Just the type of an article I like in the latest Barron’s, The Best ETF Bets for 2010
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 and .
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 or .
Mauldin also likes health-care funds, especially those with biotechnology exposure such as . He is bullish on biotech: One of the purer plays is .
“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 or .
“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
Anticipating prolonged weakness in the U.S. dollar, Blumenthal recommends gradual acquisition of Pacific/Asia commodity producers/users represented by ETFs like . He finds the 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 and as well as agriculture. CMG recommends , and, for exposure to so-called soft commodities like rice and cotton, .
“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 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 and for fixed income, but gradually.
This year, Orecchio expects to see many more new ETFs like the , which uses hedging techniques to offset risk