ETF Expert

Richard Shaw of the QVM Group compiled an excellent review of asset classes at the half-way point in August, 2009. Specifically, Mr. Shaw analyzed domestic, foreign and emerging market bonds and stocks, as well as trends in currencies and commodities.

In spite of questionable economic progress around the world, most market-based ETFs are trending definitively higher. In essence, 9 of 14 representative ETFS are moving higher above their 200-day moving averages for the last 2 weeks; 3 are trending lower and 2 more are flat.

Explaining the 9 uptrends is relatively simple: Investors are willing to take on risk in the stock and bond markets due to improving economic conditions; the improvements that are particularly ”heart-warming” include increasing business access to credit and government-stimulated GDP.

Naturally, there will be pullbacks, corrections and profit-taking. Yet money managers are increasingly putting investment dollars to work on the dips. One should have a “Buy List” ready to go when uncertainty takes riskier assets low enough to meet an attractive entry point.

Even the  weakness in the U.S. dollar where a downtrend exists, as well as weakness in the U.S. treasury component of the U.S. bond market, are signals that investors have been more willing to move up the risk scale. Fear has been fizzling.

And yet, there are a few curious areas where worry is still the name of the rose. For instance, the concern that commercial real estate is a diseased petal on the flower has kept investors from fully embracing real estate investment trusts. Similarly, gold bugs have yet to give up on their precious metal safe-haven/inflation fighter, as it remains approx 5% off a 52-week high. (Review “The 3 Big Changes Investors Have Been Making.”)

There is only one area where investors haven’t been taking on as much risk… and that’s with commodities. In particular, crude oil, natural gas and a variety of metals have seen a bit of selling pressure. With the exception of amazing gains for sugar, it seems that the inflation/deflation debate is keeping some money out of most commodities.

Commodities via PowerShares DBC

If you’d like to learn more about ETF investing… then tune into ”In the Money With Gary Gordon.” You can listen to the show “LIVE”, via podcast or on your iPod.

Disclosure Statement: ETF Expert is a web log (”blog”) that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.

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