You can only be one.
There has been a rapid movement over the past few weeks by commercial traders of gold futures to increase their net short position as a group. That is a development which has importance for the future of gold prices.
The data for this week’s chart come from the weekly Commitment of Traders (COT) Report, published each week by the CFTC. Within that report, the CFTC breaks down futures traders into 3 groups. That agency provides a full page of wonky definitions of each category, but here are my abbreviated versions
Commercial Traders. The big money, and thus presumably the smart money. Think Goldman Sachs for stock index futures, or Archer Daniels Midland for wheat futures.
Non-Commercial Traders. The big speculators, AKA hedge funds. They usually have the opposite position from the commercials, with the exact difference between them consisting of the positions held by…
Non-Reportable Traders. The small money, and nearly always the dumb money. They are called non-reportable because the size of positions they hold is so small that the CFTC deems them not to merit reporting individually.
I report on the relevant developments in the COT Report data in every Friday’s Daily Edition. Not every week has meaningful insights for every one of the futures contracts that I follow. Generally speaking, these data are most valuable when they show an extreme reading, because extremes suggest that a move in the other direction is likely. But figuring out what an extreme reading consists of can be a bit of a trick.
For gold, a big part of that trick is knowing that the commercial traders have been continuously net short since late 2001, and so the game consists of evaluating their current position relative to the range of recent values. Part of the reason for that bias by the gold commercials to the short side is that a lot of the commercial traders are actually gold mining companies who use the futures markets to sell their future production at a price known when they enter the contract. Since they are always producing, and since financing is sometimes tied to a requirement to fix the sales price, we get a seemingly bearish bias in the data.
Gold prices bottomed at the end of July 2015, when the commercial traders were at their smallest net short position in years. As gold prices rebounded, the commercials gradually started upping their short positions. That movement toward a larger net short position just recently gained a lot of urgency, as if they knew that a top was coming very soon and they needed to get positioned for it. This is something we commented on in our Daily Edition as it was happening, and last week we noted that the level was high enough to get ready for a trend change. That’s a cue to be extra attentive to indications of trend change, and we outlined such criteria for our Daily Edition readers.
That trend change was brought about by the FOMC’s Oct. 28 announcement, which hinted at a probable rate hike in December 2015. How did the commercials know that was the way that the ball was going to bounce? They do seem to have that talent a lot of the time, which I suppose is how they got to be the big money.
This chart is only current through last week’s COT Report data, because this coming Friday’s report is not out yet. The reports are released each Friday at 3:30 Eastern time, and they reflect traders’ positions held as of the preceding Tuesday. So even when we get the COT Report for this week, we will only know how the commercial traders were positioned before the FOMC meeting, and not how they may have responded to the news. That we can update after getting next Friday’s COT Report.
If you are interested in following the insights I find in the COT data on gold, bonds, and occasionally copper, crude oil, gasoline, coal, silver, and currencies, you might be interested in our Daily Edition.
Tom McClellan | The McClellan Market Report | www.mcoscillator.com
First published here: http://goldsilverworlds.com/trading/cot-data-for-gold-at-topworthy-level/
Eric Jamison / ASSOCIATED PRESS
Felipe Dana / dapd
“We got offered to do Ozzfest Japan in the beginning of the year, so I was like ‘Let’s say yes to that,'” Lee told Rolling Stone. “I just added the three U.S. dates on to it so we could get a little practice before doing a big gig where everything is out of your control.”
The band will be at Nashville’s Marathon Music Works on Nov. 13, Dallas’ South Side Ballroom on Nov. 15, and Los Angeles’ Wiltern on Nov. 17, according to the group’s official website.
The band has been on “hiatus” for three years, in which time Lee has pursued something of a solo-career, which has also included scoring films.
But she said she felt drawn back to the group, and was touched by fans’ continued love for their angst-filled songs.
“It’s such a wonderful gift to have this bag of songs that people know,” she said. “It makes me very happy to sing ‘Bring Me to Life.’ I don’t feel so disconnected that I can’t sing ‘My Immortal,’ [though] that’s just not completely who I am anymore.
“Yes, I have grown since then. I wouldn’t write that song today, but it’s become a beautiful part of my history and my fans,” she said.
There are no apparent plans for any new music as yet, but Lee did hint at further appearances next year.
“It will be good to see the fans again,” she said. “I’m going to be keeping my eye open to us for more opportunities. Like probably next year.”
A proverbial picture [chart], being worth 1,000 words, we will let the charts speak for themselves, with observations/comments attached to each one.
From our perspective, the charts are saying, irrespective of what anyone is reading or following regarding gold and silver, there appears to be no change in trend for the near term. The state of China’s economy; possible confrontation between China and the US now sending ships to irritate/challenge China’s control over it part of the ocean where she is building new bases; flagging response to the Fed’s ongoing failure of injecting more and more fiat in an already over bloated fiat economy, in fact, world-wide; Russia’s ongoing embarrassment of Washington with Russia’s pinpoint air force accuracy bombing ISIS terrorists, and commensurate challenge of taking control of the Mid East from the flailing Sunni Arab coalition, Western political disarray, etc, etc, etc.
Then there is the never-ending slew of new directly related information as to facts and fundamentals about gold and silver and the ever-missing market interpretations arising from all available information.
As we always maintain, charts are the cumulative distillation of all news and also the input from all buyers and sellers that can impact the market that would otherwise be impossible to assemble and then assimilate in order to make sense of it all. The charts’ developing market activity accomplishes that. It then becomes a function of how well the charts can be understood in the message[s] being conveyed for all to see.
The most obvious competition for Precious Metals [PMs], is fiat currency, and no country has been more manipulative in internationally suppressing the price of gold than the US Federal Reserve, aided and abetted by the corporate federal government. It is a perfect cover for the international elite bankers/globalists pulling the strings behind government, while at the same time, having the masses believe it is the government actually in control.
It is impossible to keep issuing endless amounts of fiat without eventually destroying the economy, and this has been on an international scale via the IMF, BIS, and central banks. It is a testament to the insidious strength of the globalists to subvert and distort the world economy and still maintain control over those being ruled.
The US-issued fiat Federal Reserve Notes, widely accepted as “dollars,” has maintained its
relative strength, as noted by what appears to be a weak reaction, [see chart],given the degree of the rally from the 80 area. What we know about weak reactions [pullbacks in a rally], is that they almost always lead to higher prices.
The premise behind that observation is simple. If sellers have spent as much effort as they can to get price lower, and all they can accomplish is a mild correction, it is an indication that the market is in stronger hands preventing price from going lower. Once the sellers have expended themselves, new buyers, recognizing that price has held well, will rush in and add to the demand to push price higher.
The sideways TR since the March ’15 high has the earmarks of a weak reaction, holding the 93 area on each attempt to breach that level and take price lower. The failed August probe lower has held twice in retest attempts, the latest 3 weeks ago. Some might interpret last week’s failed retest of 98 and lower close as negative. While the range is smaller, indicating a lack of buyer ability to maintain the rally, but equally compelling is the fact that the sell off did not make much progress moving price lower. TRs [Trading Ranges], can be difficult to trade because price if failing to go to newer highs or newer lows. Best to let the TR play itself out and “go with” the confirmed directional breakout.
Twelve times a year, we get to present the monthly charts in order to keep a higher time frame perspective. Higher time frames are much harder to turn and change trend, so it pays to always be aware of what a monthly chart is indicating. A fact that all can agree on is that price is at recent lows when compared to the 2011 highs. That indicates the trend is down. It would be impossible to argue otherwise, whether one is an experienced chart reader or has no experience.
The comments on the chart further amplify the logic of understanding what the message of this particular chart is conveying. There is no identifiable piece of evidence that indicates any sign for change, and no change can occur before one sees such sign[s]. That may sound simplistic, but it is also true.
Before we see a possible change on the monthly chart, a change on the next lower time frame weekly chart will show up first. What we like to see in reading charts is a form of synergy where the respective lower time frames are in sync. We see that on the weekly: the trend is down. A similar channel shows a downward direction, and even within the channel, as is noted, price labors on rallies and has greater EDM [Ease of Downward Movement], indicating sellers are still in overall control. From 1,200, it took price 5 weeks to reach the last swing low. Since, the current reaction rally is in its 14th week and has yet to fully retrace to 1,200.
The current rally not only has failed to retrace all the loss from 1,200, over the last 14 weeks, the rally also failed to get much past a halfway retracement within the channel. Buyers need to demonstrate an ability to effect change, and any change on the weekly will first show up on the next lower time frame, the daily chart. You may be able to sense how the charts “talk” to anyone wanting to observe their message.
Charts are organically evolving in the sense that they reflect the efforts of living buyers and sellers, and computerized input still results from live direction in their origin. Charts change constantly, especially on the lower time frames. Being able to “read” the developing “story” is the best edge one can have.
While still nearer the lows, we can see the potential for change developing on a small-scale, since the July swing low. There is a small high followed by a higher low, and then another higher high, last week. If the next reaction lower holds above the last swing low, forming another higher low, the short-term trend will change to at least sideways.
The next question is, does the daily confirm the weekly, which we noted already confirms he monthly, thus adding to the synergy of time frames? When charts are complimentary over time frames, it makes taking positions within the obvious momentum potentially more profitable.
It is easier to see the high in August followed by a higher low and then the higher October swing high, which is now being corrected. To the extent one can say gold has been trying to change trend to go higher, the angle of the rally is somewhat lax, bars are overlapping, gains harder to sustain themselves, yet price is marginally working higher.
All we can do is watch the character of this current reaction already underway and watch how much lower it goes, noting the size of the bar ranges and accompanying volume. For now, there is little to be excited about in terms of a change in trend for gold, even silver.
The set up for silver is slightly different from gold. The further price declines, the less is the net downward progress, but price is still going lower, so do not try to anticipate a change where none has yet occurred. The inability of price to rally up and away from the support area remains problematic.
What can be said about monthly silver is that price, for October, has a higher high, higher low, and higher close. That observation follows three months of a clustering of closes. This could be subtle sigh of possible change, but it would still need to be confirmed by stronger overall performance to the upside.
What has to be respected the most in reading the weekly chart is the fact that the current rally from the August swing low has not been able to rally above and hold, a halfway retracement in the current TR.
NMW [Needs More Work]
We saw the developing “story” in silver as being more positive in some time, up until last Wednesday’s failed breakout rally. Like the fiat “dollar,” discussed in the first chart, the rally from the early October low was holding its gains from the past few weeks. The reaction was weak, and weak reactions lead to higher prices, which is how we were viewing developing activity in silver.
The breakout rally on Wednesday did not hold. It was not confirmed, a term we often employ in judging market activity. It made sense to buy the breakout, which occurred on
strong volume, but nothing is guaranteed, and a small loss resulted, the cost of doing business.
So far, the correction has not extended lower when sellers had every opportunity to press the trapped new buyers but failed to do so. Now, we simply have to watch how the market activity unfolds next week, for how it unfolds will be the message from the market as to what to expect moving forward.
If it is not clear, then there is nothing to do. Go with the flow.
First published here: http://goldsilverworlds.com/price/month-end-technical-review-for-gold-and-silver/
WHEN the third Greek bail-out was outlined in principle on July 13th after an extraordinarily fraught summit of euro-zone leaders, between €10 billion ($11 billion) and €25 billion out of the total sum of up to €86 billion of help was set aside for bank recapitalisation. Greek banks had been undermined for over half a year as deposits drained out of them, on worries about a possible exit from the euro once Syriza, a radical left party, won the election held in January 2015, culminating in their closure for three weeks in late June and July. They had been further hurt by the harm done to the economy and thus to their loans arising from Syriza’s ill-judged attempt to outbluff its official creditors. Even so, the notion that they would need as much as €25 billion to offset the damage and put them on a sound footing appeared unduly pessimistic.
However, just how much they actually required would not be known until the European Central Bank (ECB), since late 2014 the supervisor of the four big Greek banks—Alpha, Eurobank, National Bank of Greece and Piraeus—that dominate the economy, conducted a probe into their books together with a stress test examining how they would be affected if the economy turned even sourer than expected in 2015-17. Today the ECB has published the results. They reveal that the extra capital that will be needed is considerably less than…Continue reading
First published here: http://www.economist.com/blogs/freeexchange/2015/10/third-bail-out?fsrc=rss
Simple, observable facts lead the prudent saver and bank customer to be wary of the status of the European banking system.
European QE has failed and, according to the ECB’s own data, has never, ever been successful. Look at this chart below. No matter how much the ECB has cranked up balance sheet purchases, lending to non-financial companies has never, ever materially benefitted.It gets worse, as explained in the video below. This Halloween, if you really want to look spooky, go dressed as a European bank depositor!
Hold your real assets outside of the system in a private, non-government controlled, international facility –> http://www.321gold.com/info/053015_sprott.html
For many years, I’ve provided consultation for those who had come to the conclusion that they were living in a country that was removing both their freedom and their wealth. In many cases, they had already reached the conclusion that they needed to internationalise and only needed guidance as to how they could effectively internationalise themselves.
Today, the number of people who see the writing on the wall is growing exponentially, but the great majority of the new crowd are coming to the realisation rather late in the game and haven’t done the requisite planning. In fact, many of them so greatly fear change that they cannot bring themselves to take the necessary steps.
Time and time again, I’m hearing the same sticking points for failing to prepare – for failing to assure a more promising future for themselves and their families. With many of these sticking points, the replies reveal the sticking points to be merely excuses for failing to act. Here’s a selection of the most common:
I can’t open a foreign bank account. I need my money here, where I can get to it.
The EU, the US, Canada and some other countries have legalised bank confiscation of depositors’ funds. In addition, these jurisdictions may be initiating capital controls in the near future (as Greece has already done). By keeping your wealth at home, in a bank, you may accomplish the reverse of what you’re seeking – you may lose your wealth.
But I can’t operate without cash. I need a chequing account to pay monthly bills.
That tells you to maintain the minimum amount in a chequing account – say, three months’ worth of expense money. And be sure to regard even that amount as sacrificial. The balance of your wealth can be moved to a jurisdiction that has no confiscation law.
But, what if I suddenly need more cash, if I need to buy a big item, say, a car?
All you need do is have your foreign bank wire-transfer the funds to your home bank. All you’ll pay is a small transfer fee and the remainder of your money will be safe. And, remember, those countries that are presently facing an economic crisis may try to keep you from taking your money out, but they’re only too happy to have it come back in.
The market for houses here is not all that good. If I sold out now, I don’t think I’d get another house as nice as this one when I moved to another country.
This is very possible. However, the housing market promises to sink further. It’s already too late to get top dollar, but not too late to make a move. Remember, it’s always better to escape a downwardly-directed economy in favour of an upwardly-directed economy. Yes, you may well take an initial hit, but your future will be more promising, and it’s your family’s future that’s of the greatest importance.
I might not get as good a job overseas as I presently have.
The same reasoning applies. Choose a destination where opportunity exists and treat the present as being less important than the future.
I have no idea where to go. I’ve only been abroad on holiday.
Then, you’re like most people. So, it’s time to begin the process. Make a list of all the things that are truly important to you (be it freedom from taxation, good schooling, a non-invasive legal system, etc.), and overlook the items that are convenient, but unnecessary (a handy local Starbucks, a gym that you like, etc.) Choose the country (or countries) that seem to be the best fit for you, then get to work finding out what you have to do make a move.
What guarantee do I have that internationalising will work out?
None! But then, you have no guarantee now. In fact, the opposite is true. If economic decline in your home country is virtually certain, your move will be the same as for those who left the Roman Empire in its final days. Decline was a virtual certainty at home, but opportunity was likely in the lands to the north. Those who had the courage made the move and many prospered. There’s no promise of success, just a greaterlikelihood.
My family feel that I’m being too alarmist. They want things to stay as they are .
Of course they want things to stay as they are. We all would like to retain all the niceties of life that we presently have – friends, familiar places, etc., but the coming economic changes stand to erode the freedoms and overall quality of life dramatically. Rather than focus on the fact that you’re the bearer of bad tidings to your family, you might wish to focus on the thought that, if you don’t prepare for the future now,you may one day have to answer the question, “Daddy, if you knew that things were going to get so bad, why didn’t you do something to save us? Now, it’s too late.”
As stated in the introduction of this article, these and other, similar sticking points are actually common as reasons for doing nothing to counter economic threat. (Finding reasons not to take the more difficult path is easy, but there is a price to be paid.)
Throughout history, there have been many empires. Each has its day and eventually declines. In the final stages, it’s those who are resident in a given empire that have the most difficult time grasping that the end is nigh. In every case, the majority fail to act and end up riding the roller coaster to the bottom. Historically, at the bottom are economic decline, loss of freedoms, confiscation of property, tyrannical government and, most importantly, restrictions on escape.
It’s not all doom and gloom; not the end of the world – just the periodic decline of empire. As one country declines, others rise. Each individual is faced with the choice whether to go down with the ship, or board another, that’s headed for a better world.
Jeff is British and resides in the Caribbean. The son of an economist and historian, he learned early to be distrustful of governments as a general principle. Although he spent his career creating and developing businesses, for eight years, he penned a weekly newspaper column on the theme of limiting government.
He began his study of economics around 1990, learning initially from Sir John Templeton, then Harry Schulz and Doug Casey and later others of an Austrian persuasion. He is now a regular feature writer for Casey Research’s International Man.
First published here: http://www.zerohedge.com/news/2015-10-30/most-popular-reasons-going-down-ship
To buy or not to buy in November? That’s the big question as the biggest shopping season of the year kicks off. Seemingly everything is on sale this month, from electronics to apparel to appliances and furniture. So, what’s worth buying in November — and when is it worth waiting?
Electronics. If you’ve been waiting for the right time to buy a new TV, November is your moment. With Black Friday and the holidays fast approaching, prices on HDTVs sink to their deepest discounts this month and good deals should continue through December. Tablets, laptops, digital cameras and other consumer electronics also see bargain pricing as the gift-buying momentum picks up.
Halloween novelties. When Halloween is over and done, retailers waste no time clearing the shelves. Now is the time to find next year’s costume, often at 50 percent off. Deeply discounted Halloween decorations and candy also hit the sale rack in November. Load up for holiday baking, stocking stuffers and school snacks.
Tools. Tool kits such as drill, wrench, and screwdriver sets make welcome gifts for DIYers, and this month kicks off the prime time to buy an assortment of practical tools. Some of the best sales of the year generally surface in the Black Friday and Cyber Monday extravaganzas and continue into December.
Cookware. With home chefs getting a head start on holiday cooking this month, cookware deals also heat up. Be on the lookout for discounted cookware to equip your own kitchen, give as a gift or store away in anticipation of a wedding invitation.
Home goods. If you’re cleaning the house for holiday gatherings and discover your upright vacuum is on its last wheel, good news: You can save on a new one this month. The same goes for large and small appliances and furniture all through the house. Sales and discounts crop up in November, especially around Black Friday and Cyber Monday.
Apparel. Clothing may be on a lot of wish lists, but unless it’s a must-have item for someone special, wait until January for the biggest markdowns on winter clothes and shoes. Otherwise watch for enticing store coupons. Hats, gloves and winter sleepwear make good gifts and are deeply discounted in Black Friday sales.
Wedding dress. If you’ve recently gotten engaged, sew up that wedding dress now. November is a slow month for bridal retailers, who typically respond with lower-than-average prices. Getting a jump on the planning maelstrom leaves plenty of time to complete the critical alterations.
Entertainment. DVDs and Blu-ray movies make excellent stocking stuffers. With prices as low as $2 and $3 in Black Friday sales, shoppers can pick up a few and put the savings toward other items on their lists.
Toys. Toys see some modest discounts in November, but past years have shown that the best time to buy toys is closer to Christmas. During the two weeks leading up to the big day, even deeper markdowns show up on holiday toys. Wait as long as possible on this one — unless you’re on the hunt for a hot toy that’s likely to sell out.
Collectibles. Are you angling for a “baby’s first Christmas” ornament with the year prominently displayed? If so, wait until December to fork over the cash. Although dated collectibles go on sale in November, better deals pop up in December. And if you can hold out until January, the price declines will be steeper yet — on a very limited selection, however.
Seasonal produce. November is a big month for food. Thanksgiving tables groan under the weight of hearty repasts that incorporate seasonal produce. Apples, pears, cranberries, plums, clementines, and pumpkins round out the fall assortment of fruit (yes, pumpkins are a fruit) while broccoli, leeks, cabbage, squash, cauliflower, parsnips, celery, chestnuts, potatoes, shallots, turnips and yams make companionable in-season vegetables to buy in November.
Meats. Turkey and other game, such as goose, pheasant, and venison, typically form the core of winter holiday meals. Despite high demand, these meats often sell for discounted prices leading up to the feast days. Buy one variety for Thanksgiving dinner and freeze a second for a December holiday spread.
Food holidays. November plays host to a handful of notable food holidays, which may help shoppers score bargains and coupons. Keep an eye out for deals associated with National Candy Day, National Cake Day and National Chocolates Day. National Nachos Day also pops up in November and local restaurants may advertise specials.
First published here: http://www.dailyfinance.com/2015/10/31/what-to-buy-november/
Filed under: Life Stage Lessons
Do you feel as if you’ll be in debt forever? Join the club. One survey found that 13 percent of Americans think they’ll never pay back all their loans, and another 8 percent say they won’t pay off what they owe until they’re in their 70’s.
Finding yourself buried in debt can be discouraging, but there’s hope. We’ve rounded up three common reasons people can’t get out of debt — and offer advice on how to turn things around.
Your Mortgage Is Too Big
The American Dream can turn into a nightmare if you take on a bigger mortgage than you can afford. Today, the average homeowner’s mortgage makes up 69 percent of total household debt. If your mortgage is too much of a load for you to carry, you might need to find a roommate to help cover costs, downsize to a less expensive home, or rent instead of owning until you can save enough for a big downpayment.
If your goal is to become mortgage-free as fast as possible, adding a little extra to your monthly payment is an easy to get there. Let’s say you have a 30-year, $200,000 mortgage with 25 years remaining and a 4.5 percent interest rate. By paying just $100 more a month, you’d save nearly $21,000 in interest and be out of debt almost four years early.
Your Emergency Fund Is Too Small
A major health expense, surprise home repair or sudden job loss could deal a blow to anyone’s finances. Yet, only 38 percent of the people polled by Bankrate (RATE) have enough cash on hand to cover such emergencies. Many people said they’d have to ask a family member or friend for the money or foot the bill with a credit card. Either way, you could end up drowning in debt if you have to borrow cash every time an unexpected expense surfaces.
That’s why it’s important to put away enough money to cover six months’ worth of living expenses. If that sounds like a lot, you don’t have to do it all at once. You can use a free service such as Digit to automatically set aside a little bit at a time. Once Digit is connected to your bank account, it analyzes your income and spending habits to determine how much you can afford to contribute to an emergency fund.
Your Interest Rates Are Too High
The higher your interest rates, the more you’ll have to pay to wipe out your debt — and possibly the more time it will take. Say you have a $10,000 balance on a credit card with a 15 percent annual percentage rate, which is typical these days. If you pay $225 a month, it will take 5½ years and almost $4,700 in interest to pay off your debt. But if your APR is 11.6 percent, which is the average for low-rate cards, you’d be debt-free seven months faster and save more than $1,500 in interest.
Call you credit-card company to see if your rate can be lowered. If not, consider taking advantage of a zero percent balance transfer offer from another credit-card company. A third option is to consolidate your high-interest credit-card debt into a lower-rate personal loan.
Take a look at seven more reasons you’ll never get out of debt to learn more.
First published here: http://www.dailyfinance.com/2015/10/31/why-you-cant-get-out-debt/
Viewing investment decisions through an LGBT lens can pay off. An expanding body of evidence indicates that what’s good for lesbian, gay, bisexual and transgender employees is also good for investors. Analysts say companies that take the high road regarding sexual orientation tend to be progressive and thoughtful about other aspects of management as well.
The Workplace Equality index designed by Denver Investments portfolio manager John Roberts has annualized returns of 10.14 percent for the 10 years ending June 30, compared with 7.89 percent for the Standard & Poor’s 500 index (^GSPC). The Workplace Equality exchange-traded fund (EQLT) includes 199 companies and tracks with the Workplace Equality index.
Julie Goodridge, founder and CEO of Boston-based NorthStar Asset Management, says companies are leading advocates for the LGBT community because they don’t want to lose top talent. While she and others say shareholder activism has yielded some gains, change is now driven primarily because it makes good business sense.
For instance, numerous recent studies illustrate how diverse groups make better decisions, analysts say. And it’s not just having “one of each” — a woman, one person representing each major ethnic minority and a member of the LGBT community — but including diverse points of view and ways of thinking.
Northstar, the Workplace Equality index and the LGBT advocacy group Human Rights Campaign share a common approach to analyzing companies’ commitment to LGBT employees and business partners.
They start by examining official policies. Do the companies simply comply with the law or do they proactively champion equal rights for the LGBT community? The Human Rights Campaign’s current report covers 366 businesses that earned top scores as “best places to work” for LGBT equality.
Employers not only set a standard for the workplace, but a precedent in their communities, Goodridge says.
This isn’t an academic issue. Anti-LGBT culture and laws can collide with employees’ career paths. For instance, if a rising staffer is in line for an overseas assignment, what is the obligation of the employer to craft an opportunity that fulfills employees’ career goals while not putting them in an untenable or even dangerous position in a country hostile to the LGBT community?
That’s exactly the kind of dilemma where progressive companies shine, Goodridge says.
“How are you protecting your talent globally? It’s like divesting from South Africa — it’s a company’s responsibility to say, ‘This isn’t a country we feel comfortable working in because our employees are not safe,'” she says.
Roberts says investment managers who use an LGBT lens are well-connected with employee advocacy groups and informal networks of employees, so money managers are quick to call out lip service — and equally quick to recognize employer innovation.
“We’ll challenge management if there’s a culture disparity,” he says. “We’d rather be collaborating and reaching out to company management rather than confronting them. We think it’s much better to use engagement: ‘Hey, we want you in our index, and here’s what we think you need to do.’ ”
Debra Neiman, a certified financial planner in Arlington, Massachusetts, who specializes in LGBT issues, says wading into investing from this perspective can start with shopping. Pay attention to retailers and their suppliers, and how that ecosystem supports the LGBT community (or doesn’t) to see the ripple effect of economic decisions, she says.
Often, family and friends of LGBT workers also decide to “vote their values,” too. “This group has a great propensity for wanting to align its dollars with its morals,” Neiman says. “It can be as simple as, ‘I won’t shop at a store that doesn’t support my people.'”
Neiman, who is on the advisory board of the Workplace Equality Index Fund, recommends LGBT-minded investors buy into LGBT-oriented funds rather than pursuing individual stocks. “If you want to invest in a way that companies promote inclusive workplace policies using the individual stocks, there’s only so much impact you can have, depending on how much money you have,” Neiman says. “But you get more bang for your buck by using a fund like the Workplace Equality Index Fund.”
One thing’s for sure: There’s no fund or company that occupies the sweet spot of delivering top returns while hewing to gender, sexual identity, environmental, energy, medical and human rights issues.
Roberts recommends using “several arrows for various causes, whether those funds are targeting workplace equality or green,” By layering several investing lenses, “you screen out the alpha. You have a better chance of success by focusing than with a broad-based approach.”
Here are five of the best-performing stocks in the EQLT ETF. Each of these were purchased in February 2014, although the number of shares held may have fluctuated, as EQLT is an equal-weight fund:
Nike Inc. (NKE). NKE stock has delivered a 37 percent return for EQLT and is up more than 42 percent so far in 2015. Nike is a leading athletic apparel company, despite some challenges from Under Armour (UA), Adidas (ADDYY) and privately held New Balance.
Raytheon Co. (RTN). A major defense contractor, Raytheon stock has delivered a 10.5 percent return to the ETF and is up more than 9 percent so far this year.
Navigant Consulting (NCI). The Chicago-based consultancy is up only 6.7 percent this year, but has given EQLT a great return since the fund opened a position nearly two years ago, delivering a 13.5 percent return.
Hartford Financial Services Group (HIG). The property and causality insurance sector isn’t exciting, but the Connecticut-based insurer has delivered an eye-catching 18.5 percent return for the EQLT ETF. HIG stock is up 8.8 percent so far this year.
Chubb Corp. (CB). Another one of the major property and casualty insurers, New Jersey-based Chubb has given EQLT a hefty 28 percent return since February 2014. CB stock is up nearly 26 percent so far this year and is challenging its 52-week high.
Joanne Cleaver is a widely published business author and journalist. Follow her on Twitter @jycleaver.
First published here: http://www.dailyfinance.com/2015/10/31/lgbt-rights-great-returns-investors/