It follows that Emerging Asia ETFs are likely to take cues from a variety of upcoming data points.
One, the European Central Bank will need to purchase more sovereign debt. Not only do the overwhelming majority of economists, money managers and institutional traders expect it. There's little hope for stocks of any region without the expected stimulus.
Second, policy easing in China needs to have verifiable benefits. For example, China's recent five-month high on its "Flash" Manufacturing PMI needs confirmation. Moving from contraction to expansion in Chinese manufacturing will be key in the weeks and months ahead, not only for the domestic economy, but for neighboring Asian emergers that profit from regional trade.
For some of my clients, I am comfortable purchasing iShares Malaysia on the strength of the country's fundamentals and technicals today. Malaysia enjoys low inflation, solid domestic growth and remarkably low unemployment. Meanwhile, the ETF sports a 3.8% yield that rivals many dividend funds. Moreover, the current price for EWM is above a 50-day and a 200-day trendline.
By the same token, every asset and every asset class can depreciate rapidly. I do not take chances with client portfolios. It follows that every buy decision comes with a firm understanding of the conditions under which I would sell.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Gary Gordon reads: Real Clear Markets
On Twitter, Gary Gordon follows: Jonathan Hoenig
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