What do you think of these ETFs?

Question

EWS, EWA, EWP, EWZ, EWW, VWO. I did a search for highest 3 yr avg annual returns and found them. They look pretty awesome to me, but i'm a novice so looking for input on using this method. I've always heard "don't chase the markets" but i've done pretty good doing that lately.....?

Answer 1

They are indeed " country specific" mostly...and a couple seem to be fading currently..( EWA, EWS)
So, my advice is similar to the other answers...diversify with broader ETF's ( EEM, EEB ) or look to more specific, but different areas: " alternative energy" ( should have a bright future) or maybe global " telecom" ( those phones and wireless gadgets are reaching the far corners of the world).
...and of course you can look into mutual funds that follow global trade...( and let a manager make moves for you in more specific areas-- remember, ETF's are " by design" invested in everything in their sector...a fund can be more specific...selling off losing holdings..and finding, or riding, some winners)
Put a certain amount in a mutual fund...( FEMKX, FLATX, EUROX, ICENX ) and take the same amount and follow the hot ETF's....see where you stand in nine months or a year.
Just a thought.

Answer 2

Chasing performance can be deadly. In 2000, you would have lost 30-50% in the top selling ETF's of the last couple of years.

A novice should only be in a well diversified portfolio with an appropriate "asset allocation". But the worse thing you can do is invest without understanding investing!

Don't be greedy. Take 6 months to a year to learn this stuff. It will save you thousands of dollars during your lifetime.

Consider yourself warned!

Answer 3

There are probably crazier things you can do with your money than buying diversified overseas ETFs. That said chasing return CAN get you into a lot of trouble...