NEW YORK ( ETF Expert) -- In recent weeks, stock market volatility has been rising due to uncertainty surrounding whether or not the Federal Reserve would curb its money-printing-for-bond-buying program. Yet, this week's data, coupled with comments by Fed officials, should have assuaged fears related to the tapering of those bond purchases.For example, U.S. manufacturing data via the Institute of Supply Management (ISM) logged its worst reading in four years. Similarly, the folks at Bespoke presented research that showed positive economic surprises at a 15-year low. Who is going to claim that the economy is on solid footing with stats like these? Meanwhile, a governor of the Federal Reserve's board publicly expressed that the 7.5% rate of unemployment understates the scope of the unemployment dilemma. Similarly, Fed Bank of Atlanta President Dennis Lockhart reaffirmed the central bank's commitment to emergency stimulus. So why have erratic price swings persisted into June? Why is the CBOE S&P 500 Volatility ( VIX), also known as the "fear gauge," still pushing higher?
Second, do not get caught holding every ETF in your investment basket. If you employ stop-limit loss orders to secure a big gain, small gain or small loss, honor them. For instance, a 9% stop on iShares FTSE NAREIT Mortgage REIT ( REM) created an order to sell near $14.25. While there are plenty of reasons to expect REM to recover and to restore its uptrend, the biggest mistake any investor can make is to fall in love. Honor the stop-limit order to avoid a big loss, park the proceeds and evaluate a wide range of possibilities on your ETF "wish list."
Third, if you believe that economic weakness will be enough of a headwind, be patient in the redeployment of your cash. I am comfortable with dipping toes into low-beta waters, especially if those waters are less tethered to the economic cycle. The iShares High Dividend Equity Fund ( HDV) is high on that list. Follow @etfexpert This article was written by an independent contributor, separate from TheStreet's regular news coverage.