It was a mildly down week for the stock market. The
lost 0.2%, and the
Dow Jones Industrial Average
slid 0.5%. The
lost 1%, hurt by poor earnings from
and a Bank of America analyst downgrade of the chip sector.
Gold made headlines on Monday and Tuesday, but it traded sideways for the remainder of the week. the
iShares Comex Gold
gained 2.8% for the week. Housing starts grabbed headlines as well, after they fell in October, with most analysts predicting an increase. The
iShares Dow Jones U.S. Home Construction
And now for this week's ETF winners and losers...
iShares Silver Trust
PowerShares DB Silver
Silver prices have spent most of this year catching up with gold prices, but silver can still gain more than 15% before it reaches the gold:silver ratio seen in early 2008. Silver will need more weeks like this past one though. Over the past month, gold outperformed silver.
PowerShares DB Base Metals
iPath Copper Total Return ETN
iPath Industrial Metals Total Return ETN
iPath Aluminum Total Return ETN
With copper comprising one third of DBB assets and 44% of JJM, this week's copper rally helped lift these funds. Aluminum makes up another third of DBB and 26% of JJM.
The industrial metals have performed well, since they benefit from both inflation fears and increased demand during the economic recovery.
iPath Grains Total Return ETN
Market Vectors Agribusiness
PowerShares DB Agriculture
Agriculture remains popular with ETF investors, but prices have lagged other commodities. Bullish gurus such as Jim Rogers have plugged the sector and inflation fears have investors looking for any commodity that will preserve purchasing power. Crop yields are unlikely to provide the lift necessary to justify the price increases, however, opening the sector up to decline if inflation doesn't arrive in time.
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TUR's magnificent run turned into a turkey last week. Mark Mobius, manager of Templeton Emerging Markets Fund (EMF), said the country could have a correction, and the market delivered. Mobius said other emerging markets could also decline, but he also added that investors should regard the drop as a buying opportunity.
Year to date, TUR is still up 77%.
iShares Japan Small Cap
PowerShares FTSE RAFI Japan
WisdomTree Japan Small Cap
WisdomTree Japan Total Dividend
Optimistic headlines were sparked by reports of third-quarter GDP growth of 4.8% year over year, but then investors learned that prices fell by 2.6%. Much of the growth came due to the deflation, not from increased production. While this isn't a problem by itself, Japan has a large debt burden. An economy with no growth can shrink its debt burden with inflation, but an economy with no growth will increase its debt burden with deflation.
FirstTrust ISE-Revere Natural Gas
Natural gas prices sank again last week and
U.S. Natural Gas
reached an all-time low, but UNG only fell 0.8% during the week. After months of following the stock market higher, however, FCG may finally be trading in sympathy with natural gas prices.
At the time of publication, Dion was long IAU.
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.