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Strategies & Market Trends : Value Investing

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From: E_K_S	1/9/2008 3:01:27 PM
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Started a small position in two different ETF; ENERGY SELECT SPDR (AMEX:XLE) and iShares MSCI Brazil Index (EWZ). I repositioned some mutual fund money that was in U.S. dividend and growth funds. I want to build up these two ETF stocks as I believe these sectors will outperform the S&P over the next few years. Both pay a small dividend quarterly which yield around 1%. finance.yahoo.com^gspc;charttype=line;crosshair=on;logscale=on;source=undefined You can also buy and sell options on these ETF's so if you want to generate more income, you can write covered calls on a portion of the holdings. The expense ratios are lower than my mutual funds (0.24% for the XLE and 0.68% for the EWZ). These ETF's should also provide some additional portfolio diversification from the specific stocks I own in these sectors. Market sentiment for both these sectors seems to be a bit "bearish" with a high Put/Call ratio of 1.68 for XLE and 2.50 for EWZ. However, recently it seems like many of the stocks I follow are out of favor. I betting the more negative the sentiment now the bigger the bounce on any sustained bull run. EKS

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