I asked PowerShares to explain the small coal weighting for this article and the last one, but didn't get an answer. I don't think uranium exposure is negative, but anyone interested in the fund needs to know the reasons behind this strategy.

Investors who use ETFs to build portfolios based on industries can manage volatility by rotating exposure. When the market appears vulnerable to a large decline, (for example, when the S&P 500 Index has breached its 200-day moving average) it makes sense to cut positions in coal, oil sands or alternative energy. When the market appears to be recovering, it's time to reinstate those stocks.

Coal stocks are going to be more volatile than large oil companies most of the time. As you manage your portfolio, keep in mind that this volatility will usually be good on the way up and bad on the way down.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback; click here to send him an email.

If you liked this article you might like

These Stocks Pay You to Own Them

Dow, S&P 500 Set New Records as Fed Moves to Unwind Balance Sheet

Stocks In Negative Territory as Chances for December Hike Surge

Energy Stocks Lead a Neutral Market Even After Oil Inventories Spike

Energy Takes a Backseat as Crude Oil Stabilizes Under $50