Tag: ETF Investing

Investing Before Or After A Natural Disaster

Posted on by Matt Thalman

Matt Thalman - INO.com Contributor - ETFs


Similar to investing in "Sin Stocks," i.e., alcohol, tobacco, casino, weapons companies, investing with the mindset of making money before or after a natural disaster, such as a hurricane like Harvey that hit Texas a few weeks ago is often a touchy subject.

But, if you are someone who is alright with investing in this 'morally gray' area, or just want to learn about how others pursue it, together we can take a look at how it is accomplished and a few things to be aware of before deploying capital.

First, while every natural disaster can be incredibly devastating, hurricanes typically seem to account for the bulk of the damage here in the US. In most cases, they are the only real disasters which you can invest around because of their predictability, which gives investors a chance to make investments both before and after the disaster occurs.

Since hurricanes occur along the coast, and more often in the gulf coast region, the one industry they seem to affect is the oil industry. This is because a significant amount of oil is drilled for in the Gulf of Mexico and because a large number of the US's oil refineries and oil shipping ports are found in this region. Continue reading "Investing Before Or After A Natural Disaster" →

Bitcoin Bonanza Rolls On

Posted on by Matt Thalman

Matt Thalman - INO.com Contributor - ETFs


As the Bitcoin phenomenon rolls on, we continue to see new prospectuses for possible Bitcoin funds despite the Securities Exchange Commission denying the creation of one Bitcoin Exchange Traded Fund due to the lack of market surveillance and regulation. Oddly enough, the currency was started to give its user autonomy from governments and other regulatory agencies.

So the main reason why the currency grew in popularity is the reason why investors are finding it difficult to invest in the asset. Thus far two different proposed Exchange Traded Funds have been denied in the US, but it would appear the once denied Winklevoss Bitcoin ETF might have a chance of being approved the second time around. What is interesting is that the Winklevoss Twins were not the ones who filed the petition for reconsideration of their ETF, it was the Bats exchange, which the proposed ETF would trade on if approved. Continue reading "Bitcoin Bonanza Rolls On" →

The Debt Storm Is Coming

Posted on by Matt Thalman

Matt Thalman - INO.com Contributor - ETFs


While we can debate until we are blue in the face the actual ins and outs of what causes recessions, most would agree that high debt loads play a significant role. If we look back at the 2008-2009 recession, this is very true. Or the dot.com bubble bursting, debt played a large role. Even go a little further back into history and look at the 1929 stock market crash and subsequent recession, mostly fueled by margin trading (investors trading with borrowed money, i.e., using debt to fuel larger trades).

At this point, not many people are talking about the United States current debt levels. Not only is the U.S. government's debt level out of control, but more importantly consumer debt levels are also out of control, and that is likely the more concerning issue.

When consumer debt gets out of hand, first we begin to see increased levels of defaults. That leads to reduced levels of credit as the institutions who lend credit begin to tighten their requirements to borrow. With less available credit, consumers begin spending less on discretionary purchases because they either can't get credit or have maxed out what credit they did possess. Lower spending leads to lower profitability for consumer facing companies, which then leads to a reduced number of jobs in those sectors. Continue reading "The Debt Storm Is Coming" →

How You Can Make Money From Market Volatility

Posted on by Matt Thalman

Matt Thalman - INO.com Contributor - ETFs


Based on a number of recent reports indicating the major indexes could end the year flat from where they sit today, I offered a few ideas on how investors could still profit during the last four months of 2017.

One of those ways was using Exchange Traded Funds that invest in the futures of the Volatility Index. For most investors, the CBOE Volatility Index or VIX or even the 'fear gauge,' is a rather complicated and confusing market measuring stick. So, today we are going to go through the 'ins' and 'outs' of the VIX and go into a little more detail on how the average investor can use the VIX ETF's to turn a little profit from time to time.

The CBOE Volatility Index (VIX) was designed to put a number on market volatility so investors could trade and make money based on the volatility of the stock market. This is achieved through the use of the futures market and options prices. The VIX tells investors the square root of the risk-neutral expectation of the S&P 500 variance during the following 30 calendar days.

The VIX is often quoted as a number, say 10, 20, 25. That number represents the expected annualized change, with a 68% probability of being true, of the S&P 500. So for example if the VIX is at 20, it would be predicting the S&P 500 will change up or down by 20% over the next 12 months. Continue reading "How You Can Make Money From Market Volatility" →

Market May End The Year Where It Is Today, But You Can Still Make Money

Posted on by Matt Thalman

Matt Thalman - INO.com Contributor - ETFs


A number of market participants have begun making year end predictions about where they believe stocks will finish. The predictions have the market finishing higher, lower, a lot higher, a lot lower, and right where it is today. Basically, no one really knows how the stock market will finish 2017 because no one can accurately predict the future.

But, when we look at the past, predictions have been made which aren’t as optimistic. Based on historical data a Goldman Sachs analyst has noted that when stock valuations have been where they are today, the market returns have been in single digits or negative.

Year-to-date the S&P 500 is already up 10.5%, which again compared to historical averages is an above average return. Furthermore, history tells us that we have market pull backs of 5%, 10%, and 15% rather often; about every 3 months, 8 months, and 14 months. We have not seen a 10% or 15% pullback in 2017. Continue reading "Market May End The Year Where It Is Today, But You Can Still Make Money" →