NEW YORK (
) -- Don Dion posts his current insights on the stock, bond, commodity and currency markets in his
blog, anticipating which ETFs will be in play next.
Here are three of his blogs from the past week:
Catch the Surge in Indonesia ETF
Published 9/7/2010 7:03 AM EDT
While investors in the U.S were enjoying their long weekend, stocks were hitting record highs Monday in Indonesia, a country that is taking aggressive measures to grow and keep inflation under control.
It may not be too late to reap the rewards of Monday's surge. Investors looking to benefit from the run-up in Indonesia's market can try to capture it with shares of
Market Vectors Indonesia Index ETF
IDX, an exchange-traded fund weighted towards this emerging market's financial sector, should jump at the opening Tuesday as U.S traders make up for the day of trading abroad when U.S. markets were closed. I'd wait until after opening orders are processed to get my hands on IDX, but I think that this fund could be both a good short- and long-term trade in the months ahead. Indonesia is a rapidly growing economy in the long-term and Monday's surge will be reflected in morning pricing in the U.S. Tuesday.
In a recent interview, Indonesia's central bank chief pledged to keep rates low, allowing the country to continue to lead the global recovery. Long-term holders of IDX will know that the ETF is up an astonishing 26% year to date. I think this fund could go even higher Tuesday so international investors should take advantage of the disconnect caused by the Labor Day holiday in the U.S. and scoop up shares after opening orders are processed.
Indonesia continues to be a powerhouse among emerging markets, and the financial-heavy IDX is a good way for risk-tolerant investors to play the surge in both the long- and short-term.
Summer's Not Over for PEJ and PBJ
Published 9/10/2010 10:49 AM EDT
We may be well into September, but investors are seeing an Indian Summer (in the market) as positive employment data helps push the markets higher and shake off fears about Europe. I believe that the positive news this week will bring a measure of levity to the market and that average consumers and investors in this country will fear less and spend more.
Despite weak sales in Europe,
saw a key sales figure rise in August, with sales at restaurants that have been open for at least 13 months climbing nearly 5%. That figure may be down from July's, but it's up on a year-over-year basis and it's certainly a sign that people are out and about -- drinking the new smoothie beverages at McDonald's, evidently.
In the ETF industry, this trend has been evident for some time. Both the
PowerShares Dynamic Leisure & Entertainment ETF
PowerShares Dynamic Food & Beverage ETF
have rallied strongly in 2010 despite vocal fears about a double-dip recession and consumer behavior.
PEJ, which is up more than 15% year-to-date, tracks firms such as
PBJ, which has advanced 14.7% in 2010, tracks food firms and family chains, including
and McDonald's. Say what you want about the consumer, but things can't be all bad if they are lining up for new products and old favorites.
I believe that the improvement in jobs data and the recently seen resiliency in the U.S. equity markets will reassure U.S. consumers and investors that we're not headed for economic apocalypse. Hopefully they'll read over the most recent data with a burger in hand, enjoying a much-needed break from recent market stress.
I believe that PEJ's and PBJ's hot streaks will extend into an Indian Summer (market-style) over the next few months. It's not too late to benefit from the trend and pick up one of these unique ETFs.
At the time of publication, Dion Money Management was long PBJ and PEJ.
Play Off the Positives
Published9/10/2010 7:08 AM EDT
Positive jobs data. A solid week for U.S. indices. Stimulus. Help for small businesses. What more could you ask for? I'd ask for an uneventful trading day.
At the end of the summer and the end of a short week, I urge you to take all the positive sentiment about the jobs market into trading Friday and not react quickly to sudden intraday swings. I'd use any weakness to load up on solid exchange-traded funds that will complement your portfolio well in the long-term. I like infrastructure plays like the
iShares Dow Jones Transportation Average
Market Vectors Steel ETF
Earlier this week, it looked like the heat would be back on Europe and contagion fears would catch. But there's too much good news here, and in the emerging markets space, for investors to scare as easily. Do I think the problems in Europe are over? No. Investors will once again worry about Europe's currency and America's debt as we move toward the elections in November. Fears may be eased, but investors will continue to be quick on the trigger. If you haven't added a physically backed gold ETF like
SPDR Gold Shares
iShares Comex Gold
, now may be the time to do so. I think this metal will continue to pay off in late 2010.
Friday's session could be choppy, but I urge you to keep an eye towards the long-term and try to focus on the positive news in the jobs market. Investors have been hung up on unemployment, and perhaps this swing in statistics could bring absent investor interest back to the table. The week may have been a short one, but I believe the markets shook off negative news and picked up a lot of positives boding well for the week ahead.
Don Dion is president and founder of
, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.
Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.