ETF Sectors React To Budget Impasse
Pacific Park Financial Inc. | Sep 25, 2013 02:01PM ET
It has been five trading days since “no-taper” euphoria has passed. In that time, U.S. stock assets have been falling, though the declines have been modest. Most investors continue to believe that a last-minute deal will be struck and that a bearish retreat like the 2011 correction is improbable.
Nevertheless, different economic sectors appear to be responding differently to the current landscape. And while previous blueprints for budget uncertainty may have favored non-cyclical segments such as health care and consumer staples, old-school rules may not be applicable.
Granted, assets like SPDR Select Sector Materials (IJS ). I am also “overweight” tech at this time with funds like Vanguard Information Technology (VGT) or First Trust NASDAQ Tech Dividend (TDIV). That said, like Mr. Buffett, I have been patient for months with some cash on the sidelines. I would be willing to buy into meaningful market weakness. However, if long-term trends break and stop limit loss orders hit, clients may have even more cash to protect against catastrophic bear-market losses.
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