ETF Expert

All of this talk about health care reform… and yet, very little talk about health care as a profitable sector for investors. I have discussed the extremely impressive run for biotechnology throughout the bear market, however. (See “Biotech ETFs Lift Portfolios Higher Than Broad-Based Health Care ETFs and/or “Pharma ETFs, Biotech ETFs Are Benefiting From Swine and Politics.”)

The biotech bonanza aside, the dramatic collapse of Lehman did not spell doom for Healthcare ETF enthusiasts. In fact, many Healthcare ETFs are better off today than they were 1 year ago.

While Healthcare ETFs may be pre- and post-Lehman success stories, momentum-based, cyclical bull riders may want to know how these same ETFs have done since 3/9/09. After all, most economic segments were shot like cannonballs off of the March bottom.

Arguably, Healthcare ETFs were plenty powerful off of the lows as well; two of the 5 “out-rocketed” the S&P 500 SPDR Trust (SPY) and only “big pharma” seems a little slow.

One could (and probably should) say that the slower, steadier turtle wins the race… not the fleet-of-foot rabbit. Then again, the way investors have been piling into risk, a momentum-based bullish stampede is the domain of tech and emerging markets.

So then, it all comes down to the $103 million-dollar question: Should you become more defensive with healthcare, staples and cash in anticipation of a correction… or should you keep riding ”the riskier-the-better” wave through year-end?

I know that just about everyone is expecting a correction… myself included. That sort of “groupthink” is enough to make me wonder if there’s any stopping the cheap U.S. dollar from being reinvested in stocks this year.

That said, I’m still in the camp that believes pullbacks are beneficial. In fact, if this cyclical bull is going to last for more than 12 months, we’re going to need profit-taking. Otherwise, we’d simply be watching yet another runaway train with no earthly business being on the tracks.

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.

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