Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

ETF Plays If CEOs Win Over Washington

Fri, Oct 26, 9:35 AM ET, by Michael Johnston

Late Wednesday night, the Chief Executives from more than 80 different mega-U.S. corporations came together to tackle a seemingly impossible task – call the Congress to action, specifically to reduce the astronomical federal deficit. The campaign, aptly dubbed “Fix the Debt,” aims to pressure Washington to push forward a simple, yet economically sound fiscal plan; raise tax revenues and cut spending. Is it possible that Wall Street is actually supporting a plan that sounds strikingly similar to Mr. Obama’s proposal? Has the ultimate business man Romney lost one of his biggest supporters? Not quite. A closer look at Fix the Debt’s proposal reveals that Wall Street’s CEOs have quite a different plan in mind. Remember, the devil is in the details [see 101 ETF Lessons Every Advisor Should Learn].

First, and foremost, CEOs who signed the manifesto make it crystal clear that tax increases are inevitable, no matter which candidate takes home the victory come November. Mark Bertolini, CEO of Aetna, pointed out, ”There is no possible way; you can do the arithmetic a million different ways (to avoid raising taxes). You can’t tax your way to fix this problem, and you can’t cut entitlements enough to fix this problem.” But unlike Obama’s plan, the crafty CEOs do not endorse only raising marginal income-tax rates for the top 2% of taxpayers. Instead they propose an overhaul of the tax policy (which Romney also endorses) in an effort to create a compromise between the two sides of the political spectrum.

A Mixed Bag of “Fix The Debt” Economics

While no specific plan has been laid out, the CEOs pointed out several steps they think the Congress should take:

Reform Medicare and Medicaid, improve efficiency in the overall health care system and limit future cost growth;

Strengthen Social Security, so that it is solvent and will be there for future beneficiaries; and

Include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit.

The CEOs’ statement went on to say that the infamous bipartisan Simpson-Bowles Commission – which deemed that every $3 in spending cuts should be coupled with a $1 tax increase - should be used as an “effective framework” for this new fiscal policy. The emphasis here is that there needs to be a well-defined balance between tax hikes and spending cuts, with the emphasis, of course, on more aggressive budget cuts to quell the uproar that would inevitably happen if there were only tax increases on the ultra-rich [see also Third Time's A Charm? Best ETF Plays For QE3].

From Wall Street To Washington: ETFs To Play

Should the CEOs of Wall Street successfully convince Congress to make a bipartisan fiscal policy that would effectively cut down our nations debt, investors will want to keep an eye on several asset classes that could be impacted by such a monumental plan [see Free Report: How To Pick The Right ETF Every Time]:

  • U.S. Treasuries: This, of course, is an obvious pick, but it’s an important one. If the Congress is able to reduce the federal deficit, demand for U.S. Treasuries would surge since investors would be willing to pay a higher price tag for the debt of a nation that is essentially cash-flow positive. There are roughly 52 Treasury-specific ETFs available on the market that span across a wide array of maturities and positions, including the short-term SHY and the leveraged LBND.
  • U.S. Dollar: Following a similar thought process, the U.S. dollar would become much more valuable if our debt piles were substantially diminished. Whether or not this uptick would counteract the inevitable inflation that would come with the continuation of the Fed’s money-printing stimulus package is certainly debatable. A nice short-term option for bullish investors is the PowerShares DB US Dollar Index Bullish Fund (UUP) [see also King Dollar ETFdb Portfolio].
  • Precious Metals: Should Congress steer the economy away from the “fiscal cliff,” investors would likely shed their precious metals holdings, specifically position in everyone’s favorite safe haven – gold. Popular leveraged short gold ETFs include GLL, DZZ and DGZ.

Follow me on Twitter @DPylypczak

[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro]

Disclosure: No positions at time of writing.

Click here to read the original article on ETFdb.com.


SDI Glossary: "Bullish" Definition
SDI Glossary: "Debt" Definition
SDI Glossary: "price" Definition
SDI Glossary: "Economics" Definition
SDI Glossary: "ETFs" Definition
SDI Glossary: "the Fed" Definition
This Article's Word Cloud:   CEOs   Congress   Debt   Dollar   ETFdb   ETFs   Every   Obama   Romney   Should   Street   There   Treasuries   Wall   Washington   also   course   cuts   debt   deficit   different   emphasis   fiscal   future   gold   investors   leveraged   make   more   only   plan   policy   problem   proposal   quite   reduce   several   short   should   specific   specifically   spending   term   that   there   this   which   will   with   would

| More

Ryder System Takes Over #84 Spot From Applied Materials
Thu, Jan 29, 12:14 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

SPY, BA, MCD, GS: ETF Outflow Alert
Thu, Jan 29, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: SPY, BA, MCD, GS Exchange traded funds (ETFs) trade just ...

HDV, GE, MO, CSCO: ETF Inflow Alert
Thu, Jan 29, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: HDV, GE, MO, CSCO Exchange traded funds (ETFs) trade just ...

QUAL, IBM, V, GOOGL: ETF Inflow Alert
Thu, Jan 29, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: QUAL, IBM, V, GOOGL Exchange traded funds (ETFs) trade just ...

VHT, UNH, BMY, LLY: ETF Inflow Alert
Thu, Jan 29, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: VHT, UNH, BMY, LLY Exchange traded funds (ETFs) trade just ...

XLU, DUK, NEE, SO: Large Inflows Detected at ETF
Thu, Jan 29, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: XLU, DUK, NEE, SO Exchange traded funds (ETFs) trade just ...

AOA Makes Notable Cross Below Critical Moving Average
Thu, Jan 29, 11:24 AM ET, by ETF Channel

In trading on Thursday, shares of the iShares Aggressive Allocation ETF (AOA) crossed below their ...

TUR Crosses Below Key Moving Average Level
Thu, Jan 29, 11:24 AM ET, by ETF Channel

In trading on Thursday, shares of the iShares MSCI Turkey ETF (TUR) crossed below their ...

IYJ Crosses Below Key Moving Average Level
Thu, Jan 29, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the iShares U.S. Industrials ETF (IYJ) crossed below their ...

TYBS Crowded With Sellers
Thu, Jan 29, 10:54 AM ET, by ETF Channel

In trading on Thursday, shares of the Daily 20+ Year Treasury Bear 1x Shares ETF ...

Praxair Top Socially Responsible Dividend Stock With 2.3% Yield (PX)
Thu, Jan 29, 9:24 AM ET, by ETF Channel

Praxair, Inc. (PX) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, ...

UTX a Top 25 Dividend Giant With $4.31B Held By ETFs
Thu, Jan 29, 9:24 AM ET, by ETF Channel

United Technologies Corp. (UTX) has been named as a Top 25 ''Dividend Giant'' by ETF ...

First Trust Mega Cap AlphaDEX Fund (FMK) Shares Cross Below 200 DMA
Wed, Jan 28, 4:24 PM ET, by ETF Channel

In trading on Wednesday, shares of the First Trust Mega Cap AlphaDEX Fund ETF (FMK) ...

FYT Makes Notable Cross Below Critical Moving Average
Wed, Jan 28, 4:24 PM ET, by ETF Channel

In trading on Wednesday, shares of the First Trust Small Cap Value AlphaDEX Fund ETF ...

First Trust Large Cap Value AlphaDEX Fund Breaks Below 200-Day Moving Average - Notable for FTA
Wed, Jan 28, 4:24 PM ET, by ETF Channel

In trading on Wednesday, shares of the First Trust Large Cap Value AlphaDEX Fund ETF ...

SPDR Russell/Nomura Small Cap Japan (JSC) Shares Cross Above 200 DMA
Wed, Jan 28, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR Russell/Nomura Small Cap Japan ETF (JSC) crossed ...

SCJ Crosses Above Key Moving Average Level
Wed, Jan 28, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI Japan Small-Cap ETF (SCJ) crossed above ...

KRE, ISBC, NPBC, PVTB: ETF Outflow Alert
Wed, Jan 28, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: KRE, ISBC, NPBC, PVTB Exchange traded funds (ETFs) trade just ...

ACWX, INFY, BAM, IBN: ETF Outflow Alert
Wed, Jan 28, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: ACWX, INFY, BAM, IBN Exchange traded funds (ETFs) trade just ...

XLP, KO, PM, CVS: ETF Inflow Alert
Wed, Jan 28, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: XLP, KO, PM, CVS Exchange traded funds (ETFs) trade just ...

BND: Large Outflows Detected at ETF
Wed, Jan 28, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: BND Exchange traded funds (ETFs) trade just like stocks, but ...

First Trust Small Cap Value AlphaDEX Fund -- Insider Buying Index Registering 13.5%
Wed, Jan 28, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the First Trust Small Cap Value AlphaDEX ...

Why HCP is a Top 25 SAFE Dividend Stock (HCP)
Wed, Jan 28, 9:34 AM ET, by ETF Channel

HCP, Inc. (HCP) has been named to the Dividend Channel ''S.A.F.E. ...

Merck a Top Socially Responsible Dividend Stock With 2.9% Yield (MRK)
Wed, Jan 28, 9:34 AM ET, by ETF Channel

Merck & Co., Inc (MRK) has been named a Top Socially Responsible Dividend Stock by ...

Avery Dennison Achieves #18 Analyst Rank, Surpassing Stericycle
Tue, Jan 27, 12:14 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

MTK, CTSH, GLW, NFLX: ETF Inflow Alert
Tue, Jan 27, 11:54 AM ET, by ETF Channel

Symbols mentioned in this story: MTK, CTSH, GLW, NFLX Exchange traded funds (ETFs) trade just ...

VDE, KMI.WS, APC, PSX: Large Inflows Detected at ETF
Tue, Jan 27, 11:54 AM ET, by ETF Channel

Symbols mentioned in this story: VDE, KMI.WS, APC, PSX Exchange traded funds (ETFs) trade just ...

VUG, ACT, AGN, ESRX: ETF Inflow Alert
Tue, Jan 27, 11:54 AM ET, by ETF Channel

Symbols mentioned in this story: VUG, ACT, AGN, ESRX Exchange traded funds (ETFs) trade just ...

VDC, CL, COST, MDLZ: Large Inflows Detected at ETF
Tue, Jan 27, 11:54 AM ET, by ETF Channel

Symbols mentioned in this story: VDC, CL, COST, MDLZ Exchange traded funds (ETFs) trade just ...

Vanguard Large-Cap ETF Experiences Big Inflow
Tue, Jan 27, 11:54 AM ET, by ETF Channel

Symbols mentioned in this story: VV, MOS, BLL, NRG Exchange traded funds (ETFs) trade just ...

PRN Makes Notable Cross Below Critical Moving Average
Tue, Jan 27, 11:34 AM ET, by ETF Channel

In trading on Tuesday, shares of the PowerShares DWA Industrials Momentum Portfolio ETF (PRN) crossed ...

10.2% of FBT Holdings Seeing Recent Insider Buys
Tue, Jan 27, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the First Trust NYSE Arca Biotechnology Index ...

Kinder Morgan a Top 25 Dividend Giant With 4.26% Yield (KMI)
Tue, Jan 27, 8:54 AM ET, by ETF Channel

Kinder Morgan Inc. (KMI) has been named as a Top 25 ''Dividend Giant'' by ETF ...

PepsiCo a Top Ranked SAFE Dividend Stock With 2.7% Yield (PEP)
Tue, Jan 27, 8:54 AM ET, by ETF Channel

PepsiCo Inc. (PEP) has been named to the Dividend Channel ''S.A.F.E. ...

Procter & Gamble a Top Socially Responsible Dividend Stock With 2.9% Yield (PG)
Tue, Jan 27, 8:54 AM ET, by ETF Channel

Procter & Gamble Co. (PG) has been named a Top Socially Responsible Dividend Stock by ...

IPD Crosses Above Key Moving Average Level
Mon, Jan 26, 4:24 PM ET, by ETF Channel

In trading on Monday, shares of the SPDR S&P International Consumer Discretionary Sector ETF (IPD) ...

SPDR Russell Small Cap Completeness Breaks Above 200-Day Moving Average - Bullish for RSCO
Mon, Jan 26, 4:24 PM ET, by ETF Channel

In trading on Monday, shares of the SPDR Russell Small Cap Completeness ETF (RSCO) crossed ...

UCD Crowded With Sellers
Mon, Jan 26, 4:24 PM ET, by ETF Channel

In trading on Monday, shares of the ProShares Ultra Bloomberg Commodity ETF (UCD) entered into ...

EWJ Makes Bullish Cross Above Critical Moving Average
Mon, Jan 26, 4:24 PM ET, by ETF Channel

In trading on Monday, shares of the iShares MSCI Japan ETF (EWJ) crossed above their ...

SPLV, MAC, VNO, TRV: ETF Inflow Alert
Mon, Jan 26, 12:14 PM ET, by ETF Channel

Symbols mentioned in this story: SPLV, MAC, VNO, TRV Exchange traded funds (ETFs) trade just ...

CVY, PDI, HIMX, PCI: Large Outflows Detected at ETF
Mon, Jan 26, 12:14 PM ET, by ETF Channel

Symbols mentioned in this story: CVY, PDI, HIMX, PCI Exchange traded funds (ETFs) trade just ...

Japan Hedged Equity Fund (DXJ) Shares Cross Above 200 DMA
Mon, Jan 26, 11:24 AM ET, by ETF Channel

In trading on Monday, shares of the Japan Hedged Equity Fund ETF (DXJ) crossed above ...

BWZ Crosses Critical Technical Indicator
Mon, Jan 26, 11:24 AM ET, by ETF Channel

In trading on Monday, shares of the SPDR Barclays Short Term International Treasury Bond ETF ...

CUT Makes Bullish Cross Above Critical Moving Average
Mon, Jan 26, 11:14 AM ET, by ETF Channel

In trading on Monday, shares of the Guggenheim Timber ETF (CUT) crossed above their 200 ...

16.1% of DIV Holdings Seeing Recent Insider Buys
Mon, Jan 26, 9:34 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SuperDividend U.S. ETF (DIV) shows an ...

MMM a Top Socially Responsible Dividend Stock With 2.5% Yield (MMM)
Mon, Jan 26, 9:14 AM ET, by ETF Channel

3M Co (MMM) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, ...

NUGT: Large Outflows Detected at ETF
Fri, Jan 23, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: NUGT Exchange traded funds (ETFs) trade just like stocks, but ...

SLV: ETF Outflow Alert
Fri, Jan 23, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: SLV Exchange traded funds (ETFs) trade just like stocks, but ...

MDY, EQIX, O, AAP: ETF Outflow Alert
Fri, Jan 23, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: MDY, EQIX, O, AAP Exchange traded funds (ETFs) trade just ...

UCO: Large Inflows Detected at ETF
Fri, Jan 23, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: UCO Exchange traded funds (ETFs) trade just like stocks, but ...

Related videos | all videos »
  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

ETF Plays If CEOs Win Over Washington | Self Directed Investor | Copyright © 2008 - 2015, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of over 1000 individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.