By The Sizemore Letter<\/u><\/p>\n
Two macro themes that have been plaguing the market this summer should be reaching their conclusions this month: the Syria War and the long-awaited tapering of quantitative easing.<\/p>\n
I\u2019ll start with Syria.\u00a0 The civil war has been raging for more than two years, and I am not suggesting that it is anyone close to being over.\u00a0 But the Western response to the use of chemical weapons by the Assad regime could be launched within the week.<\/p>\n
Should we fear a long and drawn out war?\u00a0 No.\u00a0 As I wrote this week<\/a>, the goal of the United States and France is to punish Assad, not remove him from power.<\/p>\n Will he retaliate?\u00a0 I doubt it.\u00a0 He\u2019s winning his war, and I don\u2019t see him being foolish enough to put his regime at risk.\u00a0 And the West has no stomach for a drawn-out engagement.<\/p>\n For investors, I expect developments in Syria to be non-events.<\/p>\n What about the Fed\u2019s tapering?\u00a0 Once it begins, won\u2019t it suck out the liquidity that the bull market has depended on?<\/p>\n Not likely.\u00a0 In the absence of real information from the Fed, bond investors have decided to sell first and ask questions later, essentially pricing the worst-case scenario \u00a0into bond prices.\u00a0 When the Fed shows its cards (presumably at its meeting this month), I expect bond yields to fall as tapering proves to be less bad than feared.<\/p>\n Great.\u00a0 Now, what are we supposed to do with this information?\u00a0 I expect the market to trade in a choppy range until there is guidance from the Fed and until the Syrian crisis has passed. This give us an opportunity to accumulate the highest-quality equities that have seen their prices sag this summer.<\/p>\n A great ETF option is the Cambria Shareholder Yield ETF (<\/span>SYLD<\/a>)<\/span><\/b>.\u00a0 SYLD is an actively managed ETF that invests in 100 stocks with market caps greater than $200 million that rank among the highest in (<\/span>a<\/a>)<\/span> paying cash dividends, (<\/span>b<\/a>)<\/span> engaging in net share repurchases, and (<\/span>c<\/a>)<\/span> paying down debt on their balance sheets.<\/p>\n Any of these criteria alone would be a good screen for quality, good management, and shareholder friendliness.\u00a0 Taken together, and SYLD becomes a veritable super-ETF.<\/p>\n SYLD is not an ETF I recommend you actively trade.\u00a0 There are better options out there for short-term market timing, and SYLD is a new security with somewhat thin trading volume.\u00a0 But for the portion of your portfolio invested in long-term growth assets, SYLD should feature prominently.<\/p>\n I added SYLD to my Tactical ETF Portfolio<\/b><\/a> earlier this summer, and I continue to recommend it on any pullbacks.<\/p>\n This article first appeared on TraderPlanet<\/a>.<\/p>\n Charles Lewis Sizemore, CFA, is the editor of the\u00a0Sizemore Investment Letter<\/a>\u00a0and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he was long SYLD.\u00a0Click here<\/a>\u00a0to learn about his top 5 global investing trends and get your copy of \u201cThe Top 5 Million Dollar Trends of 2013.\u201d<\/em><\/p>\n This article first appeared on Sizemore Insights as SYLD: An ETF to Accumulate on Market Pullbacks<\/a><\/p>\n