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Agenda for this Evening

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Agenda for this Evening

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  1. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION DISCUSSED DURING HAWKTRADE MEETINGS.  Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Investing in any financial instruments does not guarantee that an investor will make money, avoid losing capital, or indicate that the investment is risk-free. There are no absolute guarantees in investing. HAWKTRADE and its members do not bear any responsibility for losses or gains made by members trading on their personal accounts based on analysis from HAWKTRADE meetings.

  2. Agenda for this Evening • Dues • Competition • Elections • Last Weeks numbers • ETFs • Financials

  3. Dues • $15 for the entire year • There is no pro rate • Must pay after you have attended 4 meetings • $15 to enter semester long competition

  4. Competition • Starts the Monday after the 4th meeting. September 20th • Will last until the Friday before the last meeting of the semester.

  5. Executive Positions • President • Vice President • Director of Marketing • Director of Group Simulations • Director of Technology • Officer of External Affairs • Secretary

  6. Last Weeks Performance: DOW

  7. Basel III The Basel Committee on Banking Supervision provides a forum for regular cooperation on banking supervisory matters. Its objective is to enhance understanding of key supervisory issues and improve the quality of banking supervision worldwide New Policies could hurt smaller banks by requiring them to hold more capital New Policies court hurt big banks by increasing their liquidity ratios Good Video to Watch on Basel III: http://www.cnbc.com/id/15840232/?video=1588712200&play=1 http://www.bis.org/bcbs/

  8. Basel III • Will force banks to hold more capital • Banks will have to increase their minimum Tier 1 Capital Ratio • Tier 1 Capital • Basic capital reserve • Owners can’t choose to redeem this money http://www.cnbc.com/id/39132042

  9. China Data • Industrial Production Accelerated up to 13.9% • Retail Sales up 18.4% • Increased Investment in Factories 24.8% http://www.cnbc.com/id/39109590

  10. China Data • People were concerned with China overheating. • Report shows that China is taking more of a “soft landing” • CPI = 3.5% • This is a little higher than expected • Mostly due to rising food prices http://www.cnbc.com/id/39109590

  11. ETFs • ETF stands for Exchange Traded Fund • A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange *ticker symbols FAZ, TNA, SPY • ETFs experience price changes throughout the day as they are bought and sold

  12. ETFs • ETF stands for Exchange Traded Fund • A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange *ticker symbols FAZ, TNA, SPY • ETFs experience price changes throughout the day as they are bought and sold

  13. ETFs

  14. Dow Jones U.S. Industrial Sector Index Fund (IYJ)

  15. Dow Jones U.S. Industrial Sector Index Fund (IYJ)

  16. Benefits to holding ETFs • You get the diversification of an index fund *Generally less risk than buying into a single company • Ability to sell short, buy on margin and purchase as little as one share • Expense ratios for most ETFs are lower than those of the average mutual fund *Commission is similar to all other regular orders

  17. More Benefits • ETFs can provide easy access into different investing markets *Bonds , Currencies, International markets, Leveraged trading

  18. Who Manages these ETFs • Sponsors- The company or financial institution which creates and administers an exchange-traded fund. • Big Sponsors: ProShares, iShares, Direxion,Vanguard

  19. Popularity • Last July: Top 9 ETFs accounted for 18% of daily trading volume • SPY alone accounted for 10.34% of daily trading volume in July • Comparison: The top 6 largest companies only accounted for 10% of daily trading volume in July http://www.streetinsider.com/ETFs/Nine+ETFs+Dominate+18%25+Of+Daily+Trading+Volume+(SPY,+IWM,+QQQQ,+GLD,+more...)/5869740.html

  20. ETFs Examples • Currency: Euro (ULE, EUO) Yen (YCL, YCS) • Commodities: Dow Jones (CMD), Gold (GLL), Silver (ZSL) • International: China (PGJ, FXI), Emerging Markets (ADRE, FRN) • Leverage: FAZ, FAS, TNA, TZA,

  21. Terms • Bull/ Long – follows the market trends • Bear/ Short – Follows the market inversely

  22. Terms • Ultra/ Double – Leveraged 2:1. Attempt to double the returns of a benchmark • Triple/ 3x – Leveraged 3:1

  23. Leveraged ETFs • A leveraged ETF does not amplify the annual returns of an index; instead it follows the daily changes • For example, let's examine a leveraged fund with a 2:1 ratio. This means that each dollar of investor capital used is matched with an additional dollar of invested debt. If one day the underlying index returns 1%, the fund will theoretically return 2%.

  24. Airtime: Fri. May 14 2010 | 1:28 PM ET ETFs

  25. Airtime: Fri. Sept. 3 2010 | 9:27 AM ET Good Time to Buy into Financials?

  26. Top US Banks • Bank of America Merrill Lynch (BAC) • JP Morgan Chase (JPM) • CitiBank (C) • Wells Fargo (WFC) • US Bank Corp (USB) http://www.reuters.com/article/idUSN1011272020100910

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