Archive for the ‘Schwab’ Category

Schwab: sectors

Tuesday, December 21st, 2010

The Charles Schwab site is rather big and complicated, and has gotten bigger and complicateder in the last few years. Sometimes, even customer service doesn’t quite know where to find things. For months, the site featured Credit Suisse’s Focus List under Research/Markets/Idea & Strategies. Then it disappeared, and four customer service discussions later, I still don’t know where it went.

Here’s a simple way to use the tools at Schwab that makes sense. Both Schwab and Ned Davis provide sector ratings, and all the ETFs associated with sectors are covered by MarketEdge’s technical indicators.

Currently, there three sectors that have a net positive rating from Schwab and Ned Davis. I gave a +1 for a positive rating, a 0 for neutral, and a -1 for a negative rating.

  • Energy +1 (Ned Davis)
  • Industrials +1 (Ned Davis)
  • Information Tech +2 (Both)

VGT (Vanguard Information Technology ETF) has a “Long/buy” rating from MarketEdge. Another way to go is the mutual fund BUFTX (Buffalo Science And Technology Fund), which is a no-load fund rated 4-stars by Morningstar. However, any mutual fund locks you in for 90 days on Schwab, unless you’re willing to pay a redemption fee. Both VGT and BUFTX are up about 4% since 11/22 (same as the broader market), when Ned Davis switched its rating to positive.

There are some net negative sectors also, but no unanimity:

  • Consumer staples -1 (Ned Davis)
  • Financials -1 (Schwab)
  • Telecom -1 (Ned Davis).

Health care and materials are “battlegrounds”–they have conflicting positive and negative ratings, but no neutral ratings.