Because I do not believe that a 2012 collapse is inevitable, and because I protect all assets with stop-limit orders and/or hedges, I am far more inclined to pursue the risk-reward associated with emerging-market bonds.

To the extent European and China uncertainties exist, I favor dollar-denominated vehicles like PowerShares Emerging Market Sovereign as well as iShares JP Morgan USD Emerging Market. If the Fed goes "all-in" on reflating/currency debasing with a shock-and-awe level QE3, look for outperformance from local currency debt funds like Market Vectors Emerging Market Local Currency.

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Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

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