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Caution Key in Second-Quarter ETF Forecast

Blind bullishness is dangerous and, therefore, aggressive and conservative investors should have these factors in mind when prepping their portfolios for the road head. Dividend-paying equity ETFs like the iShares Dow Jones Select Dividend Index Fund (DVY) or the Vanguard Dividend ETF (VIG) offer jittery investors a chance to maintain stock exposure while protecting against a potential correction.

Meanwhile, investors can boost their level of safety by paring back exposure to excessively risky emerging markets. Single nation products like the iShares MSCI Thailand Investable Market Index Fund (THD) or the Market Vectors Brazil Small Cap Index ETF (BRF) may be enticing during periods of relentless upward action. However, if clouds gather, instruments like EEM and VWO may be better choices. Their globally diversified investing strategies can help mitigate downward action.

The road ahead may not be perfectly smooth, but ultimately I do not feel that we should be heading for the exits here. By refocusing attention towards slightly less risky instruments, it is possible for even the most fearful investors to ride out a potential squall.

Written by Don Dion in Williamstown, Mass.

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At the time of publication, Dion Money Management owned iShares Gold Trust, Vanguard Emergin Market ETF, iShares MSCI Emerging Market Index Fund and iShares Dow Jones Select Dividend Index Fund.
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IAU $10.22 -1.06%
TLT $120.97 -0.10%
IEF $106.36 0.10%
VWO $33.99 -2.19%
EEM $33.94 -2.19%


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