ETF Expert

In January, some of the “risk on” attitude has favored the sector that many investors love to hate. That’s right… financial stocks are back on a roll.

That said, investors may be “smart” to dislike the financial segment. Wells Fargo notwithstanding, most of the banks have put forward terrible Q4 earnings and revenue numbers. The forward guidance has been equally sketchy. And the uncertainty surrounding European financial institutions will likely drag on financial corporations around the globe at least one time here in 2012.

Truth be known, it is difficult to see a flawless execution of TARP-like protection for European banks between now and mid-year 2012. Greece may not even get its next bit of cash in March. What’s more, without a far more powerful and far more coordinated effort on protecting the debt of Italy, Spain and Portugal, a sovereign default would be far tougher for the banks than it would be for the purveyors of cigarettes, beer, peanut butter and electricity.

In David Penn’s column below, he notes that utilities and staples — segments that comprise a large portion of dividend-oriented ETFs — are off to a slow start in the New Year. Yet any correction in bank shares may indeed help dividend-paying ETFs. In this manner, one might stick with the slow-and-steady approach that reigned in 2011.

No Market For Defensive Stocks – David Penn, Forbes
Gold ETFs May Continue To Shine In 2012– Neena Mishra, Zacks
US Sector ETF Swings Attract Investors – Chris Flood, Financial Times
S&P 500 Priming For A Pullback – David Gillie, ETF Digest
Got A While? These 4 ETFs Could Double – Staff, Benzinga     

You can listen to the ETF Expert Radio Show “LIVE”, via podcast or on your iPod. You can follow me on Twitter @ETFexpert.

Disclosure Statement: ETF Expert is a web log (”blog”) that makes the world of ETFs easier to understand. Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert disclosure details here.

Tags | "defensive etfs", "sector etfs", Gold ETFs, S&P 500 ETFs