A fickle market has investors hiding safely behind cash, but Bernard Baumohl, chief global economist at Economic Outlook Group, looks to some exchange traded funds (ETFs) when the markets calm.

According to Bernard Baumohl in an interview with Ed Lin for Baron’s Online, investors should remain conservative and stick to cash while waiting out the large fluctuations. By the first quarter of 2009, investors should begin searching into equity markets because of expectations that the economy may come back to its regular rhythm in the second half.

Baumohl suggests taking a gander into homebuilder ETFs such as SPDR S&P Homebuilders (XHB), which is down 45.4% year-to-date.

ETF XHB performance

He also states that emerging countries such as Brazil, which is energy self-sufficient and has a diversified economy, is quite promising. It should be noted that current economic conditions in Brazil do not look all that peachy; the iShares MSCI Brazil Index Fund (EWZ) is down 61.2% year-to-date.

ETF EWZ performance

He is also advised to have exposure in some ETFs for gold stocks such as SPDR Gold Shares (GLD), currently down 8.3% year-to-date.

ETF GLD performance

With a new president, an overwhelming monetary and fiscal stimulus in excess of $3-4 trillion inundating the global economy, and low interest rates everywhere, it would be inconceivable that the economy could not revive growth at some point. While investors are eyeing these areas, be sure to monitor the trend lines, too. The 50-day and 200-day moving averages are lines investors can use to watch for a “buy” signal. Right now, some of these areas are getting close, but they’re not there yet.

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.