Moderate Risk Investors May Prefer A Conservative ETF Portfolio
By Gary Gordon: With earnings of $101 per share and the S&P 500 trading at 1320, the P/E for the popular benchmark is a mere 13. Even the 2.0% dividend for the S&P 500 SPDR Trust (SPY) is more impressive than the 10-year treasury yield of 1.77%. Do valuations even matter? Apparently, few seem to care when European stress indicators are on the rise. Consider the popularity and profitability of ProShares UltraShort Euro (EUO). Not only has the euro depreciated 15% in value over the previous year, but “ultra-shorting” has earned traders 14.5% in just three months.
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There are some indications, however, that business sectors less sensitive to economic cycles are already bouncing back. Since the lows of May 18, PowerShares Dynamic Pharma (PJP), SPDR Select Sector Consumer Staples (XLP) and SPDR Select Sector Utilities (XLU) have recovered short-term, 20-day moving averages. In fact, PowerShares S&P 500Complete Story »