Tom Lydon on Yahoo! Finance Live: EM, Gold, Quality, and a Bitcoin ETF

However, when investors got washed in a cycle of volatility that started in the fall and lasted through year’s end, investors were quick to reconsider the precious metal as a safe haven.

“Gold has had a period for the last five years where it’s drastically underperformed the S&P 500,” said Lydon. “It doesn’t do that often for an extended period of time and eventually things come back to the mean.”

Adding precious metals to a portfolio certainly speaks to the diversification benefits of gold, among other things. However, with gold trading at over $1,300 an ounce and GLD having a share price of over $100, investors who feel they might be priced out of this asset can look to a low-cost solution like GLDM.

For a low-cost gold play at 18 basis points, Lydon recommends investors take a look at the SPDR Gold MiniShares (NYSEArca: GLDM).

Growth Out, Quality In

With 2018’s year-end sell-offs in U.S. equities, investors are giving value investing another look as growth and momentum might be making their way to the exits. A byproduct of a shift to value is a focus on the quality of investments–being selective and using due diligence as screeners to find the best-performing investments.

“As opposed to exiting and taking the profits, one thing to do is look in late cycle value, quality-oriented stocks” said Lydon.

“There are specific factors you can buy within ETFs. There are also some multi-factor ETFs that will move from momentum and growth stocks early cycle to late cycle value, quality,” Lydon added.

Bitcoin ETF in 2019

Even after reaching a high of $20,000 in December 2017 and now falling 80 percent to just under $4,000, the idea of a Bitcoin ETF is still on the minds of the cryptocurrency-faithful. Getting approval from a financial regulator like the Securities Exchange Commission (SEC) has proven to be a major obstacle for issuers willing to provide a Bitcoin ETF product.

However, if one ETF can get pushed through the legal barricade, it could attract more investors who were initially hesitant to enter the cryptocurrency space.

“There are a lot of companies who have applications and the SEC is taking it very seriously,” said Lydon. “I talked to some of my friends in Washington just this week and they say, ‘This year, we’ll see a Bitcoin ETF.'”

“Crypto is not going away–the standard is Bitcoin and it’s going to continue being adopted not necessarily for investment, but for transactions,” Lydon added.

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