The Morning Cup of Jo
You're thinkin' too hard Snapper. You're gonna bust a shell!
As Daisy was havin' her 'Mornin' Cup,' down at the coffee shop, she noticed Snapper pacing the street while he was flippin' through the Minyanville Gazette. "Snapper, what are you doing up so early?" Daisy asked. "I thought you'd be sleepin'-in and resting for the big St. Patty Day party tonight at Birdland." All critters know it's Snapper's favorite holiday. After all, his permanent color is Green. "I'm trying to find something to do with my assets today. It looks a little choppy out there and I don't want to be takin' a lot of risk with my investments right now; at least not until more clarity shows up in the markets. Ya know, that whole 'Swimin' Against the Tide' thing." Snapper replied. Daisy pondered his statement and said, "Come on in, sit down and have a 'Cup of Jo' while I tell ya what Hoofy does in situations like this."
Realizing our readers are from all different aspects of the investment world - buy side, sell side and individual investors alike - I can understand and appreciate the frustration the market presents in situations like this (corrections). You don't know how long it will last, nor know how deep it may go. The majority of investors (Institutions and Individuals alike) spend most of their time on the Net-Long side. Come-on let's face it, we've all got a little Hoofy in us (some more than others). Some don't want to day-trade, don't want to play the volatility (trade options), but want an investment that technically and fundamentally make sense for their portfolio. This is precisely why today I've decided to help Snapper, and other Minyans who feel like they're in this situation, by giving some alternative investments I use when the tide's comin' in.
You don't have to let your mind, nor your portfolio, stay stagnate during these times. There are simpler ways to accomplish your goals, stay involved and not the risk the possibility of having an individual equity implode on you with a bad earnings report or negative news. We've all been there before!
ETF's - Exchange Traded Funds.
Most of you are familiar with the Majors - the QQQ's or SPY's. However, there is a whole other world just around the corner many of you may not have realized or have never fully investigated. In reality, with the popularity in the late 90's, there is now over 100 ETF's. The best part is whether you're a Net-Long investor, a Net-Short investor or a Volatility investor you can use these resources in any gambit.
For those of you who are not familiar with what exactly an ETF is; it's a security that trades like a stock with the diversification of a fund except it doesn't calculate NAV every day. In other words, it allows you to take advantage of the bigger picture in the markets without having the risk involved of purchasing individual equities. On the other hand, if you're not a net-long investor and want to short, buy the volatility, invest on margin, hedge your current portfolio or even use a covered call strategy, these investments come in very handy, given the majority have options associated with them.
Below you will see a list of my personal favorites. Just like everything else, I like to keep things simple. These ETF's cover most of the major bases and have enough volume to move in and out of simply. Also, the reason I've listed the closest related Index next to the security is, in some instances, the ETF's can be more volatile than the index and not trade in complete unison. As a Techy this can be a little unsettling. Therefore, I've found over the years, it can be better to make the technical judgment by 'reading the lines' of the index and not just the ETF.
So if you believe bonds are the way to go and you're an equity buyer or the Biotech's are gonna move and you don't know which equity to go long/short or if you're net-long, don't want to sell your holdings, and just want to hedge your portfolio; ETF's may be the way to go.
Remember, there's always a Bull Market somewhere!
I hope this helps!
Until next time...
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