Is it Time for KBE?

On October 4, 2007, I wrote about Exchange Traded Funds (ETF's). The main focus was on KBE, an ETF investing in large banks. Since then the stock value has dropped 25%, a choice that proved to be much too early for a near term profitable outcome. I have been hanging in there knowing that the negativity in the sector would, in time, reverse its course.

I would tend to think that the bottom is near and expect most banks not only survive but thrive in years to come.

It is not the time to give up, better to wait and add to a long position in order to bring the average cost down and participate in an upswing. Meanwhile, a 6% dividend should keep us in the game and with a price of 40.31 it can be a good place to reload.

An interesting article with an in depth look at KBE can be read at:

http://seekingalpha.com/article/76495-investing-in-banks-the-kbw-large-bank-index?source=yahoo

For those of you who have patiently waited out this deteriorating situation, expect better days ahead.
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Large Banks are on the Move

A few weeks ago, the Fed lowered interest rates making money available and more affordable for banks and lending institutions, many of them under a dark cloud after the "sub-prime" debacle.
The financial sector has been beaten up in the stock markets and several of these companies are poised for a rebound.
A chance to take part on the positive move is buying into a Specialty - Financial ETF such as KBE.
KBE's major holdings include Bank of America (BAC), Bank of NY Mellon (BK), Citigroup (C), J P Morgan Chase (JPM), Wachovia (WB) and Wells Fargo (WFC) to name a few.
KBE is trading today at about 54.00 per share, average volume near 1 million per day, dividend was 5.28% (as of 6/30/07), and has an expense ratio of .36%; its inception date is 11/8/05.
A new investment vehicle for me, I'm willing to give it a try.