Tom Lydon of ETFTrends.com tells us he's expecting some big changes in the year ahead, and as a result investors may want to make big ETF moves!
Lydon tells the desk he sees one of two possible scenarios playing out next year. The first is inflation and higher interest rates largely due to all the stimulus money going to work. As a result he sees unemployment going down and economic growth going up.
Scenario #1: Inflation & Higher Interest Rates
-Buy Powershares Dollar Bull ETF (UUP)
-Buy Short 20 YR Treasury ETF (TBF)
-Buy Vanguard Short-Term Bond (BSV)
- Buy Consumer Staples ETF (XLP) Source: Tom Lydon, ETF TrendsAll of these ETFs should do well in a higher interest rate environment, explains Lydon.
The second scenario is a bit more ominous. Lydon foresees the possibility of higher prices without much economic growth, a condition known as stagflation. It was something prevalent in the 1970’s as oil price rose dramatically while unemployment remained stubbornly high.
Scenario #2: Stagflation
-Buy SPDR Gold Shares ETF (GLD)
-Buy iShares Barclays TIPS Bond ETD (TIF)
- Buy Vanguard EM ETF (VWO) - Buy iShares EM ETF (EEM)
Source: Tom Lydon, ETF TrendsPage 1 of 3 | Next Page