New orders for durable goods rose by a healthy 4.2% last month, according to the U.S. Census Bureau, but the increase is marred by the ongoing drop in a widely monitored subset of these orders: business investment, defined as new orders for capital goods excluding aircraft and defense. Does the ongoing weakness in business investment tell us that we should ignore the otherwise encouraging news for broadly defined durable goods orders? If there are more clouds on the macro horizon than the top-line number suggests, what does that imply for the economy? In search of some perspective, let’s take a closer look at the numbers.
Daily Archives: August 24, 2012
Closet Indexing In The Age Of ETFs
Ian Salisbury at Marketwatch reminds us that some actively managed mutual funds may be loading up on ETFs. The preference to hold index funds in a portfolio that’s supposed to be a collection of individually chosen securities can be a warning sign that you’re paying actively managed fees for beta. Or in the parlance from the neighborhood of my youth, “You’re getting ripped off, bud.”