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The Muscular Portfolios Newsletter — No. 18 — July 8, 2019
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Fresher ETF price data for you
 By Brian Livingston
One of the best features of the Muscular Portfolios website is our free data, showing which exchange-traded funds (ETFs) have the strongest odds of success in the coming 30 days. From now on, the price information you see in our tables will be much more timely, not delayed 20 minutes — a limitation of most free market-data sites.
The improvement in freshness is thanks to ETFScreen, a website that provides data analysis to Muscular Portfolios. The service recently switched its data feed to IEX Cloud, a new provider that's making waves in the financial-services industry.
An example of the data you'll see on our Mama Bear Portfolio page is shown below in Figure 1. (Similar data appears on the Papa Bear and Baby Bear pages.)
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Figure 1. ETF price data is now more up-to-the-minute. However, bid-ask spread information is still delayed about 20 minutes. IMPORTANT: The numbers shown here represent OLD data; check the website for today's data.
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The gain and price columns are less than five minutes old when you first open the Web page or refresh it. This data was previously delayed 20 minutes or more. Up-to-the-second numbers are not at all important for Muscular Portfolios — the three top-ranked ETFs can remain the same for weeks or months. But ETFScreen upgraded its timeliness for its other users, so we long-term investors now get to see our specific data with less of a delay than before.
The bid-ask spread column still displays a percentage that is at least 20 minutes delayed. This slight delay makes even less difference to long-term investors. The site provides the spreads only to show you whether a "flash crash" is currently happening. If so, the spreads will be excessive: above 1%. In that case, you shouldn't place any orders until the numbers are below 1% again. Because of the 20-minute delay, the spread data is shown as "na" (not available) until about 9:50 a.m. Eastern Time, but this is not a concern. Long-term investors should never place market orders when the market is closed or during the first 60 minutes of trading. Spreads can be very high in the first hour, as explained in Chapter 4 of the book Muscular Portfolios.
The buy column shows which three ETFs have the strongest odds of success in the coming 30 days. These are the ETFs with the best 5-month gains (for the Mama Bear Portfolio) or the best average over the past 3, 6, and 12 months (for the Papa Bear Portfolio). These statistics are not guarantees, which you never get in any market. They are probabilities, which is all we long-term investors need for the growth of our savings.
The orange calendar widget in the lower-right corner allows you to see the rankings for any market day in the past three months or so. This can be useful if you wish to calculate monthly returns. When you select a date prior to today's date, the spread column will display "na," since only the newest spread information is relevant.
IEX Cloud is a market data service that opened as recently as May 2019. It's provided by Investors Exchange (IEX), a trading marketplace founded in 2013 to provide a fairer experience for buyers and sellers of securities. The marketplace was the first to add a "speed bump" of a few thousandths of a second to keep high-frequency traders from seeing large trades before other participants could. The creation of IEX was featured in Flash Boys, Michael Lewis's stunning 2015 book on the problems caused by "freeqs."
When other free features become available at our website, you'll first read about it here in this newsletter. Thanks for your support!
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News from the leading edge of investing
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The S&P 500’s coming five-year return? How about zero.
A statistic the Fed publishes that has been called one of the most reliable forecasts of the S&P 500's future five-year results is predicting a 0% annualized return (see graph above). Now is a good time to diversify your portfolio out of over-reliance on US stocks. MarketWatch
To be an investor, it helps if you’re brain-damaged
People who've lost the part of their brain that experiences fear made twice as much profit in a simple investing game as normal individuals. We can use this fact to improve our own investment skills. StockCharts
Fees of 3% seem small, but they cut your balance in half
If you inherit $100,000, then give it to a wealth-management firm that charges 3% annually in stated and hidden fees, your balance after 30 years would be $269,000. Without the fees, you'd have $670,000 — over twice as much. MarketWatch
Currency trading is a great way to lose money
It seems like you'd win 50% of the time if you simply guessed at random which currencies would go up and which would go down. But 70% of currency traders lose money. Understanding why is very educational. StockCharts
Shocker: The S&P 500 is underperforming the market
No, the S&P 500 isn't "the market." The benchmark's underperformance shows how hard it is for stock-pickers to surpass the total stock market, which is far ahead of the index. MarketWatch
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Get the book that frees you from Wall Street
Muscular Portfolios has received rave reviews from experts of all kinds:
"I know of no book for a general investment audience that is more thoroughly researched and backed up by hard data." —MARK HULBERT, founder of the Hulbert Financial Digest
To order the book, visit Amazon, Barnes & Noble, or any bookseller.
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• Get ready for big changes in your 401(k) plan
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