Four days... 7% gains for IWV. That's one heck of a ride!

As impressive as the 1-month-down-1-week-to-turn-it-around has been for the U.S. markets, did we see a different pattern in the emerging markets? Not entirely.

Vanguard's Emerging Market Fund (VWO) actually set its recent closing high on June 1, and it dropped a more troubling 11.4%. Yet VWO has since risen 9.3% to close within 3 percentage points of reclaiming its recent glory.

What about Asian stocks in the Emerging Asia Pacific Fund (GMF)? From its June 1 peak, it had sunk a more painful 12.5%, before gaining 9.5% to close within 4 percentage points of a high mark.

These results across all stock assets should serve as a warning shot across the bow of those who keep pressing the decoupling button. U.S. markets tend to fall less, so the smaller percentage rallies still keep U.S. markets in an enviable place of having less ground to make up.

In other words, it's one thing to recognize that true growth potential may exist in China, where 8% GDP growth is lackluster. It's another thing to look at emerging markets as free and clear from the American ties that bind.

Granted, if push came to shove, my readers know exactly where my preferences reside. (Television viewers may wish to click here to see what I had to say on Fox Business News.) The bottom line, though... there's no need to put all of my eggs in one residence.

Of course, the U.S. certainly faces a number of harrowing realities:

1. The average work week clocks in at 33 hours. That's the lowest number in more than 45 years. With people being asked to work less, from forced furloughs to unpaid leave, new hiring is less likely to occur until the people who are working today are back to working at full strength.

2. Approx 6% of the work force engages in part-time employment. Part-timers, who are not counted in unemployment figures, are the ones who typically fill future full-time spots before the unemployed.

3. Most of the $787 billion stimulus package went to cover things like jobless benefits and Medicaid. While one may believe that you have to stop the bleeding before the healing can begin, job growth typically comes from new spending on things like infrastructure. Some estimates show that only 5% of the $787 billion went to infrastructure projects.

A jobless recovery does not mean that company stock couldn't surge, however. Streamlined, highly efficient companies that produce goods and services worldwide may actually thrive. Depending on how investors look at 10%+ unemployment that could easily last into 2011, the domestic markets may yet respond favorably. (In other words, much of the damage to company share prices may already be accounted for.)

That said, I am more inclined to feel good about a country like China, where 75% of its stimulus package went directly to infrastructure and/or rebuilding the earthquake-rattled Sichuan province. Granted, there's evidence of civil unrest in provinces where laid off migrant workers couldn't find employment and ethnic clashes broke out. Yet the Chinese seem very clear about the task at hand... create work, and the people won't complain about its government.

Moreover, the middle class in China as well as Brazil continue to grow and spend. Our middle class has gone from a 0% after-tax savings rate to a fear-induced 7% savings rate.

Again, one can't simply tie a country's GDP or job growth to future stock prices. But if you had to place your money down on China ETFs or U.S. ETFs? Brazil ETFs or U.S. ETFs? Fortunately, it still makes sense to diversify by using foreign and domestic funds.

If you'd like to learn more about ETF investing... then tune into In the Money With Gary Gordon. You can listen to the show live or via podcast or on your iPod.

Disclosure Statement: ETF Expert is a web log (blog) that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.

You can view Gary's daily market commentary at www.ETFexpert.com. You can also email him directly at garygordon@mypacificpark.com.