Question:
Is it time to buy ProShares UltraShort 20+ Year Treasury (ETF) (NYSEARCA: TBT)?
Answer:
This ETF seeks to double the inverse of the Barclays Capital 20+ Year U.S. Treasury Bond Index. By buying this, you are betting that interest rates are going to rise, as you are double-shorting the 20-year Treasury bond. This ETF is pure speculation. We consider this a trading vehicle, not an investment. This is not designed for the long-term investor. When we put money in bonds, we intend to earn interest on our investment. This ETF is merely betting on how interest rates will perform.
We have been waiting for five years for interest rates to rise. In fact, we expected interest rates to rise last year, and they didn’t. Accordingly, the ProShares UltraShort 20+ Year Treasury was down 51% last year.
Question:
What do you think of coal stocks such as ACI or ANR?
Answer:
Of the two, Arch Coal Inc. (NYSE: ACI) and Alpha Natural Resources, Inc. (NYSE: ANR), we prefer Arch Coal. It is one of the best in the coal business. However, with the price of natural gas down, coal is also down, because natural gas is a better alternative to coal. The United States has the largest supply of coal, and while we favor natural gas as our fuel of choice, the world is still interested in our coal. Long term, Arch Coal could make a good investment; however, in the short term, the stocks are getting beaten up by the market. Arch Coal also offers a good dividend yield at 3.6%. They produce a cleaner burning, low sulfur coal over Alpha Natural.
Question:
What do you think of telecom companies RIMM, or TEF or FTE, which seem to be priced cheaply—granted on the last two the areas ( Spain and France) are in a recession?
Answer:
Research In Motion (NASDAQ: RIMM) may be worthy of speculation, but as a long-term investment, its future is in doubt. Their new platform has received weak reviews, and the stock is trading below book value. We do not deem RIMM as a buy.
Both Telefonica S.A. (ADR) (NYSE: TEF) and France Telecom SA (ADR) (NYSE: FTE) provide telecommunication services in Europe. While they are American Depositary Receipts, which decreases the currency risk, the European dividends need to be considered. We are not fans of either company despite that they boast high dividend yields, at 8.9% and 11%, respectively. Dividends in Europe are based on earnings, so they fluctuate. As earnings decrease, so should the dividend.
Question:
Surprise, surprise AAPL is suddenly 5.3 percent of my accounts and growing. Even at only 100 shares it is going past the magic 5% number. Should I sell some even with the rumors of a large dividend on the horizon?
Answer:
It is our opinion that you should not sell Apple, Inc. (NASDAQ: AAPL) at this time. Apple is more than 4% of the S&P 500 Index, so you are not particularly overweighted. The general rule is that you do not want any one investment to constitute more than 10% of your portfolio. When a position becomes more than 5%, we generally consider trimming. However, at this time, we do not suggest selling Apple.
Disclosures:
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing.
