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September 01, 2020 10:18am
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How to Secure the Bag, Even When the Markets are Down

By: Bullish

Unless you’re shorting the market, your portfolio is probably in the red today. All major market indexes are red, but no index is more red than the tech-heavy NASDAQ 100. $QQQ fell over 3.5% in trading today, inching it closer to being negative on the year.

Today’s Rippers aren’t moving now, but they’re trending on social media and in the news. There’s no better time to secure the bag than on a down day. Here’s a few ideas to add to your watchlist:

💡A shortage in semiconductor chips has become so bad that it is now affecting car companies like Tesla and Ford and prompting them to temporarily suspend full production at their plants. President Biden signed an executive order to address the semiconductor shortage, which was met with thanks from Taiwan Semiconductor. $TSM fabricates chips for companies such as AMD, Intel, and Apple. In fact, they own 56% of the foundry market. $TSM is up 13% YTD, even after the last few days worth of correction. For those looking to play the broader semiconductor play, an ETF like $SMH might be ideal.

✈ Given the prospects that COVID-19 will subside later this year, travel stocks like airlines and cruise companies have been jumping. However, those companies traded down aggressively today. Given that many travel companies are still trading at a 20-30% discount on the year, there is considerable potential for investors to buy an airline ETF like $JETS for a long-haul investment in a travel rebound. Another alternative is investing in companies which might intermediate travel planning. The $AWAY ETF is a good example of an ETF that invests in companies that help customers book airfare, rental cars, and the like. $JETS is up 20.8% YTD and $AWAY is up 25.8% YTD.

📈 When all else fails, fall back on value. If the economy is apt to reopen, it may represent a pivot away from dependence on tech stocks that have spent the last few months delivering our groceries, packages, and the like. Some companies in this segment will keep winning big though, so one possible way to position yourself is with a consumer discretionary ETF. Consumer discretionary was the second most-hammered segment in trading today, second to tech itself. The segment covers non-essential goods or services like going to Disney World, buying Nike shoes, or Amazon delivering your packages. One way to get in on the potential action is to buy an ETF like $XLY, which is up 3.7% YTD.

The post How to Secure the Bag, Even When the Markets are Down appeared first on Bullish.

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