Risk management is vital when the market is bouncing around close to an all-time high. As we enter this week of investing, here is the latest ranking of a list of critical ETFs. Avoid International REITs (RWX), Gold (IAU), Emerging Markets (VWO), and a few other securities that are lagging SHY.
ETF Rankings: Based on the latest Cluster Weighting Momentum (CWM) model, the following ETFs are favored and recommended for purchase. They are: UNG, QQQ, VSS, VNQ, DBC, LQD, JNK, and BWX. The latter three are bonds and are included to provide portfolio diversification. As mentioned last week, Domestic REITs (VNQ) is “new” to the better performer list after many weeks of poor performance. It is good to see VNQ back in the good graces of CWM, particularly for those of us who can use income.
Be careful if considering UNG as it may have had its best run. I classify UNG as a commodity.
My general concern is the large number of ETFs that carry a negative absolute acceleration or momentum. This means ETF prices are slowing in the rate of growth, indicating the market cooling.
A review of the Schrodinger was published earlier this morning. Later this week I will review the Bohr and Galileo portfolios.