If you do want to invest, as I’m thinking about it, I think investing in ETFs is the smart way to go.

Large Cap Value

The Yacktman Fund (YACKX)
Comparing it to Fidelity Contrafund, which is considered one the top funds, I can see why Yacktman is on top: 3 year return of 8.9% is much better than -0.2% for the Fidelity fund.

Foreign Large Cap Blend

Sextant International (SSIFX)
Very good returns. Better than Marsico Global, also a top rated fund.

Fidelity Canada (FICDX)
Very good returns.

Fidelity Select Defense & Aerospace (FSDAX)
iShares Dow Jones US Aerospace & Defense (ITA)
Source: Kiplinger’s

It’s good to rebalance every year or so. It’s been a while since I’ve done it. But because we had a decent dip recently, I think it might be a good time for me to do so. Plus, I have come across some excellent Mutual Funds in the Kiplinger’s magazine — I always try to buy their yearly issue focused on Mutual Funds.

Here are some funds which I like and which I picked mostly from that issue. I’m entering trades as I’m writing this post.

Bond Funds

Loomis Sayles Bond (LSBRX)
Pimco Total Return (PTTAX)
A pair of the best and most famous bond funds, as per Kiplinger’s.

Vanguard Total Bond Market Index (VBMFX) (also available as an ETF, (BND))

Another of our favorites, same source.

Harbor Fund (HABDX)
The portfolio of Harbor more or less reflects the distilled wisdom of Bill Gross and his colleagues at Pimco. Kiplinger’s top 25 pick.

Vanguard Infaltion-Protected Securities (VIPSX) (also available as an ETF, (TIP))
For added security, it’s always have to have some TIPS.

Large-Company Funds

Fidelity Contrafund (FCNTX)
Recently reopened. Kiplinger’s Top 25.

Longleaf Partners (LLPFX)
Kiplinger’s Top 25. Impressive returns.

International Funds

Marsico Global (MGLBX)
Very good returns. Kiplinger’s top 25 pick.

Vanguard Global Equity Fund (VHGEX)
Good returns as well. I like it.

There you have it!

John Mauldin, Millennium Wave Advisors
“A healthy dose of cash and other forms of fixed income may be the best prescription for 2010.”

Mauldin recommends putting money temporarily in short-maturity corporate and municipal bond ETFs like Vanguard Short-Term Bond (BSV) and Market Vectors Short Municipal (SMB).

He sees the economy headed for a second recessionary dip later this year, and so recommends rotating into defensive funds — particularly, high-dividend-payers like Utilities Select Sector SPDR (XLU) or iShares S&P Global Utilities Index Fund (JXI).

Mauldin also likes health-care funds, especially those with biotechnology exposure such as Health Care Select Sector SPDR (XLV). He is bullish on biotech: One of the purer plays is iShares Nasdaq Biotechnology Index Fund (IBB).

“Wait for the real buying opportunity.”

Longer term, Mauldin recommends gradually shifting portfolio weights from securities of developed countries whose valuations “are out of whack” toward higher-growth markets through ETFs like iShares MSCI Emerging Markets Index Fund (EEM) or Vanguard Emerging Markets (VWO).

“Be patient and wait for markets to come to you,” he counsels. “Patience is a position, too.”

Stephen Blumenthal, President, CMG Capital Management Group
“If the recent past was the equivalent of a bungee ride, the year ahead will be more like a roller coaster. The market should continue chugging higher until April or May, when he expects a plunge, perhaps followed by another upturn before year’s end.”

“To cope with that uncertainty, it’s best to play fixed-income-based ETFs during the first quarter at least.” favorite vehicle is SPDR Barclays Capital High Yield Bond ETF (JNK)

Anticipating prolonged weakness in the U.S. dollar, Blumenthal recommends gradual acquisition of Pacific/Asia commodity producers/users represented by ETFs like iShares MSCI Pacific ex-Japan Index Fund (EPP). He finds the iShares MSCI Australia Index Fund (EWA) particularly attractive as a simultaneous play on commodity-rich Australia, its relatively strong currency, and China. A rebound in China, the world’s largest commodity consumer, should lift Market Vectors Steel (SLX) and Market Vectors Coal (KOL) as well as agriculture. CMG recommends Market Vectors Agribusiness (MOO), PowerShares Water Resources (PHO) and, for exposure to so-called soft commodities like rice and cotton, Elements/Rogers International Commodity Agriculture ETN (RJA).

“Sell the rallies and trade tactically until we get a correction,” Blumenthal advises. In other words, take profits when common measures of investor sentiment are bullish, and shop for bargains on market dips.

Thomas Orecchio, Modera Wealth Mgmt.

He uses international bond funds like SPDR Barclays Capital International Treasury Bond ETF (BWX) to balance U.S. dollar-heavy portfolios.

Even though their share prices have run up lately, developing countries have better growth prospects than developed economies, he says. Modera also is rotating into international bond funds like iShares S&P/Citi International Treasury Bond (IGOV) and SPDR Barclays Capital International Treasury Bond ETF (BWX) for fixed income, but gradually.

This year, Orecchio expects to see many more new ETFs like the IQ Hedge Multi-Strategy Tracker (QAI), which uses hedging techniques to offset risk

Sorted by 2009 Total Return

Easter European Equity (VEEEX)
98% Europe, 1% Asia, 1% Latin America

Fidelity Emerging Europe, Middle East, Africa (FEMEX)
70% Africa/Middle East, 30% Europe

SPDR S&P Emerging Middle East & Africa (GAF)
100% Africa/Middle East

Claymore/BNY Mellon Frontier Markets (FRN)
51% Latin America, 26% Africa/Middle East, 17% Europe, 6% Asia

Templeton Frontier Markets (TFMAX)
50% Africa/Middle East, 25% Asia, 22% Europe, 3% Latin America

I also think the long term the dollar does not look so good. Especially when comparing it to emerging markets.

Read on…

You can invest in emerging-markets bonds through  Pimco Emerging Local Bond (PLBDX). “Pimco invests in 15 markets, including Poland, South Africa, Mexico, and Thailand.” It’s on the expensive side, though, with an annual cost of 1.35%. I try to stay under 1%, but this might be worth the price.

For a lower cost alternative, check Wisdom Dreyfus Emerging Fund (CEW). “This exchange-traded fund, launched last summer, uses futures contracts to provide exposure to money-market rates of 11 emerging markets currencies, including the Polish zloty, Chinese yuan and Chilean peso.” Annual fee is 0.55%.

iPath S&P GSCI Total Return Index (GSP)
iShares Barclays TIPS Bond (TIP)
PowerShares DB Commodity Index Tracking (DBC)
SPDR Dow Jones International Real Estate (RWX)
Vanguard Emerging Markets Stock (VWO)
Vanguard FTSE All-World Ex-US (VEU)
Vanguard REIT Index (VNQ)
Vanguard Small Cap (VB)
Vanguard Total Bond Market (BND)
Vanguard Total Stock Market (VTI)

Reference
Kiplinger’s Magazine – 11/2009 Issue

Here are a few ETFs that do the “shorting” for you:ProShares Ultrashort ( (QQQ)) – rewards a fall in the Nasdaq;Proshares Ultrashort S&P 500 ( (SDS))- rewards a fall in the S&P benchmarkProshares Ultrashort Dow 30 ( (DXD)) – rewards the fall in the bluechip industrials.

Rydex recently rolled out eight new ETFs, half of which offer double-inverse plays on the energy, financial, health care and technology sectors. The Rydex Inverse 2x Select Sector Financial ( (RFN)) – up more than 8 percent in light Thursday trading.

Keep in mind that “shorting” can cause unlimited losses: if stocks go up, you lose. But these ETFs do limit the risk somewhat and that is a very good think.

Reference

Shorting Stocks Could Be Way to Play This Market, cnbc.com article

Here are some of the stocks and ETF that I’m currently looking at. I think technology is a good place to be in the near future. There is decent growth and the stocks do not look overpriced. I am going to have to pick on technology oriented ETF and invest in it.

Software and Technology ETFs

Software ETF ( (SWH))

iShares S&P GSTI Software Index Fund ( (IGV))

PowerShares Dynamic Software ETF ( (PSJ))

Technology Select ETF ( (XLK))

Town Sports Intl ( (CLUB))

Strong membership growth; profits should follow.