ETFs, or Exchange Traded Funds, might be the most popular of all exchange-traded securities. (Image by Angelo_Giordano via Pixabay, CCO Creative Commons)
In my recent post on mutual funds, I noted that John Bogle disrupted that industry with Vanguard, a mutual fund company that specialized in low cost index funds designed to mimic rather than outperform major market indexes. The other mutual fund companies responded with their own index funds, and there is intense competition between them
Mutual fund shares vs. ETFs
Exchange Traded Funds, ETFs, are another refinement of the fund category. They will certainly figure into your reporting on the fund asset class because they are by some measures the most popular of all exchange traded securities.
For my primer on ETFs, see businessjournalism.org.
Numbers are funny things. Even though they appear to be absolute, a clever manipulator can twist them to make pretty much any point he wants to make. Take President Trump’s statement from February: “Ninety-four million Americans are out of the labor force.” It might seem preposterous but it is correct, as the great sage Obi-Wan-Kenobi once said, “from a certain point of view.”
It is the number you get if you take the total U.S. population 16-years of age and older and subtract the people the BLS says are in the labor force. That number includes everyone who is retired, and most high-school, college, graduate or vocational school student. It also includes the disabled, homemakers, some self-employed and those living off their investments.
My guide to reporting the employment report continues at businessjournalism.org….
The Bureau of Labor Statistics released its Employment Situation Report for February on March 10, showing a healthy 235,000 gain in payroll employment. Asked what President Trump thought about the numbers, White House press secretary Sean Spicer said, “I talked to the president prior to this, and he said to quote him very clearly,” Spicer said. “They may have been phony in the past, but it’s very real now.”
Many of the reporters present laughed. I cringed.
Over the years on public television’s Nightly Business Report, I filed countless “numbers” pieces. The monthly employment reports were most closely watched. For better or worse these reports often had an immediate financial market moving impact, making them lead stories for a market driven broadcast.
I cringed because I believe attempts to undermine the credibility of these reports do a great disservice.
Continues at businessjournalism.org….
Chicago Board Options Exchange
My series at the Reynold’s Center continues with thoughts on reporting the derivative markets. These are investment vehicles that are derived from others, appropriately called derivatives. Investors do not own the underlying asset, but bet on how that asset will perform.
Options are a common type of derivative. In 1973 the Chicago Board of Trade created the Chicago Board Options Exchange, which at first operated out of an old cloak room off the CBOT trading floor. The CBOE traded listed stock options. Unlike futures, options were not a commitment but gave the buyer an option to buy a stock for a certain period of time.* The option is based on the stock, called “the underlying.”
Continue at businessjournalism.org….
The latest in my series on financial market reporting is live at the Reynold’s Center:
Previous posts introduced the markets and the best-known investment vehicles, stocks and bonds. But even if you don’t own one of those investments, you probably have placed a considerable amount of money in a different asset class, although you may not consider these to be investments.
I’m referring to real assets, physical items, the “stuff” we accumulate throughout our life. If you’ve ever sold an item on eBay, you know what I mean. You might have sold a used item you’ve upgraded or outgrown. Or you could have sold a “collectable,” an item you bought in the belief that its value would grow over time (Beanie Babies, anyone?) These are “real” assets.
Continued at businessjournalism.org….
The day a company first sells stock shares to the public marks a right of passage. The initial public offering or IPO means the company is able to meet the long list of legal requirements that govern the trading of stock on a public exchange. It also means the company has been able to convince enough investors to buy the shares at a price that meets corporate fund-raising goals.
The lesson continues at the Reynolds Center…..
I did not go to witness the ceremony of remembrance at the 9-11 Memorial today. I am never comfortable when I am at the 16 acre site of the World Trade Center in Manhattan. It’s not the memories. Those come and go depending on what is going on in the world. It’s the images which lingered before me for months after that day. Now they almost never return. Unless I am at the site.
On September 11, 2001, my wife Amy and I lived in Battery Park City in lower Manhattan. We had moved there from midtown just a few months earlier. Our apartment building was at the south end of the neighborhood, south and west of WTC Tower #2. I was the New York Bureau Chief and Senior Correspondent for public television’s Nightly Business Report and the newsroom/production facility/broadcast studio was just across West Street, even closer to the tower, due south of the site. Tower #2 filled the window of my bedroom, and of my office.
I was putting on my tie when I heard a noise I later described as the sound of a dump truck unloading gravel at my feet. Running to the window, I saw smoke coming from the top of tower #1, the view partially obscured by #2, which was closer to me. I had been through the 1993 terrorist attack on the World Trade Center, so I did think of that. But I thought in terms of a bomb planted inside, or an explosion on one of the equipment floors toward the top of the building. It was 8:46am.