There’s a lot going on in the world today…
From global terrorism to strained financial markets; it’s easy to see why investors are a little hesitant in pulling the trigger on buying a promising stock.
I get it. I mean, we’re all in the same boat here… well… unless you’re a client of Massack Fonseca, then you’ve already got it figured out.
But for the rest of us, we need to make sure that whatever hard earned money we make (after the government takes their mafia payment) has a safe place to grow and hopefully a reasonable chance of a strong return.
And I’m not talking about investing tens of thousands of dollars into penny stocks and hoping to make a killing…
I’m talking about a place where you can actually earn income, especially when the market is in rough shape.
That’s the key. Making money during the down turns. Think about it, when stocks are humming, life is good! The birds are singing, the sun is shining…
But when the market tanks and the clouds roll in – what happens to your portfolio?
That’s why it’s so important to diversify. We need an investment tool that gives us leverage – not only that – we need a tool that is liquid, in case we need the money quickly.
That’s why I’m such a HUGE fan of ETFs.
ETFs level the playing field…
I’m sure I don’t have to tell you how volatile the world is right now – and that uncertainty plays out every day the on the markets. Any event could trigger massive selloffs and that’s why it’s important to have an investment tool that can appreciate when the market fumbles.
With ETFs, it’s easy to take advantage of macroeconomic and geopolitical trends and stay ahead of the market. And the best part? There are so many choices.
You can decide to go long on gold or you can short the S&P…
Saudi Arabia pushes austerity measures – buy oil ETFs.
Europe is under attack again – short transportation.
American stock market crashes – buy short index-based ETFs
Doesn’t matter what is happening in the broader markets – you can be making money and building towards a solid nest egg.
Not many people are making money when the Dow is down 3% – but with ETFs – you could! In fact, you could be making as much as 9% when that happens!
How…
One word – leverage.
You can buy ETFs that are leveraged 2 or 3 times the index, commodity, or sector they’re tracking. And this goes both ways…
Think the dollar is going to tank – buy inverse ETFs that will appreciate when the dollar drops.
Believe the technology sector is going to take off with a hot new technology that Apple promises? Then go long with a technology ETF.
And by using multiples of 2 or 3 times leverage you can easily see appreciation with your investments without the risk of those pesky margin calls. And…
Because unlike traditional margin accounts, ETFs are leveraged and, more importantly, liquid! No more worrying about watching your account go from a hundred to zero in a heartbeat if a margin call is not met.
Plus, they trade just like any stock.
ETFs are both easy to buy and sell with ease. This takes away the risk of a bad margin call or the time waiting for a dividend payment. ETF’s leverage and liquidity stacks the deck in your favor!
ETFs are a great way to play the market. Track the broader trends, and decide if you think you should go long or short a particular market, commodity or sector.
So, to review…
3 Benefits To Investing in ETFs
Benefit #1: Natural Hedge. Market goes up – down – sideways – doesn’t matter – you CAN make money.
You think gold prices are going to run higher but you’re afraid that you’ll lose too much money if prices start falling. So why not buy a short gold ETF and offset those losses by making money when gold prices go lower.
Benefit #2: Leverage. ETFs can be leveraged up to 3 times, meaning you don’t have to wait for dividend payments or have to worry about nasty margin calls.
Imagine buying a stock that when it went up by 5% – with some ETFs, you could make 15% instead.
Benefit #3: Easy To Trade. You can move in and out of ETFs as easily as any liquid stock.
ETFs trade just like stocks! So you can set upside price targets and stop losses and move in and out of ETFs with ease.
This is why I think ETFs are a great tool. What other equity can give you a compounding return in so many different market conditions.
Regards,
Ethan Warrick
