In-depth market analysis offers the benefit of providing you with the data and reasoning for successful ETF trading. This is where stock market experts really excel.
On close observation of the market in the latest quarter, you can see that technology stocks lead the way in beating market estimates for sales as well as earnings per share. This observation is supported by the S&P Global Market Intelligence. Facebook (FB), Apple (AAPL) and Microsoft (MSFT) led the way and helped raise the overall earnings picture for the technology sector. Though the S&P 500 earnings for the sector still display a downtrend, the rate of decline is less than the gloomy picture that was predicted.
Since late April, this is the first time Apple trades above 100. That’s how the market is rewarding such tech stocks. But that has not really made fund investors to pile in. The State Street Global Advisors’ findings reveal that while tech ETFs witnessed $617 million net outflow in July, real estate ETFs were raking in $1.2 billion in terms of fresh money.
ETF Investors Not Rushing to the Tech Sector
That is something strange, as analysts and even casual stock market followers would agree. ETF investors usually rush into any sector that provides growth, particularly in an era when such kind of growth isn’t quite happening all too often. But that hasn’t happened with the tech sector. Probably, the Brexit vote and the US presidential election swings distracted investors away from the fundamentals of the companies in tech sector to the macroeconomic outlook. And we know uncertainties always characterize the macroeconomic situation thanks to the various factors contributing to it such as the aforementioned state of Europe after the Brexit resolution, the Chinese market, lack of growth in earnings, and the extension of the present bull market. These are all factors that investors chew on.
The Right Strategies for the Coming Months
In this context, State Street recommends three strategies for ETF trading:
- Core positions need to be strengthened with greater active funds. Investors need to carefully analyze the buy-and-hold positions they have. As a result of the slump in earnings growth, portfolio returns are only likely to be on the dull side which is why it is better to strengthen your core allocations. State Street advises that great beta strategies provide a broad exposure of the market while also being low cost. These strategies also help select stock factors that can provide portfolios with an extra boost in the course of time.
- Investors must also adopt a tactical approach with industries and sectors so they can harness growth cycle trends. For example, the current housing and consumer market in America is resilient. The energy sector could be oversold too. These are the kind of trends that need to be studied and understood to make the right decisions.
- Finally, investors must hedge portfolios through gold allocation and thereby manage downside risk. When you see bonds and stocks getting tarnished, gold comes to the rescue.
These expert suggestions should help you make the right decisions with ETFs. For more active assistance in online stock trading, get in touch with TradeZero at +1 954-944-3885 or email email@example.com.
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