Most of you know that Japan’s quantitative easing is actually quantitative inflating, and this newly named Abenomics has really bolstered the price of Japanese stocks. By eliminating the major loss of the value of the yen currency risk, the currency devaluation was largely skipped and this exchange traded fund (ETF) was up a whopping 46% as of the high prints just on Wednesday of this week. That may not sound like it is too much of a gain when you consider how much Japan is pumping into its markets, but that would be an incredible gaining year for any exchange under any circumstances.

The WisdomTree website showed that it had approximately $31.3 billion in ETF assets under management on May 22 when it launched the announced the launch of the WisdomTree U.S. Dividend Growth Fund (NASDAQ: DGRW). The Hedged Equity ETF is represented to have some $5.63 billion in net assets, according to Yahoo! Finance, and $10.7 billion, according to Google Finance. AOL’s Daily Finance represents its market cap as $9.9 billion. The Wisdom Tree site for the DXJ itself as of Thursday morning represents that the fund has $10.7 billion in assets.

With this ETF up so much and having driven Wisdom Tree’s assets up so much, it is no shock that Widom Tree shares themselves are getting pounded on the news. The WisdomTree Japan Hedged Equity (NYSEMKT: DXJ) is down 7.45% at $48.71 and shares of the parent WisdomTree Investments Inc. (NASDAQ: WETF) are now down more than 7% at $12.34. The only good news here is that WisdomTree shares had been down as low as almost $11.00 earlier this morning.

Perhaps the most entrenched and most liquid ETF for Japan is the iShares MSCI Japan Index (NYSEMKT: EWJ) and that is getting pounded as well. Its shares are down 6.6% at $11.32, and at Wednesday’s peak this ETF was up 27.5% so far in 2013. It does not have currency hedging in place.

The 50 largest hedge funds increased their equity exposure by over 5% in Q 1 2013 This quarter, Boeing Co. was the favorite allocation of the funds. The stock experienced $1.6 billion in inflows, which amounted to nearly 250% of its Q4 value in the funds’ aggregate portfolio. Boeing’s shares are up 28.2% year to date (“YTD”), compared to 15.7% for the S&P 500. However, the largest dollar value increase in equity exposure arose from the January IPO of Norwegian Cruise Line Holdings Ltd which was backed in part by Apollo Global Management LP. It’s also interesting to note that though the funds sold some exposure in Google Inc. (Cl A), the technology company was present of the majority (62%) of the fifty hedge funds portfolios. This distinction was previously held by Apple. Two quarters ago, Apple was held by just as widely as Google and it was the largest equity holding of nearly one fourth of the funds. However, by Q1 2013, Apple was held by only 40% of the funds with only four carrying it as the top stock holding.

While the top 50 hedge fund managers largely increased their exposure to equities, the funds also made significant reductions to their stakes in two successful stocks in 2013: News Corp. (Cl A) and American International Group Inc. The funds reduced their holding in News Corp by 20.3% and the stock represented the largest individual equity sale in three of the fifty hedge funds. In addition, the funds reduced their exposure to AIG by 16.2%. With these sales, fund investors seem to be predicting a slowdown or reversal for these two issues, as AIG and News Corp have had very similar YTD returns as Boeing in 2013: 27.2% and 28.8%, respectively.

Shares of Apple Inc. (NASDAQ: AAPL) are fractionally higher in premarket trading, and Google Inc. (NASDAQ: GOOG) is down fractionally. Boeing Co. (NYSE: BA), News Corp. (NASDAQ: NWSA) and American International Group Inc. (NYSE: AIG) are thus far inactive.

24/7 Wall St. wants you to pay close attention here. This should be a wakeup call to anyone with a 401K, ESOP, IRA, pension fund, or other form of retirement fund. It will sound like an exaggeration that much of the American public is basically facing bankruptcy at retirement. Let the figures speak for themselves.

The 2013 Retirement Confidence Survey is actually not much worse than the prior report, but it is truly a low point for the future of America. The EBRI is signaling that the percentage of workers confident about having enough money for a comfortable retirement is essentially unchanged from the record lows observed in 2011. Having a statistical precision of plus or minus 3 percentage points should not sway any opinion that this is a future retirement crisis.

While more than half expressed some level of confidence (13% are very confident and 38% are somewhat confident), some 28% are not at all confident (up from 23% in 2012 but statistically equivalent to 27% in 2011), and 21% are not too confident.

Translation: Only 13% of those who are going to retire are very confident about their retirement, while 28% are admitting that they are not confident at all that they will have enough assets at retirement.

If you are looking for any good news, at least there are 51% who are somewhat confident or very confident. The results were unchanged for a financially secure retirement with only 18% saying they are very confident and some 14% who said that they are not at all confident.

Another sad figure is that only 46% of those surveyed confirmed that they and/or their spouse have tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement. Also, only 2% of workers and only 4% of retirees identified “saving or planning for retirement” as the most pressing financial issue facing most Americans today.

As far as the cause, the primary reason cited (41% of responses) for not contributing (or not contributing more) to their employer’s plan was the cost of living and day-to-day expenses eating up funds. Too much debt was another citation as 55% of workers and 39% of retirees reported having a problem with their level of debt.

Beware the next recession whenever it arrives. Only half of those surveyed, broken out as 50% of workers and 52% of retirees, said that they could definitely come up with $2,000 if an unexpected need arose within the next month. The thought that only half of working or retired Americans can come up with $2,000 within the next month is not just scary. This is alarming.

The Retirement Confidence Survey was conducted in January 2013 by 20-minute telephone interviews with 1,254 individuals (1,003 workers and 251 retirees) who were aged 25 and older using random digit dialing along with a cell phone supplement to obtain a representative cross section of the U.S. population.

We read through much of the data in the full PDF report and it is really nothing short of alarming. Forget about the fact that the media uses the word “crisis” way too often. With this having been conducted in January, the effect of the payroll tax holiday expiring was by and large not yet felt by Joe Public. We have also since then seen that nearly two-thirds of those who are soon to be at retirement age are likely to postpone retirement. Keep in mind that the bulk of the investing public just missed out on four or five years worth of retirement savings.

Last October we showed which states had the most residents whose were the most and least prepared for retirement.

FULL EBRI REPORT

24/7 Wall St. has a message for its readers, and we cannot say this loud enough. If you do not have any form of retirement account set up at all, you better get off your duff and get started saving for your retirement right now! Government handouts for free food and unemployment are not going to last forever, and the US National Debt Clock has just gone above $16.7 trillion as of March 19, 2013. We do not really want to hear about any of you being forced to eat pet food in what should be your golden years.

Please take note of this warning as it is no joke. We really mean it.

The Bank of New York Mellon Corp. (NYSE: BK) released news this morning showing that it has been awarded three patents for key processes that enable electronic trading of commodities such as gold through ETFs. The patents also cover silver and other precious metals, as well as base and industrial metals.

The company shows that it launched this unique process back in 2003. Bank of New York Mellon claims to have created the commodities ETF business, and it said that now consists of nearly $100 billion in commodity assets administered. The organization also serves as custodian, record keeper or administrator for approximately half of all U.S. listed ETFs across a broad range of asset classes.

So here is the question to ask: Is the bank going to now outline competing ETFs that may be in patent violations? We would also want to know if these patents are enforceable and whether the bank wants to go after other ETFs.

There is a lot of money at stake here, and it is not surprising that a company would want to protect some proprietary things if and when it can. As of December 31, 2012, Bank of New York Mellon had a whopping sum of $26.2 trillion in assets under custody and/or administration. It also had $1.4 trillion in assets under management.

We will be looking into this matter much closer because, ultimately, this is the sort of odd financial news that needs to be watched closely. ETFs have more than $1 trillion in assets now, and they account for a large portion of the average daily volume on direct trading in ETF share volume each day. More importantly, these ETFs also are responsible for much of the daily trading volume in the stocks and financial instruments that they have to include to replicate their investment strategy.

Portfolio managers Todd Combs and Ted Weschler are getting even more entrenched as far as their ability to add to positions. The new Buffett holdings are below.   American Express Co. (NYSE: AXP) was roughly 151.6 million shares, SAME AS last quarter.

Archer Daniels Midland Co. (NYSE: ADM) was listed as a NEW POSITION of 5.95 million shares worth some $163.1 million as of the end of 2012.

Bank of New York Mellon Corp. (NYSE: BK) appears to be the SAME SIZE at over 19.6 million shares, but that is after gains had been reported in prior quarters.

Coca-Cola Co. (NYSE: KO) was more than 400 million shares due to the stock split of 2012, but this is virtually the SAME AS BEFORE.

ConocoPhillips (NYSE: COP) is the SAME AS BEFORE at 24.1 million shares, but this is lower than in prior quarters.

Costco Wholesale Corp. (NASDAQ: COST) was 4,333,363 shares, SAME AS last quarter.

READ ALSO: GE is the Best Conglomerate for Investors in 2013

DaVita Inc. (NYSE: DVA) was already more than a 10% stake, but a new filing shows that Buffett and various entities own a collective 13.6 million shares for a 13.0% stake. This position has grown and grown and is a LARGER STAKE. This stock has risen and risen while Buffett kept adding the position.

Deere & Co. (NYSE: DE) was the SAME AS LAST QUARTER at roughly 4 million shares, but this was previously a new position.

DirecTV (NASDAQ: DTV) is a LARGER POSITION AGAIN at almost 34 million shares versus 29.555 million shares before that and it had grown another quarter before as well.

Gannett Co. (NYSE: GCI) was 1.74 million, SAME AS BEFORE but decreased in prior quarters.

General Dynamics Corp. (NYSE: GD) is the SAME AS BEFORE at 3.877 million shares.

General Electric Corp. (NYSE: GE) is listed as THE SAME 588,900 shares, but this is still way down from the 5.008 million shares and 7.777 million shares the two prior quarter.

We have looked at the year-to-date performance of Warren Buffett’s portfolio holdings of Berkshire Hathaway Inc. (NYSE: BRK-B) to see which stocks he has that are helping to drive gains so far in 2013. We looked through all of Warren Buffett’s top stock holdings to identify the biggest winners. What is so interesting today is that the actual Berkshire Hathaway shares are outperforming about 90% of the actual stock holdings that make up the Buffett and Berkshire investment portfolio.

We have included the purchase or sale transaction history of each pick. We have also provided color and the implied upside to the Thomson Reuters consensus (mean) price target objective.

Phillips 66 (NYSE: PSX) remains a relatively new holding for team Buffett but was kept steady last quarter at 27.1 million shares worth more than $1.65 billion. It is also Buffett’s top stock in 2013 so far with gains of more than 15%. We expect that the way Mr. Buffett talked so positively about this oil refinery that he may add to the position ahead. We expect upside to the 1.6% dividend yield and this trades with more implied upside as the $61.30 price is short of the consensus analyst price target of $66.38.

Procter & Gamble Co. (NYSE: PG) has been on fire in 2013 and shares have been hitting new 52-week highs and this DJIA consumer products giant is up about 13.5% so far in 2013. What is interesting is that Mr. Buffett had been lowering his stake and it had fallen by nearly half of its share amount down to 52.8 million shares. That number may be even lower ahead as Buffett tends to keep selling stocks he starts selling out of. If the position is somehow static, that position would be worth more than $4 billion. This hit a 52-week high on Tuesday above $76.50 and the consensus analyst price target is $78.75 with a 3% dividend yield as of now.

We have two runner-ups which we are not formally counting as Buffett’s best performing stocks even though they have been in the holdings before. United Parcel Service Inc. (NYSE: UPS) is technically the third best position in the Team Buffett portfolio, but there is just one small problem. This had been almost entirely eliminated down to 59,400 shares from 261,900 shares last quarter and versus 1.429 million shares two quarters ago. That being said, this 9% gain year to date is almost immaterial for Berkshire’s $242 billion market cap. Ingersoll-Rand PLC (NYSE: IR) is yet another one which would have been great had Buffett remained on its side, but he has sold out of that position in late 2012 as well. That is too bad as this was up 8% year to date in 2013.

Read Also: Many DJIA Dividend Hikes Expected Soon

Deere & Co. (NYSE: DE) is actually a new position for Berkshire Hathaway of about 4 million shares worth about $375 million or so today. As Deere & Co. has a market cap of over $36 billion, Buffett could certainly add exponentially to his stake here without rocking the wagon too much. Deere is up by about 8.5% so far in 2013 and the price of $93.75 still has upside if the $96.00 consensus analyst price target turns out to be accurate.

Verisk Analytics Inc. (NASDAQ: VRSK) was a new position, but after growing that Berkshire Hathaway’s new portfolio managers already trimmed that stake down. As of the last quarterly report Verisk was down to only 1.563 million shares worth close to $80 million. This was next on the list of Buffett’s top stock performers in 2013 with gains of about 7.5% year to date. With shares around $55 now, this is now right at the consensus price target of $55.55 for this risk and analysis provider to the insurance industry.

Torchmark Corp. (NYSE: TMK) is the last of the reviewed gainers for the best performing stocks out of Buffett’s 2013 holdings. This insurance stock holding was the same as the prior quarter at a stake of about 4.2 million after having been raised in prior quarters. This was up about 7% year to date and is worth more than $220 million. With shares around $55 now, the consensus analyst target price is almost $58.73.

Lee Enterprises Inc. (NYSE: LEE) was yet another top percentage gainer but it also is one which Warren Buffett and team have already reduced down to only 1.13 million shares from 3,225,822 shares shown initially. This holding was one that Buffett had asked for confidentiality treatment on in his newspaper endeavors. The gain here is 8.8% year to date, but the position is so small on dollar terms at $1.24 per share that it is not even worth noting as it pertains to the Buffett portfolio dollars. That being said, this is another gainer that is less of a stake for Berkshire Hathaway.

International Business Machines Corp. (NYSE: IBM) has been raised by Mr. Buffett as a larger position and this was listed as over 67.5 million shares at the last available date. That was up slightly from 66.63 million shares from the previous quarter and versus the prior quarter before that at 64.395 million shares. It is likely that Buffett has been writing put options to grow its stake. This IT-giant is up 6.4% so far in 2013 for Mr. Buffett and his stake here is worth more than a whopping $13.7 billion to Berkshire Hathaway. Berkshire is now the largest shareholder of IBM and the $203 share price still has much implied upside to the consensus analyst target price of $225.76.

It is rare that Berkshire Hathaway Inc. (NYSE: BRK-A) outperforms the stock market. While it is a conglomerate and has many aspects of a holding company, there is also a lot of characteristics here that make investors think they have some bond market safety as well.

Buffett’s newest round of stock holdings should be out in mid-February and his most recent holdings can be seen in full here. We tracked the changes each quarter on each position.

After having reviewed and compiled the Berkshire Hathaway winners and losers, there is one thing that surfaced as an obvious lesson: just because Warren Buffett sells out of a stock it does not automatically mean that you should turn your back on those companies.

TrimTabs Investment Research now says that investors poured a record $77.4 billion into U.S. mutual funds and exchange-traded funds during the month of January. The prior record was listed as some $53.7 billion in February 2000.

TrimTabs does at least have a warning here: record inflows should make contrarians very nervous because inflows into funds have historically coincided with market tops. The prior record cited above coincides with just before the technology stock bubble burst. One more warning exists as well. Last week came a TrimTabs report that the Fed is creating $4 billion a day to keep the wheels on this machine greased.

The public has missed out on most of this rally and that is a crying shame. 24/7 Wall St. wants to put one key thought into the minds of the public and for investors: pullbacks, including market crashes, might actually be your friend.

This weekend we saw that Barron’s is calling for a new record on the DJIA. Here was our take on why we have an unofficial upside to our formal 14,590 DJIA price target for 2013.

With many investors hoping for higher gains, investors better pay close attention to just how much these investor inflows and outflows can impact the prices of the stock market and the bond market. The results are astonishing and the implications are very positive.

During the subprime mortgage driven stock market meltdown from 2007 to 2009, the DJIA dropped from 14,093 to 6,627, a 53% fall, while the S&P 500 dropped from 1,500 to 683 for a stunning 54% tumble. It has taken about five years to come full circle, but now the stock market is back to where it was before the crash. After investors piled about $1 trillion into the bond market, close to $550 billion came out of stock funds, according to PNC Wealth Management, as investors sought safety and the return of capital rather than a return on their capital between 2008 and the end of 2012. PNC showed that the first two weeks of January’s rally was on about $13 billion coming back into stocks.

While many investors remained on the sidelines, now comes the realization that retirement plans and investment accounts have missed four years or more of growth for retirement and savings plans. What happens if investors fearing a bond market crash, or even an orderly rise in interest rates, start to sell out of bonds? Certainly you have heard the term “Cash never rallies!” That being said, you can expect more of the same, and that means a rotation of new cash back into stocks. This is not any assurance that stocks will rise in a straight line, of course. We have not formally lifted our 14,590 price target for the DJIA as of yet.

All bull markets, whether in stocks, bonds or commodities, begin with investors moving money into that specific asset class. Again, somewhere close to $1 trillion flowed into the bond market during and after the crash. The yield on the 30-year U.S. Treasury bond went from a 4.80% in the summer of 2008 to a 2.64% last summer. Investors bought the bonds, pushed up the price up and the yields down to historical lows.

For some time now we have made the case that, after a historic and unprecedented 30-year bond market rally, that bubble may be ready to burst. What if only half of the $1 trillion comes out of bonds? As of last month, due to uncertainty over taxes and the fiscal cliff, money was still flowing into bond funds to the tune of more than $5 billion, according to data provided by Lipper. So as of now, that one trillion or so dollars remains in bonds.

Are investors returning to the stock market? Absolutely they are. The DJIA and S&P 500 back at five-year highs did not come magically. But it still left much of Joe Public and retail investors on the sidelines. Now it looks as though retail investors were net buyers of stocks recently for the first time since 2007. Bank of America Corp. (NYSE: BAC) recently gave the three biggest reasons to own stocks, and we have detailed why there likely will be upside to our 14,590 DJIA target for 2013.

One statement that investors never want to hear is “It’s different this time.” The fact of the matter remains that it is. It is important to remember that the S&P 500 is hitting the 1,500 level for the third time since 2000. That is 13 years of essentially digging a hole and filling it back in. Technical analysts call where we are at now a “triple-top.” Having been mired in a secular bear market for so long drove many investors away from stocks, some for good.

Equity funds attracted six times the money that went into bonds in the week ended January 30, according to a Citigroup Inc. (NYSE: C) report that cited EPFR Global data. Stock funds drew $18.8 billion, exceeding the $3 billion that went into bonds. Some 58% of the equity inflows went into North American funds, with exchange-traded funds being the largest beneficiaries, according to Bloomberg.

Lipper has now reported that the four-week inflows in January were more than $34 billion, the largest four-week inflows going all the way back to 1996. If you want more data, Dow Jones quoted a TrimTabs figure showing that January’s inflows may have been the biggest ever, with a whopping $78 billion in inflows. The TrimTabs blog even recently said that some $4 billion is being created by the Federal Reserve each day, and that this is helping to rig the stock market. Perhaps the biggest question to ask is just how evident this is in the key stocks.

So, year-to-date there are only two DJIA stocks that are negative: Bank of America Corp. (NYSE: BAC) by 2.5%, but this was the best performer of the DJIA in 2012; and Boeing Co. (NYSE: BA) by about 2%, and that is due to the woes of the 787 Dreamliner. Last year’s biggest loser was Hewlett-Packard Co. (NYSE: HPQ), and it is so far winning the most of all DJIA stocks with a year-to-date performance of almost 16%. HP is winning due to the renewed buyout interest in Dell Inc. (NASDAQ: DELL). You know that the outflows of capital from Apple Inc. (NASDAQ: AAPL) have to have some investors rethinking the death of the PC. This is where inflows have been happening. If analyst Dick Bove is right, big banks could rise another 30% in 2013.

Perhaps the biggest surprise is the inflows that have come into Procter & Gamble Co. (NYSE: PG), as it is the second best DJIA stock, with gains of 11.6%. With a $205 billion market cap, that is a theoretical $20 billion or so that has ended up flowing into P&G before you consider gap-ups and market maker price changes. While J.P. Morgan Chase & Co. (NYSE: JPM) is up almost 8% year-to-date, its $179 billion market cap implies that almost $15 billion of market cap has been added before gap-ups and market maker price changes. Yet again, more and more evidence of big inflows of capital as it takes real world money to push up these giant stocks with big market capitalizations.

Again, the biggest issue to consider is that nobody owns stocks above this level in the broad markets. So as the market goes higher, you will not have any investors finally able to sell long-time losers. Remember the stock markets have rallied to these highs with high unemployment, a sluggish economy, where last quarter’s gross domestic product (GDP) was actually negative, budget and deficit fights in Washington and a host of other worrisome issues that usually weigh on equity markets. What if the economy improves and Congress agrees on the debt limit and spending in 2013? We even have been tracking broad changes of sentiment around the troubled spots in Europe.

One of the main points for investors to remember is the $1 trillion remains locked up in bonds. We have written frequently about the bond market bubble and what could happen if it bursts. The good news is that may be a slow and orderly exit ahead of the Federal Reserve’s endless asset purchases and quantitative easing. At least we hope that is the case. Barring a complete economic collapse, this bond purchasing will end at some point, and the end of 2014 or the start of 2015 is a lot closer now that we are into 2013.

You may want to read our December article, “A How-To Guide on the Next Big Short: Treasury Bonds.” When we wrote that story on December 5, the yield on the 30-year Treasury bond closed at 2.77%. Recently it was as high as 3.21%. That kind of sell-off in Treasury prices could very easily move all or part of that $1 trillion out of the bond market. Not a single investor can say that his cash rallied over the past four or five years, and if investors are smart enough they will admit that inflation actually eroded the purchasing power of that cash. If cash never rallies, then solid equities with solid dividends and healthy balance sheets are likely to win again.

Abigail may find her job more challenging that her father’s, at least short term. Individual investors, the financial holdings of whom are a backbone of Fidelity sales, have drawn away from most equity investments to those that are safer. Even the mutual fund business has been hurt by this. Much of what Americans earn now goes to pay down debt they loaded on in the decade of the 2000s.

In addition, Reuters points out that Fidelity returns have been less than spectacular, as “Fidelity customers have withdrawn more money than they have added over the past few years.”

Douglas A. McIntyre

According to their research, Moody’s reported just 71 defaults on rated bonds between 1970 and 2011. Standard & Poor’s reported an even skimpier 47 defaults on S&P-rated bonds. While these numbers may be accurate, the number of unrated bonds is much higher, and the default rates are much higher as well. The research yielded 2,527 municipal bond defaults from 1958 through 2011.

The researchers suggest that the difference is due to a couple of factors. First, not all bonds are rated, with the result that only the gold-plated variety ever go through the rating process. Second, different kinds of bonds perform differently. General obligation bonds, backed by the municipality’s taxing authority, are more likely to get an investment-grade rating than are revenue bonds backed by a revenue stream from an enterprise like a hospital or an airport.

A variety of revenue bonds known as ‘industrial development bonds’, which back things like power plants and pollution control facilities, make up the majority of revenue bonds and are particularly risky because they have a short track record.

The conclusion: muni bond defaults are far more common than believed and investors should be cautious. The authors also note that since bond insurers lost their ‘AAA’ ratings following the financial crisis of 2008 they no longer play much of a role in the muni bond market.

The original post is available here.

Paul Ausick