It's one thing to see the 44th economy in the world (Greece) bob like a wine cork in the Mediterranean Sea, yet quite another to witness the economies of Spain and Italy crack. (Note: An ETF enthusiast must know how to implement stop-limit orders and hedges to protect his/her portfolio from a recession-based bear.)
Like Greece, Spain and Italy will have to ask for ECB bond support as well as negotiate some measure of austerity. From my vantage point, these are risks that do not bode well for smaller company stock ETFs.
Rather than chase, it seems exceptionally more prudent to stick with the established companies with the strongest balance sheets and long histories of paying out dividends. I am sticking with many of the very same assets that have defined my client portfolios in 2012.
They include dividend ETFs like Vanguard High Yield Dividend (VYM) and Vanguard Dividend Growth (VIG). They also include income producing exchange-traded funds like Guggenheim Multi-Asset Income (CVY), iShares Preferred (PFF), iShares High Yield Corporate Bond (HYG) and the more recent Market Vectors Preferred Ex Financials (PFXF).This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV