NEW YORK ( ETF Expert) -- "I've never seen this in 34 years of investing," quipped TheStreet's Jim Cramer earlier this week.What was Cramer referring to? For the most part, he expressed excitement over the stock market's ability to reward stocks of companies that missed earnings expectations as well as to reward those that beat expectations by not taking profits. In other words, regardless of what a corporation has already achieved or anticipates achieving going forward, investors are buying indiscriminately. Need proof that everything is a winner? Take a look at a three-year chart involving the S&P 100. In bullish rallies, one expects the majority of stocks in a major index like the S&P 100 to gain ground in an uptrend. The percentage of S&P 100 stocks that climb above and stay above a long-term 200-day trendline might be 70%, 80%, maybe even 90%.
I do not know when the markets will decide that 1% revenue growth eventually hinders future earnings. I cannot predict when short-sellers and profit takers will make bearish prognosticators appear brilliant. I certainly do not know if Europe's deepening recession or the next Federal Reserve statement or the ongoing currency wars will be at the root of the next stock market correction. Nevertheless, pullbacks are as inevitable as a disgruntled relative complaining at a family get-together. It's going to happen. I recommend that an ETF enthusiast put together a list of stock ETFs that he/she would like to own if the prices were 5%, 10% and/or 15% lower. At a 5% discount from current prices, I like investments such as iShares High Dividend Equity ( HDV), iShares MSCI Emerging Market Minimum Volatility ( EEMV) and GlobalX Super Dividend ( SDIV). At a 10% discount from current prices, I might consider broader market assets like iShares Mid Cap Value ( IWS), WisdomTree MidCap Dividend ( DON) and iShares MSCI Hong Kong ( EWH).
And at a 15% discount, when one needs to recognize the genuine possibility of a correction becoming a ferocious bear, I may be keen on those stock ETF assets that held up significantly better under fierce volatility and negativity. In all instances, I will employ stop-limit loss orders to protect against the possibility that losses accelerate. Follow @etfexpert This article was written by an independent contributor, separate from TheStreet's regular news coverage.