3 ETFs to watch this week
With the fiscal cliff averted, the battle is over but the war is just beginning. There are a few ETFs that may benefit from the dysfunction on Capitol Hill.
Don't drink the Kool-aid, the fiscal fight has just begun…
The fiscal cliff has simply gone on a two-month holiday, not a permanent vacation. That's how long Congress has to come up with a deal to avoiding sequestration -- the implementation of automatic spending cuts.
To add gasoline to the fire, that's the exact same time that Congress will be fighting over raising the debt ceiling! Summer 2011 Redux anyone?
Here are the three ETFs to watch this week that may remain strong despite from all this fighting:
SPDR S&P Dividend ETF (SDY)
Dividend stocks should continue to catch a bid, especially given Federal Reserve Chairman Ben Bernanke's penchant for crushing interest rates. Yield starved boomers will continue to venture into higher yielding stocks in an effort to salvage their golden years.
This ETF gives you access to the so-called "Dividend Aristocrats." These are companies that have raised their dividends for the last 25 years. The index includes such names as AT&T (T) and Johnson & Johnson (JNJ).
It currently yields 3.14% and is actionable right here at $58.16 with a $54 stop and a $64 price target.
Market Vectors Gaming ETF (BJK)
The world's falling apart, and the federal government can't pay its bills, but apparently people are gambling again. Casino stocks are starting to look interesting, and this ETF will give you exposure to such names such as Las Vegas Sands (LVS) and Wynn Resorts (WYNN).
The stock looks good right here at $35.50, with a $32.50 stop and a $40+ price target.
iShares MSCI Emerging Markets Minimum Volatility Index (EEMV)
You've got to take more risk to make more money right? Wrong! Believe it or not these lower volatility ETFs have been banging out excellent returns.
This ETF gives you a portfolio of broadly diversified low-volatility international names that was up a whopping 20%+ last year! It's a little extended right now at $60.50, but on a pull back to $58 this is one worth looking at.
I'd use a stop of $56 with a price target of $62; along with its 2.29% dividend and low volatility it's certainly one to put on your radar.
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Some investment advisers are entertaining that possibility, especially in light of Monday's triple-digit loss in the Dow.
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