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TheStreet Open House

Dion's Weekly ETF Blog Wrap

Stocks in this article: FDNCYBIAK

NEW YORK ( TheStreet) -- Don Dion posts his current insights on the stock, bond, commodity and currency markets in his RealMoney blog, anticipating which ETFs will be in play next.

Here are three of his blogs from the past week.


Five Reasons to Own FDN

Published 7/27/2010 1:20 p.m. EDT

Here are four important, though seemingly different, headlines from the tech industry today: "Yahoo Japan Will Use Google Technology for Search"; "Ruling Lets iPhone Users Alter Phone Software"; "Verizon and AT&T Outages Upset Service in New York"; and "Citi Discloses Flaw in iPhone App."

All of these headlines appeared on various financial Web sites this morning. Investors like reading about tech, and the more connected that people get, the more concerned they get about connectivity itself.

As investors, we often concentrate on picking the best tech products and companies from a booming industry. Will the Apple (AAPL) iPhone become eclipsed by Google's (GOOG) new Android software? Will Amazon's (AMZN) Kindle or Apple's iPad make traditional magazines and books obsolete? Which company will ultimately produce the one product that will become indispensable to users across the globe?

Who doesn't want to buy shares of that company and watch them double, triple -- make up for all that money lost during the Great Recession?

In our quest to tag the next great product, however, we fail to take the necessary step of observing the overall trend. Here's one statistic that should say it all: Facebook has 500 million users around the globe. Why do people flock to Facebook? We live in an age where we need to stay connected. You can't bet against the Net , a message I've been trying to send to investors since late last year.

Rather than trying to pick and choose companies that thrive on the Internet, stick with the First Trust Dow Jones Internet ETF (FDN). Have my past blogs ( here and here ) left you unconvinced? Here are five reasons you should consider buying shares of FDN.

1. People Are Cheap, and Rightly So

After the Great Recession, consumers have tightened their purse strings. Investors learned today that consumer confidence is now at rock-bottom. Still, people need to buy essentials -- and the occasional gift -- and they want to make sure they get the best deal possible. FDN components like Google, eBay (EBAY) and Yahoo! (YHOO) help consumers find the best deal possible before opening their wallets.

2. People Are Traveling Again

Are you ready for takeoff ? Recent earnings from top airlines like JetBlue (JBLU) and U.S. Airways (LCC) show that consumers are once again taking to the skies for a much-needed (and perhaps much-delayed) vacation. Rather than shelling out the big bucks to take the family to Disney World, however, everyone's once again turning to the Internet to find the best deals. FDN components like Priceline (PCLN) and Expedia (EXPE) allow consumers to find the best deals from the comfort of their living rooms.

3. Looking For a Job? Or Reluctant to Hire?

It's equally easy to understand why Americans are obsessed with unemployment data and why private industry is reluctant to begin full-scale hiring efforts. No matter which side of the divide you're on, FDN offers exposure to companies that both help you find a job as well as help firms postpone hiring. Monster Worldwide (MWW) is one of the best-known job sites out there, while Salesforce.com (CRM) allows companies to outsource functions like marketing without having to hire a whole new department in improving economic times.

4. Investors Are Firing Their Brokers

In the wake of the 2008 meltdown, many investors are cautiously re-entering the market -- without the help of traditional brokers. This is good news for FDN components like TD Ameritrade (AMTD) and E*Trade (ETFC), low-cost online brokerage services that appeal to do-it-yourselfers. Investors are re-entering the market, albeit slowly, and the trend of online investing continues to look promising.

5. No Need to Pick and Choose

Online firms are always in flux, and a site that's popular one day can easily be forgotten the next. Rather than getting saddled with a firm that gets stuck in the mud, choose a well-balanced fund like FDN that doesn't stake its performance on the result of any one Internet firm -- just one more way to reduce risk in a difficult environment.

At the time of publication, Dion Money Management was long FDN.

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