Tag: ETF Investing

4 ETFs You Should Start To Buy

Posted on by Matt Thalman

Over the last few weeks, we heard first-quarter earnings from some major US companies. And while most of the earnings reports only gave a small glimpse of how the economic shutdown has affected their businesses, some companies performed much better than others. The companies one would expect to struggle when non-essential companies were forced to close and Americans were told to 'stay at home' obviously struggled. However, the technology companies that are allowing us to purchase products and have them delivered to our front doors, the companies that are allowing us to communicate with friends and family remotely and the infrastructure firms who offer the back-bone for millions of Americans to successfully work from home, well those companies are doing great, maybe better than ever.

So, let's take a look at some ETFs that hold those companies and one that may be a little outside the box but could be focused on one industry that could be a huge winner from 'stay at home' orders.

The first is the First Trust Dow Jones Internet Index Fund (FDN). FDN invests in a market-cap-weighted index of the largest and most liquid US internet companies. The FDN has 43 holdings, all of which are US-based companies. Its top 10 holdings make up 48% of the fund and the weighted average market cap is $214 billion. The fund has an expense ratio of 0.52%. Amazon, Facebook and Netflix are its three largest holdings and if Alphabet's stock wasn't split into two classes, that would likely be in the top four of FDN. The fund is up 6.29% year-to-date and higher by more than 21% over the past month, so as of May 1st, you have not lost any money owning this ETF in 2020, better yet, your up unlike most investments right now. Continue reading "4 ETFs You Should Start To Buy" →

Stay Away From These Industry Focused ETFs

Posted on by Matt Thalman

The economic impact caused by governments around the world to combat the spread of Covid-19 and save lives has taken its toll on nearly every industry. However, while there are arguments to be made that most of those industries will “bounce” back in a reasonable fashion, there is one in particular that truly may never be the same. Or at the very best not until we see a truly effective treatment for Covid-19 or a vaccine.

That industry is travel and leisure-tourism. The airlines have been battered, hotel stocks have been beaten up, and if tourist attractions around the world where publicly traded companies, most of them would have likely already filed for bankruptcy (mild attempt at a joke, you will still be able to visit the Grand Canyon and the pyramids in Egypt in the future.)

But in all seriousness, how long until you will feel comfortable going to New York city and jumping in an elevator to head to the top of the Empire State building? Or even fly to Denver, to stay in a crowded Vail Resorts owned ski resort and then sit on a chair lift or gondola with strangers? How about walk around and stand in lines at an amusement park? Go to a large sporting event or music venue? Continue reading "Stay Away From These Industry Focused ETFs" →

Oil ETFs For When and If The Industry Turns A Corner

Posted on by Matt Thalman

The word 'wild' doesn't even start to describe the oil markets over the last few weeks. We saw a price war between Russia and Saudi Arabia after world economies shut down to slow the spread of Covdi-19. Then an agreement between Russia, Saudi Arabia, and the other OPEC+ countries. That was followed by negative prices on futures contracts in the US. Majors changes to how large oil industry ETFs operate and several funds closing altogether. And then oil began to recover as inventory levels weren't as bad as many expected them to be.

So, your guess is as good as mine in terms of what happens next. However, most would agree that when world economies begin to open back up and operate in some form of 'new normal,' we will likely see demand for oil increase, which will probably send the prices higher, if not at least stabilize them. With that sort of thinking, there are a few ETFs you may want to put on your watch list and consider buying when you feel the mayhem, we experienced over the last few weeks is over.

The first is the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). The XOP has 57 holdings with an average weighted market cap of $21 billion. The fund also has a distribution yield of 3.05% and an expense ratio of just 0.35%. XOP has over $2.12 billion in assets under management, making it one of the largest oil and gas-focused ETFs you can buy. Furthermore, the fund offers an equal-weighted approach, so it is not weighed down by just a few big names in the industry. However, give the fund a little more risk during a time like now because if some of the smaller firms struggle, they do matter more to the fund than if the ETF was weighted differently. Continue reading "Oil ETFs For When and If The Industry Turns A Corner" →

Now May Be The Best Time To Invest In China

Posted on by Matt Thalman

The current COVID-19 pandemic that has halted world economic activity began back in December of 2019 in the country of China. For weeks the world watched as the Chinese government dealt with the viral outbreak. Some called the Chinese government's decision to 'lock-down' the city of Wuhan in the Hubei province and other major cities that were experiencing growing COVID-19 case rates as 'draconian.'

The spread of the virus slowed in China due to the 'extreme' measures they took, but pandora's box had been opened, and the virus had spread throughout the world. At this time, most of China is back to normal in terms of businesses being open, workers returning to factories, and most of the country no longer being in a lock-down situation. However, the lock-downs in China started on January 23rd, and Wuhan, for example, is still under strict movement rules.

In comparison, most European countries, the U.S., and other developed nations just went into 'restricted movement orders' in the last week of March. So, in those terms, China is two months ahead of the rest of the world in terms of fighting this disease and slowing economic activity as a form of fighting the spread of the disease. That also means they are likely two months ahead of the world in terms of when it comes to 'getting back to normal' or getting the economy back up and running.

So, since China is 'ahead' of everyone else, we could induce that some Chinese companies, mainly those who serve the Chinese people, will start to perform better financially, sooner than other companies around the world. This leads to the potential investment opportunity that is currently presenting itself in China, while the rest of the world is in a holding pattern waiting for the second shoe to fall before, they put more money to work in the markets.

So, let's take a look at a few ETFs that you can invest in today, which will give you exposure to the Chinese economy, and potentially a Continue reading "Now May Be The Best Time To Invest In China" →

How To Play This Volatile Market

Posted on by Matt Thalman

Over the past few weeks, I have been on the phone with tons of different market participants. Some are professional investors, people investing a little of their own money, financial advisors who manage a few million and others who manage hundreds of millions, and to first-time investors in their 20's, 30's, and 40's and even one as young as 17 years old.

While everyone wants to talk about what is going on or wants to know what to do or has a strong opinion on what to do within the market, only one thing holds true of every person I have spoken to; no one truly knows what is going to happen next.

Let me emphasize that, "No one truly knows what is going to happen next."

This is true for the people I have been speaking with, investors who managed billions in hedge funds or retirement funds. The Jim Cramer's or other talking heads on CNBC, the President of the United States, nor Congress, nor the Pope himself, knows what is going to happen next.

Although some people may tell you they do or just be very convincing that they do, let me assure you, they don't know what the market is going to do tomorrow, next week, next month, or the rest of the year.

And let's be clear, this would all be true whether or not we're in the midst of a pandemic or not.

However, you can't blame people for making predictions or looking at the past performance of stocks following significant economic turmoil. Comparing the past and trying to find similarities to help us make 'predictions' is very common and can be useful at times, but that doesn't mean we should blindly follow those predictions. (This is even true for my suggestions.)

So, if no one knows what's going to happen, then what should we do? Continue reading "How To Play This Volatile Market" →