The Financial Services industry galaxy brains a big idea for you!
Here is a humorous article * from the mainstream financial media arm of the vast Financial Services industry. It wants you to know (now that most of the immediate market damage may have been done) that it has “products” available to help you mitigate the risk you should have been mitigating months ago.
It may be a good time for investors to look at less risky ways to stay in the stock market
You see, why on earth should you put your funds in a Money Market account yielding 4% or risk-free T-Bills and short-term Treasuries, for a solid total return, when you can maybe make 5% to 7% while still holding risk? You need to “stay in the stock market”, after all. Pretty please?
Another option that offers even more downside protection are buffer ETFs, which help investors to potentially avoid substantial losses, capping downside risk via options. Goldman says its new U.S. Large Cap Buffer 3 ETF (GBXC) protects against the first 5% to 15% of losses on the S&P 500, and also prevents further declines beyond 30%. However, it also caps gains to the upside between 5% and 7%.
Buffer ETFs, ha ha ha. Good one.
The brainwashing goes like this: You surely MUST be invested in SOMETHING! The Financial Services industry and its various tentacles in downstream Adviser shops all over every Main Street and backwater in America need you not to think about cash, after all. They need to sell you, harvest you, have you as their product, bull market or bear.
That said, my favored view is for an oversold sentiment bounce at least, in the stock market, beginning soon. It’s just that I get equal parts amused and annoyed when I see crap like this show up in the financial media supposedly advising Ma and Pa after most or all of the damage of a particular phase has been done. Sell, sell, sell boyz! Harvest them eyeballs! Throw some shit up against the wall and see if it sticks!
* When you view the mainstream financial media and Financial Services industry in a certain light, it can’t help but strike your funny bone.
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I seem to like REIT-containing ETFs, housing seems stable for my lazy eyes, at least more stable than the general credit market. They pay a crazy 8-12% and the chart looks bottomed out and unresponsive to current events so I don’t care about holding them. Also emerging market bond ETFs. I like the chart on VWOB. For EM equities I’m not so sure they’ll live so I avoid them. I also hold 6 month treasuries.
Revisiting what I wrote on EMs here. Trump tariffs and the current US economic situation feel to me like a rotation into emerging markets. There is no place for growth in developed economies. Europe will also have to enjoy a war and rising interest rates. The portfolios of the so-called “high-yield ETFs” contain either foreign bonds or foreign companies that pump out dividends instead of reinvesting in their own countries by taxation. I’m unfamiliar with the opinions here on the EM situation around 2022-2024.