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3 Ways ETF Investors Can Approach an Erratic Stock Market

Here are defensive ETF strategies for a new market reality

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3. Multi-Asset ETFs. If you believe like I do that the 10-year yield will be closer to 2.75% by year end, as opposed to the economist average of 3.4%, then you will probably be able to count on the income stream from multi-asset income producers like First Trust Multi-Asset (MDIV). Granted, MDIV has demonstrated a potential for erratic price movement of its own. Yet even when the 10-year spiked form 1.4% to 2.75% in 2013, MDIV’s drawdown of 8% was offset by an index yield close to 6.5% and capital appreciation when rates later stabilized. I would not expect MDIV to do much but offset losses if the 10-year yield does climb to 3.4%-3.5% by year’s end; that said, MDIV has the chance to repeat its performance of 10% annualized total return if 10-year yields remain contained below the 3.0% mark.

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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 asset mentioned 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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