Tag: matt thalman

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" →

9 ETFs To Consider As Coronavirus Takes Hold

Posted on by Matt Thalman

In this three-part series, I first discussed why the Coronavirus is important to investors and what the Health Care officials who have been tasked with working on controlling the situation have said in terms of where we are and how people should not panic, but be prepared.

With that thought in mind, I recently wrote about the types of stocks and ETFs investors should consider avoiding if this virus outbreak does get worse and turns into a real pandemic. Now I would like to discuss the types of stocks and Exchange Traded Funds that investors should consider owning if the virus continues to spread uncontrollably and the situation worsens. (Again, though, fear and panic don't help anything, so most of the stocks and ETFs I will be discussing are good options to own regardless of what happens with the Coronavirus outbreak.)

When the major markets turn negative and investors pull out of 'growth' stocks, the first 'safe haven' they run to are bonds. However, we have already seen bond prices jump and interest rates plummet as this trade has become very crowded. One reason they do this is that they are looking to 'protect' their investable capital but also still wanting some sort of yield, even if it's minimal. Even a 1.2% Treasury yield is better than a savings account or, worse, losing 5% in stocks.

So, once the bond trade gets warn out, investors then move into dividend-paying stocks. Ideally, dividend-paying stocks that have a proven track record of paying their dividends even when economic times get tough. This elite group of stocks is called the Dividend Aristocrats and they have not only been paying a dividend for long periods of time but they have consistently increased their dividend amount each and every year for a very long time, at least 25 years to be exact. These stocks are such companies as AT&T, Exxon Mobile, Walgreens, and Coca-Cola, to name a few of the currently 64 companies that hold that title. Continue reading "9 ETFs To Consider As Coronavirus Takes Hold" →

5 ETFs To Avoid Because Of The Coronavirus

Posted on by Matt Thalman

With the Coronavirus spreading around the world, the major US and world markets have moved lower in a big way. I recently noted why these moves lowered occurred. While I don't believe at this time, we have enough information to accurately determine if this new virus is going to be a Black Swan and crash the world economies. I do believe we should all start thinking about what we are going to do if the situation does get worse.

With that in mind, let's take a look at a few industries and ETFs that you may want to avoid investing in if the Coronavirus situation does continue to get worse.

The travel industry would be high on my list of businesses to avoid right now. The US airlines have already stopped flying to China and have announced plans to cut flights to other profoundly affected countries around the world. Hotels also are seeing lower fewer guests as tourism and business travel have rapidly declined as travel restrictions have been put in place by both governments and corporations. Think Marriott, Southwest Airlines, Delta, even Boeing.

And of course, we shouldn't forget about the gaming and casino industry. While these stocks could be lumped in with the Hotels, most people consider this industry to be separate from the rest of the leisure industry. Think MGM Resorts, Wynn Resorts, and Las Vegas Sands.

The next types of business we should be looking at are those that operate in very public events. Continue reading "5 ETFs To Avoid Because Of The Coronavirus" →

Is the Coronavirus a Black Swan Event that Will Cause the Next Recession?

Posted on by Matt Thalman

The deadly Coronavirus has now spread to more than 60 countries around the world and infected more than 85,000 people, killing nearly 3,000. The virus began in China, which is where overwhelmingly most of the infections and deaths have occurred, but several other countries have recently seen dramatic spikes in infections.

The virus, which was initially diagnosed in December 2019, has proven difficult to contain. However, based on reports from China, the spread of the virus can be slowed, only after what some would consider ‘extreme’ measures. Those measures in China where quarantine orders of the general public, school closures, and businesses shutting down daily operations. These steps have appeared to help the spread of the virus in China, but have taken their toll on the world economies.

During the last week of February, the Dow Jones Industrial Average fell 3,500 points or more than 12%. That is the largest one-week point loss ever for the index, while the percentage decline is the biggest we have experienced since the 2008 financial crisis.

So why did the US markets react the way it did? Continue reading "Is the Coronavirus a Black Swan Event that Will Cause the Next Recession?" →

Money Will Be Made Trading The VIX In 2020

Posted on by Matt Thalman

Market uncertainty creates volatility and the VIX is an index that measures this volatility based on the S&P 500. When news hits the stock market, the VIX increases and when there are fewer outside factors or less uncertainty about the future, we see the VIX fall.

Thus far, in 2020, we have had two situations that have increased volatility in the stock market; the political and military situations between the United States and Iran and the Coronavirus. We are only one month into the year and two major events have occurred which have sent the VIX soaring higher. There will undoubtedly be more pop-up events such as say further political and military issues with Iran or even North Korea perhaps. We will likely see natural disasters pop-up which could cause uncertainty, the situation in England with Brexit and how that is handled could potentially cause uncertainty. Coronavirus is likely to continue to create uncertainty. These are just a few predictions off the top of my head that could cause the VIX to move in the coming months.

One event coming in 2020 that we can all see on a calendar is the Presidential election this year. We know uncertainty about the future causes the VIX to rise and based on the past election of President Donald Trump, we can confidently say that political polling is not very accurate. Thus, we can predict there will be a high level of uncertainty coming down the road with who may be our next President.

With all of this in mind, how do we use this uncertainty to make money? Well, the easiest way is by Continue reading "Money Will Be Made Trading The VIX In 2020" →