The rally fizzling as much as 5% this week put the dreaded but not unexpected correction into the forefront of the market’s mind. But rather than fret, investors should be filling out their shopping lists. After all, stocks have never moved in a straight line and — more important — the whole point is to buy low. So while the current retreat after a remarkable two-month rally might be a bit unnerving, professional investors say it’s also making some appealing plays cheaper by the day.
“We’re thinking 9500 to 10000 on the [Dow Jones Industrial Average] would not be out of the realm of possibility in this bear-market rally,” says Dean Barber, president of Barber Financial Group, a Lenexa, Kan., wealth management firm. “But we’re anticipating a pullback to somewhere in the 7800-range. At that point in time we think there’s going to be some opportunities.”……
- Brazil and China:
Clark likes the iShares MSCI Brazil (EWZ) and iShares FTSE/Xinhua China 25 (FXI) ETFs. “If you missed Brazil or China, you need to be looking for it,” he says. “Anytime Brazil [EWZ] goes below $46 you need to be in.”
- Small-Cap Growth:
Rubino Financial Group, says small-cap growth is his favorite area after emerging markets, “and I would like it even more if it pulled back 10%.” With an expense ratio of just 0.11%, the Vanguard Small-Cap Growth (VBK) ETF offers cheap, broad exposure to this asset class.
Keith McCullough, chief executive of ResearchEdge, a New Haven, Conn., research firm, is advising clients to go long on the SPDR Technology Select Sector (XLK) ETF, noting that another big potential catalyst is that tech benefits from the various stimulus packages enacted throughout the globe.