on two large acquisitions of 3D printing companies Arcam and SLM Solutions. GE also plans to bring 1,000 3D printing machines online over the next decade in a huge commitment.