Tag: matt thalman

Own Tesla Without All Of The Risk

Posted on by Matt Thalman

If you are like most investors, you have been watching the historic, mind-blowing run Tesla has had in 2020. Or maybe you didn't realize that Tesla Inc. (TSLA) is up more than 429% since the start of 2020. Yes, you read that correctly, Tesla is up more than 400% during a time when most companies are struggling due to the pandemic and business shutdowns the country dealt with back in the spring.

But, after seeing that sort of performance, you must be asking yourself one of two questions. First, can this continue? And is it worth the risk of buying Tesla, at let's say an all-time high, and having the stock roll-over on me days or weeks after dumping money into it?

Well, yes, Tesla can theoretically continue to run higher. I am not saying that it will or that it will not. What I am saying is, is that yes, it could continue running higher. But to the point of whether it is worth the risk, well, the same can be said. Tesla could roll over tomorrow and lose 50% in a matter of days or weeks.

So, the real question is, "how can I buy Tesla without taking on so much risk"? Continue reading "Own Tesla Without All Of The Risk" →

Gold ETFs Setting New Highs

Posted on by Matt Thalman

During the final days of July, Gold hit new all-time highs just below $2,000. The record run higher for the precious yellow metal, and for most of the precious metals has been in large part caused by the worldwide pandemic. As investors become nervous about the future, many find safe harbor in gold and other hard asset metals.

The bull market will likely continue as long as the pandemic and world economies struggle to gain traction. But, if we see a vaccine that protects against Covid-19, the price of gold will likely begin to fall as investors move back away from safe investments and back into equities, bonds, and other higher-risk – higher growth investments. When the rally ends, well, that’s, of course, the trillion-dollar question and one that I can’t help with. However, I can point you in the right direction of what to invest in regardless of which way you think the price is headed.

The big dog in the gold Exchange Traded Fund world is the SPDR Gold Trust (GLD). GLD has over $77 billion in assets under management and has been in existence since 2004. The fund charges a 0.4% expense ratio and has an average daily dollar amount volume of just over $1.76 billion, meaning it typically has liquidity. GLD tracks the gold spot price using gold bars held in vaults in London. This is an excellent option for anyone who wants the protection of gold but doesn’t want the hassle of buying actual gold bars.

The only big downside to GLD is that one share will cost you roughly $185. But there is a solution to that problem, and it’s called the SPDR Gold MiniShares Trust (GLDM). GLDM is essentially the same thing as GLD, but it holds 1/10th as much gold per share as GLD, and therefore each share costs less. As of this writing, GLD is $184.98 per share, while GLDM is $19.61 per share. GLDM tracks the spot price of gold the same as GLD, but it also has a lower expense ratio of just 0.18%. It also has much fewer assets under management of just $3.22 billion and therefore is less liquid for large orders. But again, if you want to place a large order, go with GLD. GLDM is designed for the small retail investor, not the large funds that need exposure to gold. Continue reading "Gold ETFs Setting New Highs" →

Tesla Is Going To Change The ETFs You May Own

Posted on by Matt Thalman

Watching the Elon Musk and Tesla (TSLA) show from the sidelines has been both entertaining and exhilarating even for those investors who have never owned a single share of the electric vehicle company. But for many investors, the days of watching the historic run of Tesla’s stock price from the sidelines are likely soon to be over, regardless of whether or not you like it.

Tesla’s most recent quarterly earnings report was its fourth consecutive one in which the company posted positive earnings on a GAAP basis, which now makes the automaker eligible to join the S&P 500 index. So why does this matter to the average investor?

Well, first off, if you own any Exchange Traded Fund or Mutual Fund that tracks the S&P 500, you will now own Tesla indirectly if the company is added to the index. Furthermore, Tesla is a massive company. Its market capitalization is north of $250 billion, making it one of the biggest companies in the S&P 500 if it was already a part of the index. So, not only will Tesla be a part of your portfolio, but if you have a large position in an S&P 500 tracking index, well, you will now have a lot riding on Tesla living up to its lofty valuation.

Additionally, since it is not part of the index, and if it does get added, there will be massive selling of other index components to make room for Tesla. Let me explain this point in a little more detail, because its very, very important. The S&P 500, like many indexes, is a market capitalization-weighted index. This means that the largest company in the index, currently either Apple (AAPL) or Microsoft (MSFT), accounts for around 5.7% of the index. The smallest company in the S&P 500, represents less than 0.01% of the index. And remember, 500 companies comprise the index. Continue reading "Tesla Is Going To Change The ETFs You May Own" →

Gold ETFs Setting New Highs

Posted on by Matt Thalman

During the final days of July, Gold hit new all-time highs just below $2,000. The record run higher for the precious yellow metal, and for most of the precious metals, it has been in large part caused by the worldwide pandemic. As investors become nervous about the future, many find safe harbor in gold and other hard asset metals.

The bull market will likely continue as long as the pandemic and world economies struggle to gain traction. But, if we see a vaccine that really protects against Covid-19, the price of gold will likely begin to fall as investors move back away from safe investments and back into equities, bonds, and other higher-risk – higher growth investments. When the rally ends, well, that’s, of course, the trillion-dollar question and one that I can’t help with. However, I can point you in the right direction of what to invest in regardless of which way you think the price of gold is headed.

The big dog in the gold Exchange Traded Fund world is the SPDR Gold Trust (GLD). GLD has over $77 billion in assets under management and has been in existence since 2004. The fund charges a 0.4% expense ratio and has an average daily dollar amount volume of just over $1.76 billion, meaning it typically has liquidity. GLD tracks the spot price using gold bars held in vaults in London. This is an excellent option for anyone who wants the protection of gold but doesn’t want the hassle of buying actual gold bars. Continue reading "Gold ETFs Setting New Highs" →

Three ETFs Set To Move Higher

Posted on by Matt Thalman

With over 2,300 ETFs to choose from, its not easy finding ones that excite you enough to put hard-earned money into with the goal that it grows substantially higher in the future. Luckily for you, I am continually searching high and low to find ETFs the average investor like yourself can not only buy but own over a period sometimes just months or other times years with the confidence that you will see a solid return. The current economic environment adds another challenge on top of finding quality ETFs to invest in, which is why I will also thoroughly explain why now is potentially a good time to buy.

The first ETF I would like to highlight is one that has already received a boost and will likely continue to move higher due to the Covid-19 Pandemic and how this global problem will likely have a lasting effect on the flow of business. The SoFi Gig Economy ETF (GIGE) has an inception date of May 2019 but now finds itself in a perfect storm situation where the fund was developed to benefit from the "gig economy," which due to the pandemic and social distancing requirements seem to be the sweet spot everyone wants to be. The fund's prospectus states its allocation based on these metrics;

30% to 60% Companies that directly facilitate and participate in revenue generation from gig economy businesses (e.g., app-based platforms, auction sites, web-based stores, and other commission-based platforms) 20% to 40% Companies that enable or support gig economy businesses in marketing and sales functions (e.g., social media platforms, messaging platforms) 5% to 20% Companies that facilitate financial transactions for gig economy businesses through apps or web-based platforms 5% to 15% Companies that support the ability of individuals to operate a gig economy business without participating in a commission or revenue-based model (e.g., companies providing health care, technology, or other back office services) 0% to 10% Other companies that are expected to benefit from the growth of gig economy businesses and associated lifestyle changes for individuals engaged in gig economy businesses

The funds top holdings include Twitter (TWTR), Alibaba (BABA), MercadoLibre (MELI), PayPal (PYPL), Square (SQ), and Lending Tree (TREE) to name a few. All companies that are primed to continue benefiting from the current pandemic and are set-up to be rock stars even once we have moved past the Covid-19 situation. And did I mention the fund is up 37% year-to-date? Continue reading "Three ETFs Set To Move Higher" →