This Day On The Street
Continue to site
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

Alpha-Oriented ETFs in a Beta-Dominated Stock Market

NEW YORK ( ETF Expert) -- If I spent more time on Twitter, I might react to media commentary as follows:

1. Fundamentals? LOL! RT @YahooFinance. Investors now concentrate on fundamentals after weeks when Federal Reserve policies dominated markets.

2. Did not matter in Q1. RT @CNBC. This might be time when the market takes its lumps for not showing real sales growth.

3. Raising rates and strengthening currency? Better run to Japan or U.S. RT@DowJones. Turkey Signals Interest-Rate Rise.

One of the few market watchers who is calling a spade a spade is technical analyst, Walter Zimmerman. He said, "... we're in the terminal stages of a Bernanke-driven bubble." I won't say that I agree with the notion that we have entered the terminal stages -- that may be far too bearish an assessment. Yet Bernanke-driven bubble hits the center of the dartboard's bulls-eye.

The macroeconomy is barely expanding. Gross domestic product (GDP) over the last three quarters has been roughly 0.4%, 1.8% and 1.1% -- so slow that one has to question those in the economic improvement camp. The microeconomic corporate picture is experiencing deceleration in profits and stagnation in sales. Why should stock prices climb any higher with weakness in actual results as well as guidance that is likely to be particularly guarded? (Silly me, I forgot that the Fed intends to remain ultra-accommodative for the foreseeable future.)

One thing that Zimmerman missed in his descriptive phrase "the Bernanke-driven balloon" is the reality that Bernanke (or a successor) will only receive an appointment for a second term if he/she continues voting in favor of QE.

Congress will not pass any stimulus bills before the November 2014 election. Heck, it could not even avoid sequestration. And that means ... the Federal Reserve is the only game in town -- the only body capable of propping up real estate, stock prices and big-ticket items like auto.

So if earnings mean very little, and if the Fed has no intention of slowing down bond purchasing or altering ZIRP (zero interest rate policy), do you stay aggressively allocated to U.S. stock ETFs? Do you hunt for bargain ETFs, or stick with the most popular names such as S&P 500 Trust (SPY) and Vanguard Total Market (VTI)?

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $117.81 0.00%
FB $105.45 0.00%
GOOG $750.26 0.00%
TSLA $231.61 0.00%
YHOO $32.94 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs