With THD, watch how the fund behaves vs. what the headlines say. It has performed well on bad news days, when the casual observer would assume the stock market would be down. If investors have confidence to invest in the face of negative news, it's a positive sign.

Losers

iShares MSCI Austria ( EWO) -8.1%

Romania had a failed bond auction, and Hungary's political leaders said the country could default, claiming that the previous government lied about the true state of the nation's finances. The news also shook Poland, and the Polish currency, the zloty, fell more than 3% on Friday alone.

Among Western European nations, the Austrian banking system has the greatest exposure to Eastern European debt. Back in 2009, investors were watching Austria for signs of banking or sovereign debt problems, but the region held steady as world markets improved. These nations fell off the radar as Greece, Spain and the rest of the PIIGS grabbed attention, but now this problem is back and was responsible for the euro breaking below major long-term support levels.

PowerShares DB Base Metals ( DBB) -10.1%

Although investors are concerned about a possible slowdown in the Chinese economy, it's the strong dollar and general fear in the markets that have the industrial metals tumbling. All commodities are under pressure, with only a few notable exceptions such as gold and the already pummeled natural gas and sugar. With the broader commodity indices looking bearish, the volatile industrial metals are ripe for a dramatic drop during a global selloff, and DBB has lost 20% since April 30.

iShares Dow Jones US Home Construction ( ITB) -7.6%

Homebuilders have enjoyed a nice run in 2010 and have outperformed the S&P 500 index by about 8% following Friday's loss. Housing data were good this week, but there was some concern about a drop in mortgage applications that could translate into lower sales by late summer, if the trend continues. It didn't help that some of the bad news on Friday was jobs-related.

At the time of publication, Dion Money Management owned THD.

-- Written by Don Dion in Williamstown, Mass.

Don Dion is president and founder of Dion Money Management, 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.

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