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Are Defense Sector ETFs A Post-Sequester Bargain?

However, in 2013, the PPA:SPY price ratio demonstrates that the relative strength of the defense sector is weakening. This may largely be attributed to apprehension about imminent cuts to defense spending.





By the same token, the investment community has been chomping at the bit to buy the proverbial dips. Corrections may be short-lived, if for no other reason that inaction on the part of congressional leaders may translate into continued stimulus from the Federal Reserve.

The selloff in PPA and ITA may be harsher and more severe than the market at large, but it may also provide trend-followers with an opportunistic purchase. If you see an opportunity to get PPA at a price that is 10% lower than it is today, you might benefit by seizing the day.

As always, use a stop-limit loss order to minimize the risk of continued selling pressure.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

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