While we can’t predict what exchange traded funds (ETFs) will do, it’s interesting to look at their trends. One source for this is through the "Stock Trader’s Almanac." Generally speaking, the "Stock Trader’s Almanac" says that from November to January is when stock asset gains occur, technology is popular in the fourth quarter and October is bearish, says Gary Gordon for ETF Expert.
Heading into our "bearish" month, some experts have warned against ETFs that are associated with the dramatic housing slump, such as SPDR S&P Homebuilders Fund (XHB). It’s down 40.5% year-to-date. Another ETF that is going through a rough spell is the Consumer Discretionary SPDR (XLY), which is down 2.2% year-to-date.
Despite the bearish talk for October, the Dow Jones industrial average hit a new high on the first day of the month. Several sectors are doing well or are trending upward, such as financials and technologies. Consider some of these ETFs and their year-to-date performance:
- iShares S&P Global Technology (IXN) – up 16.3%
- iShares S&P Global Financials (IXG) – up 1.2%
- Internet Infrastructure HOLDRs (IIH) – down 6.2%
- Ultra Technology ProShares (ROM) – up 12.2% for the last three months, having launched in January
- Claymore/Clear Global Exchanges, Brokers/Asset Managers (EXB) – up 7.3% for the last three months, having launched in June
- Ultra Financials ProShares (UYG) – down 7.3% for the last three months, having launched in January
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.