NEW YORK ( TheStreet) -- Don Dion posts his current insights on the stock, bond, commodity and currency markets in his RealMoney blog, anticipating which ETFs will be in play next. Here are three of his blog posts from the past week:
A September to RememberPublished 9/30/2010 2:54 p.m. EDT Stocks could still slog their way back into positive territory today, but as we close out the month, the most important thing to remember is the big picture. Even if today's action feels like an unwelcomed rollercoaster ride, consider the fact that stocks are set to finish the month with strength: the S&P 500 had its best September performance since 1939. Here are some other positive moves to keep in mind: GDP improved to 1.7%, personal income increased, jobless claims dropped slightly (not as much as we may have hoped), the Chicago PMI exceeded expectations by improving to 60.4 and stocks set a four-month high this morning. > > Bull or Bear? Vote in Our Poll But the recent strength hasn't been enough to get many investors out of the "fear trade." I expect that we'll see this trend reflected in the September National Stock Exchange ETF data. We will likely see that there was improvement in some equity funds but that there is still plenty of demand for fixed-income funds such as iShares Barclays TIPs ( TIP) and hard-asset vehicles such as SPDR Gold Shares ( GLD). How long will it take before everyday investors feel confident enough to dip their toes back into U.S. equities? (I keep hearing a lot about emerging-market debt and the corresponding PowerShares Emerging Markets Sovereign Debt Portfolio ETF ( PCY) and the iShares JP Morgan USD Emerging Market Bond ETF ( EMB).) I expect that we'll have to get through the November elections and get some answers about the impending tax cuts -- a huge psychological hurdle for many investors right now -- to find out the answer to that question. But you don't have to wait for the masses to play a part in this recovery. Rather than waiting for everyone to join the rally, slowly dial up your U.S.-equity exposure through ETFs. Remember, remember, the month of September, especially if things get choppy at the beginning of next month. At the time of publication, Dion Money Management held no positions in the stocks mentioned.
A Better Way to Play the Oil DrillersPublished 9/29/2010 12:02 p.m. EDT The iShares Dow Jones US Oil Equipment Index ( IEZ) had an impressive (if volatile) performance this morning, and the oil-services subsector looks promising in late 2010. While IEZ is leading the pack of oil-service ETFs today, I'd encourage investors to check out SPDR S&P Oil and Gas Equipment and Services ETF ( XES) instead. As a cap-weighted fund, IEZ is extremely top heavy, allocating more than 17% of its underlying portfolio to Schlumberger ( SLB). In the wake of the BP ( BP) disaster, it has become pretty clear that you don't want to stake all your energy exposure on one firm -- it is better to use a fund that mitigates security-specific risk. XES uses an equal-weight methodology so that investors have minimal risk when it comes to swings in single components. XES' top five components -- Pride International ( PDE), Superior Energy ( SPN), McDermott ( MDR), Transocean ( RIG) and National Oilwell ( NOV) -- comprise just 4.32%, 4.32%, 4.12%, 4.11% and 4.11% of the underlying portfolio, respectively. By spreading out assets among 27 underlying holdings, XES' construction helps to minimize the risk of blowups. A recent report showing that crude supplies are lower than expected should continue to help energy subsectors involved with this commodity in the weeks ahead. As we move into winter and people in the U.S. begin to fire up their heating, XES should continue to benefit from the season shift as well as the lower-than-expected oil supplies. At the time of publication, Dion Money Management had no positions in stocks mentioned.