What’s the exit strategy for your ETF (exchange traded fund) portfolio? As Jonathan Bernstein of ETF Zone illustrates, some of the best performing ETFs year-to-date are emerging market ETFs. These same funds gave back 20-40% during the April-June correction. Keep a strict sell discipline and sell when an ETF goes below its individual moving average or when it has dropped 8% from its high.
The iShares MSCI Emerging Market Index(EEM) had earnings growth, a commodity boom and improved fiscal environment in its favor this year. Looking into 2007, emerging markets have a favored outlook, but beware of high volatility. With the possibility of rising interest rates and a sluggish domestic economy, the ride could be anything but smooth.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.