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

ETFs Let You Invest With Your Head, Not Your Heart

Then came the U.S. debt downgrade. After that, the eurozone appeared to teeter on the brink of survival. All of a sudden, stock exposure to "emergers" had become a liability.

Perhaps obviously, my heart still felt that Malaysia, through EWM, was a strong contender for emerging market exposure. Yet, I am not, nor have I ever been, a buy-n-holder. So when EWM fell below and stayed below its 200-day moving average -- when it simultaneously hit stop-limit loss orders -- it was time to let go. My approach to risk management for the past quarter century has always been to control the outcome of every investment by securing a big gain, small gain or small loss; I actively manage against experiencing a big loss.

It is not that I predicted Malaysia's struggles in the years that followed. My heart believed that Southeast Asia offered compelling opportunity. However, my head has always held firm to an investing principal of controlling what can be controlled. Keep costs low, mind the cash flow (yield) and celebrate liquidity. ETFs make it possible to do all of these things.

EWM has still not reappeared on my "wish list screen." By unemotionally selling EWM in August 2011, I had the world of different ETF assets to consider buying as well as an opportunity to ride out the euro-zone crisis with a heavy dose of cash. My heart might have wanted to see all of the ducks line up again for Malaysia in the years since - technical uptrend, relative strength, economic growth, fundamental value - but they have not. (At least not yet.)

The questions many may have at this moment are, "So what are you currently invested in?" and "What's on your wish list?" Some of those answers can be found in the feature, Positioning Your Portfolio For 2014.

Must Read: When Exchange-Traded Investments Recover

Nevertheless, it's worth noting that since the start of the year, I have added iShares MSCI New Zealand (ENZL)to a number of client accounts for a combination of factors including, but not limited to: (a) improved economic growth, (b) yen carry trade beneficiary, (c) 4% annualized yield, (d) technical uptrend and (e) sector diversification.

Similarly, there are a number of yield-oriented income investments in the muni and corporate credit space that I have added to a variety of portfolios here in 2014, including BlackRock Muni Assets (MUA) and Guggenheim BulletShares 2020 High Yield (BSJK). Bear in mind, the "rates can only go up" argument has been largely one-sided.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Certified Financial Planner Gary A. Gordon, MS, is the president of Pacific Park Financial, an SEC-registered investment adviser in California. He has more than 23 years of experience as a personal coach in ¿money matters,¿ including risk assessment, small-business development and portfolio management, and has taught finance in Mexico, Singapore, Hong Kong, Taiwan and the U.S. He wrote the draft copy for ¿Maverick Investing,¿ a McGraw-Hill publication, and writes commentary for Seeking Alpha in addition to ETF Expert, for which he also hosts the ETF Expert Radio Podcast.
2 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 $94.99 0.00%
FB $99.54 0.00%
GOOG $678.11 0.00%
TSLA $148.25 0.00%
YHOO $26.82 0.00%


Chart of I:DJI
DOW 16,014.38 -12.67 -0.08%
S&P 500 1,852.21 -1.23 -0.07%
NASDAQ 4,268.7630 -14.99 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs