NEW YORK ( ETF Expert ) -- Many of the major financial publications and news services are clamoring for 2011 predictions. I've already fielded requests from WSJ, Dow Jones and Investor's Business Daily.
It doesn't seem to matter that I am not, nor have I ever been, a "buy-hold-n-hoper." The media have deadlines. They want my picks. And calendar-year prognosticating is a time-honored tradition for capturing more readers. Okay... so I play the game. In fact, I played it so well in 2010, my " Lazy 7" ETF Portfolio dramatically outperformed the S&P 500. At this point, I'm ready to give a number of ETFs that should benefit from peering into my crystal ball. In fact, I'll give 5 ETFs that I like quite a bit, stop-loss limit orders notwithstanding. However, if you're looking for the "Lazy 2011 Portfolio, you'll need to wait until Dec. 31. A portfolio requires diversification through non-correlating assets, especially if it has to be held for 12 months. So for now, let me offer 5 ETFs that should benefit from a global macro-economic perspective --not as a portfolio, but as a list. (Note: In essence, this is the same list that I am providing to the financial journalists in the mainstream media.) 1. Market Vectors Coal ( KOL) 2. SPDR Oil/Gas Equipment Services ( XES) 3. iShares DJ Technology ( IYW) 4. Global X China Consumer ( CHIQ) 5. iShares Chile ( ECH) The sovereign debt crisis in Europe, Japanese deflation and pockets of economic uncertainty in the U.S. (e.g., housing, unemployment, etc.) will lead developed economy central banks to maintain "loose" monetary policies. In essence, this means the mature economies will continue endeavoring to "reflate" to support the global industrial cycle. As long as the Fed and others are reflating, early business cycle stock ETFs should be the biggest beneficiaries, from Market Vectors Coal (KOL) to SPDR Oil & Gas Equipment Services (XES) to iShares DJ Technology (IYW). Of course, the real growth is in the emerging markets... and Chinese consumerism will carry the lion's share of world GDP growth. Yet China has been tightening monetary/fiscal policy to keep inflation in check. I believe they will be successful, but in so doing, it will give fits and starts to emerging market equities. I still like Global X China Consumer (CHIQ) as a potential stock ETF for the theme.
In trading on Monday, shares of the Coal ETF entered into oversold territory, changing hands as low as $13.96 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100.