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iPath S&P 500 VIX Short Term Futures ETN ( VXX) 5.0%

The markets are performing poorly as European debt issues fuel investor concerns regarding the strength of the global economic recovery. In response, the fear-based VIX ETNs have recovered yesterday's losses and more.

Despite the run-up, long-term investors should continue to avoid VXX and VXZ.

iShares Barclays 20+ Year Treasury Bond Fund ( TLT) 1.9%

Economic jitters are boding well for long-term U.S. treasuries, allowing TLT to power higher. Most recently, the Federal Reserve's QE2 policy decision has weighed on TLT's performance. However, the fund has actually been in locked in a steep decline since early October as investors warm up to riskier asset classes.


PowerShares DB Base Metals Fund ( DBB) -6.0%

Base materials are tumbling as investors express concerns about the state of the global economy. While DBB is leading the way lower, weakness from the metals coupled with the broad negative market performance is weighing heavily on equity-based miner funds such as the Global X Copper Miners ETF ( COPX) as well.

Physically-based precious metals funds are trading in negative territory as well, pressuring funds such as Global X Silver Miners ETF ( SIL) and Market Vectors Junior Gold Miners ETF ( GDXJ).

Global X/InterBolsa FTSE Colombia 20 ETF ( GXG) -4.5%

Internationally, nations in the emerging world are seeing the steepest downturns today. Following the Columbia ETF lower is the Market Vectors India Small Cap Index ETF ( SCIF) and the Market Vectors China ETF ( PEK).

PEK remains a dangerously volatile option for investors looking for China exposure. Influenced by a 12% premium, it will not accurately track its underlying assets. Investors looking for more reliable exposure to the largest names hailing from China would be better off using a fund such as the iShares FTSE/Xinhua China 25 Index Fund ( FXI). PEK is down 3.6% compared to FXI, which is down 2.5%.

Market Vectors Nuclear Energy ETF ( NLR) -4.0%

The volatility of the alternative energy industry is showing today as NLR, Guggenheim Solar Energy ETF ( TAN) and PowerShares WilderHill Clean Energy Portfolio ( PBW) take heavy hits.

As I've explained in the past, companies involved in the clean energy business rely heavily on government subsidies to stay lucrative. Debt concerns such as those facing Europe threaten the future availability of these payouts thereby raising concerns about the companies' long-term outlooks.

Market Vectors High-Yield Muni ETF ( HYD) -2.0%

ETFs designed to track the domestic municipal bond market have staged a dramatic retreat in recent days as investors act on default fears and California once again mulls ways to close its looming budget gap. California munis represent the largest slice of HYD's portfolio, making up over 13% of its portfolio.

Although fixed income remains an attractive region of the markets, I would advise investors to opt for dividend paying equities and high yield corporate bonds over munis.

All prices as of 2:16 PM EST

Written by Don Dion in Williamstown, Mass.
At the time of publication, Dion Money Management did not own any of the equities mentioned.

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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