ETF Trends
ETF Trends

After one month into our new year, investors had expected some big changes within the economy and exchange traded funds (ETFs); last month’s dismal performance has us rethinking which asset classes are better suited for our nest eggs.

In January, the Standard & Poor’s 500 index diminished 8.6%, its worst reported opening month performance, reports Tom Petruno for The Los Angeles Times. Investors are looking for a safer place to stash away money in corporate, municipal, and mortgage bonds.

As investors flee equities, analysts are cutting away at first-quarter estimates and they now expect a 25% decline, or double the drop previously projected.

Bonds, most notably higher yielding ones such as iShares High Yield Bond Fund (HYG), fared quite well with increased investor interest, writes Gary Gordon for ETF Expert. Whereas equity ETFs like Vanguard Total Stock Market Fund (VTI), iShares EAFE Index Fund (EFA) and Vanguard Emerging Market Fund (VWO) were harder hit.

Commodities, iPath Dow Jones-AIG Commodity Index TR ETN (DJP), also slipped but the SPDR Gold Trust (GLD) posted modest gains.

Traders are starting to question the old adage of holding stocks for the long run, but a potential investor may start easing into the market by incrementally purchasing using a moving average.” It is noted that if you find yourself in a bull market, it does not mean that you should return to buy and hold methods.

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.