Ocean Portfolio at KaChing will be deleted

I will delete the Ocean Portfolio, TSP Portfolio and Trader Portfolio accounts from KaChing as a result of being forced to move to Facebook.

KaChing moved my portfolio to Facebook

I got the message from Kaching.com which they indicated that I can't no longer use their site to track my portfolio but instead they redirected me to Facebook. Personally I would not use Facebook for my portfolio tracking. I will figure how to track my portfolio in the next few days without KaChing. From their blog, I already saw a lot of unhappy users expressing their discontent comments.

Here is the message from KaChing:

"We are migrating your virtual portfolio to our Investing IQ App on Facebook.
In case you were not aware, kaChing has evolved into a marketplace where you can find great investors to emulate by mirroring their trades in your own kaChing brokerage account.
In order to avoid confusion between the marketplace and our virtual investing environment, we have decided to dedicate kaching.com solely to the marketplace and our Facebook app (now called the Investing IQ App) to virtual portfolios.
If you would like to continue to manage your virtual portfolio, then please click on the link below, which will migrate your virtual portfolio from kaching.com to Facebook.

Don't have a Facebook account yet? No problem. This link will allow you to create a Facebook account and immediately access your existing virtual portfolio.
Please email us at support@kaching.com if you have any questions.
Thanks,
The kaChing Team"

The Beauty of Weekly Charts

The beauty of using weekly chart is to eliminate the frustration of a single day or a few consecutive days of market volatile price movement. As the Dow dropped 104 points and S&P500 dropped more than 11 points yesterday, the weekly chart did not react as bad as it sounds. I would worry if it continued to drop in a few consecutive weeks as it did in early 2008. But until then, I would not do anything yet. As the chart shows below, the blue dots located at the top the price bars representing the 52-week closing high. There are more blue-dot bars than the non blue-dot bars in the last 4 months. So I will let the trend run until it shows sign of reversing before I consider doing some adjustment of the portfolio.

                                (click the chart to enlarge)

SPY weekly chart still shows sign of strength

A friend of mine who follows my blog and concerned about the markets may be pulling back in the near future. My answer to him was that if it happened then I will get out but I will not do anything until the charts tell me. I found that it is important to have a strategy on any investments and even more important to have a confidence to stick with the strategy and let the strategy aid your decision.

The SPY (S&P500 Index) weekly closed at 111.26 as of 12/04/2009. Its MA-4 is 109.88, MA-18 is 105.74 and MA-39 is 96.79. From observation, the general market still has strength to stay its course.

                                (click here to enlarge)

ETF Assests Hit A New Record in November

More cash from the sidelines had been poured back into the markets and ETF assets hit a new record in November. Here is the ETF Flows Report written by Matt Hougan of IndexUniverse

"Written by Matt Hougan  -  December 03, 2009 16:11 PM November ETF Assests Hit Record Levels

Related ETFs: EEM/IWM /LQD/SPY/SSO/TIP/UNG/UUP/VB/VWO

Investors poured $17.5 billion in new cash into exchange-traded funds and exchange-traded notes in November, according to new data released from the National Stock Exchange, pushing total assets under management in the U.S. to a new record of $752 billion. Year-to-date, investors have poured $89.7 billion in new cash into various exchange-traded products; down from $132 billion for the first 11 months of 2008, but a strong showing nonetheless. Most of the inflows were into ETFs, which gathered $17.1 billion, and now have $743 billion in assets under management. ETNs gained $354 million in new flows; combined with market returns, that brought their total AUM to $8.2 billion. Interestingly, Vanguard led all ETF issuers for inflows in November, pulling down $5.4 billion in new assets. BlackRock Global Investors was second, with $4.2 billion in assets, followed by State Street Global Advisors, at $3.7 billion. Inflows By Asset Class: Long-Only ETFs Inflows were seen in all major long-only asset classes save real estate in November. International equities led the way with $5 billion in inflows, followed by fixed income with $4.8 billion. Year-to-date, fixed income leads all comers, with $39.4 billion in inflows, followed by international equities and commodities at $29.3 billion and $28.8 billion, respectively. U.S. equity ETFs gained $3.6 billion in inflows in November, but have suffered a net $26.5 billion in net outflows so far this year."  Click here for more details.

ETF profits may result in higher taxes

Some ETF funds are taxed as an ordinary income-tax rates even if you hold it as a long-term investment. (more than 1 year and 1 day). Here is an interesting article:

By John Waggoner, USA TODAY (12/1/2009)

Investors in some exchange traded funds might be getting a little something extra this year: a bigger tax bill.

Profits from the vast majority of mutual funds get taxed at capital gains rates, just as profits from stocks and bonds. Long-term capital gains are taxed at a maximum 15%.

But long-term profits from funds that invest in gold or silver bullion are taxed at the same rate as gains from gold bars and other collectibles: 28%.

Stocks, mutual funds and collectibles must be held for a year or more to qualify for long-term rates. Otherwise, they're taxed as income at the same rate as wages – a maximum 35%.

The logic: Fund profits get taxed at the same rate as the underlying investment.

Just as gains from stock funds are treated the same as profits from the stocks themselves, profits from exotic ETFs are taxed the same as their investments.

Other tax surprises from ETFs: Click this link for more details

ETF dividends may confuse you at tax time

When it comes to tax time, you may wonder how ETF dividends will be filed. Here is an article from Matt Karntz of USA Today which it may give you some clearer answer.

"By Matt Krantz, USA TODAY (2/18/2009)

Q: Are the dividends from exchange-traded (ETF) funds like DIA or SPY considered to be "qualified dividends" for tax purposes?

A: There are two main types of dividends. And that difference becomes very important at tax time.

I'm oversimplifying things. But essentially, dividends paid out of earnings by U.S. corporations are considered so-called qualified dividends. These dividends are eligible for, or qualify for, a lower tax rate that matches your long-term capital gains tax. The maximum tax rate on qualified dividends is 15%, as you can read here.

If dividends aren't qualified, then they may be taxed at your ordinary income tax rate. That's generally higher than 15%, sometimes by a considerable amount. Click this link for more details"