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3 ETFs That Should Prosper for Investors in 2014

The Fed's policy means opportunity in 2014

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Perhaps if the White House and Congress pressure the banks to lend to less qualified applicants, bank profits will grow and consumers will be giddy with the extra dough. Of course, these are the same types of “community reinvestment” issues that occurred leading up to the financial collapse circa 2007-2009.

As I wrote in a a previous column, I would be more comfortable with regional banks than the big boys. Primarily, they understand that they are not too big too fail, so they tend to be smarter about the quality of the loans that they add to their books. Investors might be wiser to pursue SPDR S&P Regional Banking (KRE) over SPDR S&P Bank (KBE) or SPDR Sector Financials (XLF).

Moreover, with or without a 2014 correction, I expect brokerages to reap the rewards of stock and stock ETF inflows. iShares U.S. Broker-Dealers (IAI) could be a venerable pick-up on a pull-back to its 50-day trendline.

IAI 50 Day

The Fed’s determination to keep rates relatively subdued, even as it is curbing dollar creation, may be more beneficial to dollar-hedged foreign equity funds. In particular, funds like WisdomTree Hedged Japan Equity (DXJ) and WisdomTree Hedged Germany Equity (DXGE) are attractive from a valuation basis as well as a currency basis; expect the yen and the euro to depreciate against the dollar.

DXGE 2 months

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Disclosure StatementETF Expert is a web log (”blog”) that makes the world of ETFs easier to understand. Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc., and/or its clients may hold positions in the ETFsmutual funds, and/or any investment assetmentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationship.

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