We’re in interesting and unprecedented times, and many investors have questions about their exchange traded funds (ETFs) and what to do now that many of them are 40% and even 75% off their highs.
There’s no way to know what’s coming down the road. Will it get worse? Are we at the bottom now? Who really knows? This is exactly why we choose to follow a trend-following strategy instead.
We spoke with NewsletterAdvisors.com and answered a few questions about what people should be thinking about now, as well as how we’re handling this crisis on our side.
Among the highlights:
- We have a firm discipline when it comes to investing that involves watching trends – when areas are trending up, we’re in. When they’re down, we’re out. With that in mind, we’ve been keeping in touch with our clients to let them know that we’re on the sidelines as we wait for this storm to pass. It’s difficult to remain calm and rational after some of the days we’ve seen in recent weeks, but we’re striving to provide that for our clients.
- To get the economy back on track, tetting confidence back into the markets means that the credit markets will need to continue becoming unstuck. Banks have been scaling back lending between themselves and others, and it helps no one. Consumers will also need to have their pocketbooks freed up. No one’s going to spend with the cost of buying gas and food as high as it is right now.
- We’d tell the average investor right now that, above all else, remain rational. That means not only not panicking on bad days, but not getting overly excited o nthe good ones. In time, the trends will appear again. Right now, we just need to watch and wait.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.