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 blog posts from the past week:
Rare Earth Names Taking Flight
Published 4/11/2011 12:31 p.m. EDT
Investor enthusiasm for rare earth companies such as
Avalon Rare Metals
is helping to send the group higher again today. Looking to latch on to this red-hot list? The
Market Vectors Rare Earth Metals ETF
is a well-balanced product that has benefited from a distinct theme and impeccable timing.
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Having to constantly launch products on the heels of the latest investment trends, it isn't often that ETF issuers find themselves in the right place at the right time. Funds can linger for months (the
Market Vectors Indonesia ETF
Market Vectors Egypt ETF
are two good examples) or years before finding their audience or hit upon a timely theme. But then they miss the boat because of the competition. REMX, which was launched in October 2010, has managed to hit on the blockbuster formula of timeliness, focus and luck.
In the three-month period ending April 8, REMX advanced 20%, propelled by China's eagerness to limit the export of rare earth metals. REMX aims to snare popular, global rare earth firms with a modified cap-weighted methodology. Thus far, the fund has managed to provide exposure to the sector without becoming too skewed toward top components. Case in point: Top holding
accounts for less than 10% of the total portfolio.
REMX is at the top of the pack today in ETF performance, and it's likely that rare earth metals will end up in other headlines before the day is over. REMX is a timely position for aggressive investors willing to keep an eye on the industry and an ear toward the news. Fundamentals aren't the only thing driving rare earth firms, but it's difficult to miss their meteoric rise.
Still a Bull
Published 4/12/2011 12:52 p.m. EDT
First and foremost, I agree with fellow commentators Jim Cramer and Rev Shark that it is important to know your limits and change your mind when needed. Anyone trading in the short-term is constantly forming and reforming opinions as to when to buy, when to sell and when to wait it out.
In my business, I generally deal with clients who have long-term investing goals and objectives and who are looking to create a big-picture investment portfolio over time. While this may create a little space between myself and other
commentators, it is always refreshing to look at things from a different perspective and to monitor short-term changes, even if you're a long-term investor.
An example of an evolving opinion? I've been pretty bullish on the
iShares Dow Jones Transportation ETF
in the past (my last bullish post was on Feb. 8, 2011, and can be seen
here. In that post, I pointed out Obama's high-speed rail initiative and mentioned how improvements to passenger rail transportation often lead to better service for businesses. Today, when reading through the new budget highlights I noticed that the high-speed rail program is one of the projects where funding is going to be cut.
What does this mean for transports? In the short term, I believe that there could be some volatility in the sector. Looking further out, I'm still a bull and I believe that the rising cost of energy and materials (many of the railroads in IYT's portfolio are involved in transporting coal and materials) makes transports an attractive sector during the evolving recovery period.
Being honest is never a cop out. I'm simply a longer-term investor. I believe that it is still a good idea -- just as I believed when I first joined this site -- to be long U.S. equities for the long term. I believe that today's selloff is fear driven and that dips like these are buying opportunities.
At the time of publication, Dion Money Management held no positions in any securities mentioned.
The House Is Winning
Published 4/14/2011 5:16 p.m. EDT
tumbled in after-hours trading, after the company reported that rising costs are cutting into profits. While the Internet giant still posted an 18% increase in quarterly profit, investors are latching onto expenses related to hiring and investing in new businesses.
recent post, we mentioned Google's new investment in a solar energy project. Is Google extending itself too quickly and hiring too aggressively? The company's presence on the Web is still incredibly strong. As consumer confidence improves, Google's improving paid-clicks percentage should keep moving higher.
Separately, there's another consumer ETF out there with overlooked potential: the
Market Vectors Gaming ETF
. While BJK has yet to garner the kind of investor attention that makes trading easy, this ETF has a compelling theme at an interesting point in history.
The fund tracks firms in the casino and gaming industry and it has exposure to firms such as
Las Vegas Sands
, which both have successful operations in Macau. BJK gained 5.7% during the month-long period ending April 13, and momentum could keep heading higher.
Investors looking for a more liquid, consumer-driven vehicle should check out the
SPDR S&P Retail ETF
PowerShares Dynamic Food & Beverage ETF
PowerShares Dynamic Leisure & Entertainment ETF