This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

3 ETFs That Can Hold Up Under Pressure

NEW YORK ( ETF Expert) -- With S&P 500 stocks approaching all-time highs daily, it may be more instructive to look at potential hedges and "diversifiers."

Here are three ETFs that are less likely to receive accolades when investors are smitten with Google (GOOG) and Gilead (GILD) .

1. iShares Silver Trust (SLV). Over the last year, SLV has served as a fine diversification vehicle due to its low correlation (0.38) with the S&P 500 SPDR Trust (SPY). And over the last six months, SLV has been an admirable hedge against a stock market decline (-0.50).

Ye,t there's one statistical relationship that may make silver a solid longer-term investment... its 10-year .92 correlation with the national debt. In other words, as long as the national debt increases, so should the price of silver.

Many people believe that the U.S. will never be able to pay down the national debt, that we can only push back the day reckoning. They argue that electronic money printing and/or quantitative easing merely allows the U.S. government to borrow inexpensively until a catastrophic event (e.g., war, hyperinflation, European-style debt crisis, civil unrest, crash, default, etc.) restructures the entire economy.

It's hard to argue that our national debt will go down over the next 10 years. It follows that -- end of days or no end of days -- correlation data demonstrate silver's precious nature in a rising debt environment. Equally compelling, SLV has remarkable support at a price point of $25.

2. iShares Global Consumer Staples (KXI). One of the issues that face the "reluctant bull" is the reality that the tried-and-true U.S. consumer staples sector is hardly cheap. There may be safety and income for those who own Procter & Gamble (PG), Pepsico (PEP) and Colgate Palmolive (CL) via SPDR Select Consumer Staples (XLP), but unforeseen dollar weakness or a shift to foreign equities could cause underperformance.

One way to diversify some of that risk is to "go global." Adding Nestle, Unilever (UL) and British American Tobacco (BTI) to the mix involves hedging in non-dollars (roughly 50%) as well as benefiting from foreign mega-brands.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs