Is it the never-ending "new normal" correction? Or is it the beginning of the bear's salmon dinner?
The financial media have decided there are only two choices -- a "new normal" or a bear market. There's no room for bullishness in the August heat.
Trailing P/E ratios, forward P/E ratios... does it even matter how low they are? Not really. When doom and gloom takes over, stocks can get even cheaper. Much cheaper!
Admittedly, it's not easy for folks to maintain a shred of optimism. Many believed financial stocks were incredible bargains ... and yet financials lost money over the past year.
Here are some approximate year-over-year returns for popular financial ETFs:
- Vanguard Financials(VFH), -1.74%
- SPDR KBW Bank(KBE), -4.58%
- SPDR Select Financials(XLF), -4.79%
Other investors were taken in by the prospect of world demand for oil and gas. Yet energy companies have year-over-year losses as well.
Some approximate year-over-rear returns for popular energy ETFs:
- iShares DJ Energy(IYE), -1%
- iShares S&P Global Energy(IXC), -3.59%
- Oil Services HOLDRS(OIH), -7.32%
So what can you do about it? I think you can recognize there are a number of fairly valued ETFs across a variety of asset classes. Many boast technical uptrends; others offer stellar income streams.
While I never advocate buy-and-hold and always believe in implementing a sell discipline ... here are approximate percentages for seven non-Treasury ETFs working well for my clients. Each is within striking distance of a 52-week high:
- iShares MSCI Malaysia(EWM), 0%
- iShares MSCI Chile(ECH), -0.28%
- iShares S&P Preferred Stock(PFF), -0.42%
- iShares High Yield Corporate Bond(HYG), -0.87%
- WisdomTree Small Cap Emerging Market(DGS), -1.80%
- iShares Global Telecom(IXP), -3.29%
- JP Morgan Alerian MLP Index(AMJ), -3.38%
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