ETF Expert Issues International Buy Signal

03/03/2015 10:00 am EST


Doug Fabian

Editor, Successful ETF Investing, ETF Trader's Edge, Weekly ETF Report, and

Although the major averages have been doing well, the real news from the Fabian Plan perspective was the new buy signal in the International Plan, explains Doug Fabian, editor of Successful ETF Investing.

That International Fund Composite, or IFC, has now closed in buy territory, giving us that much-anticipated new International Plan buy signal.

Of course, we already have some exposure to international stocks in the Growth and Aggressive Portfolios, but with the official buy signal now in place, it is time to add even more international exposure to each of our three portfolios.

Up until this new buy signal, we’ve been hesitant to add international exposure to our Income Portfolio. Now, however, the international buy is a go. I now recommend buying the SPDR S&P International Dividend ETF (DWX).

This international dividend-stock ETF has a yield of 6%, with dividends paid quarterly. It also holds some of the biggest and best international dividend-stock plays available to investors today.

In the Growth Portfolio, it is also time to add broad international equity exposure via a 10% portfolio allocation to the iShares MSCI EAFE (EFA).

Perhaps the most well-known of international equity ETFs, EFA also is one of the most widely held funds in the market today and for good reason.

This fund allows us broad, quality exposure to the best stocks in Europe, Australia, Asia, and the Far East. These are all markets we think have to potential to outperform US stocks in 2015.

In the Aggressive Portfolio, I want you to add the frontier markets. The fund I want you to buy is the iShares MSCI Frontier 100 ETF (FM).

This ETF gives you exposure to exotic markets such as those in Africa and the Middle East, as these are the dominant frontier market regions.

The fund also is volatile, but the upside of a run in this market segment is outstanding—but only for a small portion of your aggressive money—and even a smaller portion of your overall portfolio.

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