A Gift from Financial Markets Delivered to You on a Silver Platter
Lawrence M. made a fortune with this opportunity. I’ve done incredibly well too.
Lawrence has an “edge”…and I’ll show you what it is. But first, a little tip (which took me years to understand).
In financial markets, the greatest principle wealthy traders will always proclaim is to manage downside risk. Making and keeping money is fairly simple. The real skill is managing or even eliminating the downside risk. I found a “tool” which enables anyone to manage downside risk better than anything else I know. One reason this “tool” reduces or even eliminates risk is because any losses are limited to your initial investment. This makes them similar to commodity options.
This “tool” is perfect fit for beginning traders and speculators.
This Simple “Tool” Can Change Your Financial Story
The “tool” is an exchange-traded fund or ETF.
I love ETFs. Mostly because they:
- Limit Risk Big Time
- Make it easy to enter and exit trades (and take profits)
- Super leverage (they can’t compare to futures markets, but pretty close)
There is a new breed of ETFs available today which enable you to leverage profit opportunities in a big way.
The Powerful Money Making Ability of Modern ETFs
First allow me to explain these babies. An ETF holds assets like stocks, bonds, currencies, or commodities. ETFs trade close to asset value of its underlying assets. The most popular ETFs track an index, like the Dow Jones Industrial Average, NASDAQ or S&P 500.
ETFs are attractive because of the relatively low costs, risk factor, tax efficiency, and stock-like features (which means they are easy to understand). ETFs are like a mutual fund in that they can be purchased or redeemed for its net asset value (or NAV).
Believe it or not ETFs have been available in the US since 1993. In 2008 the U.S. Securities and Exchange Commission authorized the creation of actively-managed ETFs.
A New Way to Make Money – Actively-Managed ETF
An actively managed ETF will have a benchmark index (like the S&P 500), but managers can change sector allocations, market-time trades and/or deviate from the index as they see fit. This produces investment returns which often mirror the underlying index. Passive ETFs typically follow indexes, which allow investors to track the fund pretty easily.
Oil Can Go Up or Down and You Can Still Make Money
Let’s say the price of oil climbs to historic highs. After this run up I might not believe oil will remain at historically high levels for eternity. In fact, contrary to what you may believe, oil can plummet in price too! You can make just as money when oil drops in price as you can when it skyrockets.
You can make a fortune with ETFs when you go against the crowd at the right time.
Make Money No Matter What Happens to the Price of Gold
Gold bugs are happy when the price of gold rises. But get this… You can make a fortune when gold plummets in price too! This is one of best kept secrets in the financial markets today. The so-called gold experts try to convince people gold will surge in price for eternity. But this is not always the case.
Granted, in times of panic, stock market crashes, war, and currency wars the price of gold “tends” to rise quickly. But the price of gold can plummet during crises, too – as witnessed in the gold market not too long ago when the stock market dropped 1000 points in one day!
For example, the price of gold surged from $400 an ounce in 2004 to more than $1800 an ounce in 2012 and 2013. However, at the beginning of the real estate and mortgage crisis in the first half of 2008 gold actually fell in price. Whatever your view happens to be there’s likely a Gold ETF you can trade.
New “Ultra” ETFs Provide Phenomenal Leverage
If, as an investor or trader, you believe the price of something will go up, you are considered bullish, or a “bull.” If you believe the price of something will go down you would be considered bearish, or a “bear.”
Well, as an investor or a trader you might even be “ultra” bullish or bearish, meaning you think the price of something is going to go up or down in a BIG way. That is the beauty of a new breed of ETFs called “ultras.”
Ultra Exchange-Traded Funds enable an investor or trader to leverage an investment in a much bigger way than just an ordinary ETF. For example, here are a few “ultra” ETFs you can track on any financial website.
I’ve noted the corresponding or underlying stock, bond, currency, or commodity:
SMN UltraShort (Basic Materials)
SZK UltraShort (Consumer Goods)
ProShares SCC UltraShort (Consumer Services)
ProShares DXD UltraShort (Dow30)
ProShares FXP UltraShort (FTSE/Xinhua China 25)
Proshares SKF UltraShort (Financials)
ProShares RXD UltraShort (Health Care)
ProShares SIJ UltraShort (Industrials)
ProShares EFU UltraShort (MSCI EAFE)
ProShares EEV UltraShort MSCI (Emerging Markets)
ProShares EWV UltraShort MSCI (Japan)
ProShares MZZ UltraShort (MidCap400)
ProShares DUG UltraShort (Oil & Gas)
ProShares QID UltraShort (QQQ) Twice inverse of NASDAQ-100
ProShares SRS UltraShort (Real Estate)
ProShares SDK UltraShort (Russell MidCap Growth)
How to Make Money with ETFs
Each investor has his or her view regarding financial markets, stocks, world affairs and the economy. This is why the markets move so dramatically – up, down, and sideways. In order to make money with ETFs your view of the future needs to be fairly accurate, but not exact. On top of that, your timing needs to be fairly accurate as well.
For example, in 1999 to 2000 my view was the dot-com hysteria was a joke. The market boom was not a joke it was very real. But I felt novice investors and traders were swept up in the fantasy, and therefore I took the other side of the trade.
Granted, novice investors and speculators were making money on stocks of dot-com and tech stocks on paper. My view was most of these traders were not going to leave the table with any winnings. A funny thing happened….. Almost no one removed profits from the dot-com fiasco by the time everything collapsed.
In this case my world view of the market was correct. However, my timing was off by almost a year. So I incurred paper loses until the plunge occurred, and it did occur.
Common sense told me the market would plummet at some point. Your view of a market needs to be accurate in terms of “timing.” So, in order to make money with ETFs you’ll need to carefully examine the market you’ll be investing, and calculate a “reasonable” time frame.
For example, everyone knows the housing and real estate market has been in serious trouble for some time. But some people believed the housing market would bounce back in a big way in 2009. Other people believe the worst is yet to come. The reality is probably somewhere in the middle.
So if you believed the housing market will stay the same or get slightly worse there are two ETFs you could purchase to take advantage of your view:
Ultra Short Financials Proshares (Symbol SKF)
This ETF benefits when and if financial services suffer. This would include real estate lenders, international banks; property and casualty insurance companies; companies invested directly or indirectly in real estate; diversified financial companies, such as Federal National Mortgage Association, credit card issuers and investment advisers; securities brokers and dealers, and investment banks,
ProShares Short Real Estate (Symbol REK)
This ETF seeks daily investment results which correspond to the inverse (opposite) of the daily performance of the Dow Jones U.S. Real Estate IndexSM. The beauty of ETFs and specifically “ultra” and “double short” ETFs is they enable a trader to leverage markets (up or down) in a big way. ETFs also enable you to reduce or contain risk, unlike most futures or Forex markets.
There you have it!
Everything you wanted to know about ETFs but were afraid to ask!
Plan your trading strategy.
Novice traders and investors don’t bother to plan a trading strategy. This is why most of them lose money in the market. The old trading adage “The Trend is Your Friend” is true….to a point. But you have to look at the real….underlying trend.
You Can Make Money If a Market Goes Up, Down or Sideways
The ETF market provides a great opportunity to profit when a market goes UP, DOWN, or SIDEWAYS! The only thing most novice investors understand is buy and hold. But I think the buy and hold strategy perpetrated by Wall Street money managers is the WORST thing you can do over the next five years.
For example, if you think the real estate market will c deteriorate you could buy the ProShares ETF symbol REK. This ETF seeks daily investment results which correspond to the inverse (opposite) of the daily performance of the Dow Jones U.S. Real Estate Index. In other words, if the real estate market goes south you make money.
Here’s another example……
If you think the real underlying trend for stocks is down you could buy ProShares ETF symbol QQQ. This ETF seeks daily investment results which correspond to the inverse (opposite) of the daily performance of the NASDAQ-100 Index®. In other words, if the stock market tanks you make money.
And, here’s another example…
If you think the oil and gas market will plummet….then you could buy ProShares ETF symbol DUG. This ETF seeks daily investment results which correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index.
In other words, if you think oil and gas is overpriced and falls, and you own this ETF you will make money.
It’s that simple.
Paper Trading ETFs!
Here’s one of the great things about ETFs.
You can practice for FREE without risking a dime!
Simply plan your trading strategy based on a real underlying trend and choose an ETF which fits. Find the ETF and write down the symbol and current price.
There are hundreds of sites to find and research ETFs…I like Google Finance, ProShares and Bloomberg.
After you’ve selected an ETF, pretend you bought it and then watch it on financial websites to see if it goes up or down in value.
Develop an exit strategy.
In other words, think like a trader and entrepreneur. You can determine a reasonable profit and then place and automatic price to sell it.
ETFs are one of the greatest money making “tools” since commodity futures.
Your humble host,
(Ed Note: Marc Charles is referred to as “The King of Business Opportunities” ….and for good reason. He should be known as “The King of Legitimate Business Opportunities”…because he’s launched, bought, sold reviewed and advised on hundreds of businesses and money making opportunities. He understands legitimate opportunities. )
ETFs are a free gift from financial markets brought to you on a silver platter. Start paper trading the ETF of your choice today. Ultra and inverse ETFs enable you to leverage the market without undue risk, and make a bundle of money.
One contrary trade which could prove very profitable is shorting precious metals. Everyone and his brother is long (expecting prices to skyrocket for eternity). This is a prime “short” opportunity.
Exchange-Traded Funds Center – Yahoo Finance
ETF Investment Guide – seekingalpha.com ETFs
ETF Investor Newsletter
Morningstar ETF Investor
Exchange-Traded Funds Explained– Investopedia