Everyone’s looking for signs that the markets have rebounded and some stocks are at rock-bottom prices, but does that mean it’s a good idea to get in on financial stocks and exchange traded funds (ETFs) right now?
Matt Krantz for USA Today says that the recent history of financials shouldn’t mar your opinion of them too much. The problem now, of course, is calling the bottom. You can never know if the problem is over, or the extent of it, until some time passes.
Krantz suggests some ETFs that aren’t 100% focused on financials. For example, the Vanguard Value (VTV) is 27% financial. If the crisis has hit bottom, you could stand to benefit from any recovery. If it worsens, your entire portfolio won’t be sunk, as the fund is also allocated in energy, health care and industrials.
Year-to-date, this fund is down 3%.