Add to that the fact that many traders and investors are thinking about the waves in the ocean instead of their portfolios, and the end result is markets trading in a tight range.
It could be this way for awhile, but you’re not helpless. Just pick your spots and look for those areas that are delivering. We’ve found a few recently:
SPDR Barclays Capital High-Yield Junk: Don’t let the “junk” name throw you off — junk is anything but, right now. Issuance of these bonds is now 45 percent ahead of last year’s total at this time. In a low-yield environment, investors are easily seeing the appeal of these funds. JNK itself is yielding 9.7 percent.
SPDR S&P Dividend and
WisdomTree Emerging Market SmallCap: Both of these funds are delivering in terms of both yield and performance these days, reflecting the general strength seen in dividends. Companies are currently sitting on a lot of cash – Russell 3000 companies have $2.9 trillion in their hands, up 19 percent from a year ago. This has turned into an increase in dividends – 15 percent of those companies raised them in the second quarter, double a year ago.
iShares Dow Jones Transportation: Earnings season has delivered for this sector, and FedEx, one of the sector’s biggest players, gave a bullish forecast for the rest of the year after observing that shipping activity and global demand is beginning to pick up. Railroads are reporting a pick-up in business, as well. Transportation is a direct play on the recovery, since more goods and products need to be shipped as consumer spending resumes.
Tom Lydon is the editor of ETF Trends and author of iMoney: Profitable ETF Strategies for Every Investor.