You might be thinking twice about buying stocks at a dip. Paul Tudor Jones is the billionaire founder Tudor Investment Corporation. He says it’s still possible to buy stocks. Shopping sprees are not an option..
CNBC’s Tuesday interview with him revealed that financial assets are in a terrible environment right now. He added that stocks and bonds are not something he would recommend.
Managers of hedge funds should not aim for high returns but instead, they should be aiming to achieve high returns. Protect your moneyIt should be your first priority. But if you still You want to investHe suggests one approach that might be worth looking at.
If someone asked me to name a strategy I would like to use right now, I would say trend-following strategies.
Trend-following is simply the act of buying assets when they are rising in price and selling them when they fall in price. The goal is to continue the price movement.
Let’s take a look now at three possible ways to use the strategy in today’s market.
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Energy
Fueled by rising commodity prices, energy was the S&P 500s best-performing sector in 2021, returning a total of 53% vs the indexs 27% return. That momentum has continued into 2022.
Year to date, the Energy Select Sector SPDR Fund (XLE) is up 37%, while the S&P 500 has tumbled roughly 13%.
XLE aims to track the performance of the S&P 500s energy sector. The ETF will continue to provide market-topping returns if the positive momentum in energy price increases continues.
There are also other direct ways to track energy commodities. The United States Oil Fund, which provides exposure to oil futures, has a 40% increase in 2022. The United States Natural Gas Fund tracks natural gas prices and has more than doubled its annual growth.
Agriculture
Slower economic growth paired with higher inflation generally This is not good news for financial assetsStocks and bonds are my favorite. It could be a great time to explore agriculture.
No matter how the economy is doing in other areas, people still need to eat.
The Invesco DB Agriculture Fund is a convenient way of getting broad exposure to the agricultural sector. It tracks an index that includes futures contracts on some the most traded agricultural commodities, including sugar, corn, soybeans, and sugar. The fund rose 11% in 2022.
ETFs can also help you access specific agricultural commodities. The Teucrium Wheat Fund WEAT (and the Teucrium Corn Fund CORN) both saw 44%, 35%, and 35% gains, respectively, in 2021.
To control inflation, the Fed is increasing interest rates. Higher rates could increase the cost to borrow, which could impact consumers and businesses. Higher interest rates mean a lower risk-free rate, making stocks less attractive.
However, if your investments are well-positioned for rising interest rates, Fed hawkishness may be a positive.
ProShares Equities For Rising Rates ETF (EQRR) might be worth considering. The fund tracks the performance the Nasdaq U.S. Large Cap Equities For Rising Rates Index. As the name suggests, this ETF aims to outperform traditional large-cap indexes (like the S&P 500) in periods of increasing U.S. Treasury interest rates.
While EQRR is up just slightly year to date, it has soundly thumped the S&P 500s double-digit percentage drop over the same time frame.
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This article is for informational purposes only and should not be considered as advice. It is provided without warranty.
