A Very Interesting New ETF, The 'Short Squeeze' ETF

Matt Thalman - INO.com Contributor - ETFs

On March 21st shares of The Active Alts Contrarian ETF (NASDAQ:SQZZ) began trading. SQZZ is the first ETF of its kind and opens the door for investors looking at investments from a slightly different angle. SQZZ is in a nutshell a 'short squeeze' Exchange Traded Fund.

First I will explain how shorting a stock works and what a 'short squeeze' is and then I will discuss SQZZ and why I like it.

What Does It Mean To 'Short' A Stock and What's A 'Short Squeeze'

If you don’t 'short' stocks very often, the concept of a 'short squeeze' and how this ETF will make money may be a little confusing. But I will start at the beginning and try to explain it all.

First, when a stock is sold 'short' that means the investors believes the price of the stock will move lower, not higher. If you buy stocks believing the share price will be higher in the future, what most people typically do, that is called going long on a stock. Hence, the phrase, 'going short' a stock when you think the share price is going to decline. Continue reading "A Very Interesting New ETF, The 'Short Squeeze' ETF"

The Only Way I Would Play The IPO Market

Matt Thalman - INO.com Contributor - ETFs

With the recently highly hyped Snap Inc. (NYSE:SNAP) initial public offering, I was once again reminded why I don’t attempt to buy into IPO's.

While big name company's first offer their stock to the general public, its call an initial public offering, or an IPO. While there are a number of issue's with buying stocks the first day they start trading, the biggest one is the hype!

The hype surrounding a big name IPO, such as Snap, Facebook, or Twitter to name a few, is that the demand for shares outweighs the supply on the first day of trading. Millions of people want shares and most fear if they don’t get them early, they will miss a big move higher. This hype and fear frenzy often causes shares to skyrocket in the first minutes to hours of trading. Snap for example rose 45% on day one.

But, after the hype fades, so will the stock price. The demand declines to the point that those looking to sell have to be willing to part ways with their precious shares for much less than they sold for on day one. Snap fell 27% on its second day of trading. Continue reading "The Only Way I Would Play The IPO Market"

Niche ETFs You May Want To Look Into: Part 2

Matt Thalman - INO.com Contributor - ETFs

I recently noted a few niche Exchange Traded Funds that I have come across during my time researching the wide world of ETFs. In that piece I noted three niche ETFs that I could actually see myself buying. Today, I would like to shares a few more niche ETFs, some of which I would consider owning and others that I wouldn't touch.

The first two that I would like to point out are PureFunds ISE Cyber Security ETF (HACK) and the First Trust NASDAQ Cybersecurity ETF (CIBR). HACK was the first ETF that focused solely on cybersecurity, which is why I lean towards owning it instead of CIBR, which was started due to the interest and success of HACK. HACK goes after both the hardware and software side of cybersecurity and the service aspect. It splits the two segments of the business and weights them by market cap. HACK has an inception date of November 2014 and since then is up a little more than 10%.

While that is certainly not very impressive performance, it is hard to argue that we will see less of a need for cybersecurity in the future. With the ever-increasing demand for more cybersecurity, investors who get in on this market today will likely see big upside in the future.

Or maybe long-term buy and hold isn't your thing! Continue reading "Niche ETFs You May Want To Look Into: Part 2"

Are 'Value' ETFs Worth The Risk?

By: Richard Robinson of Street Authority

"Where are the customers' yachts?"

It was a question the tour guide didn't expect. He was taking a group of tourists through the financial district in lower Manhattan from the area now known as Battery Park.

Eventually docks appeared around the park. And because of its proximity to Wall Street, it became a favored location for Wall Street bankers and brokers to dock their very expensive yachts.

So it was on this day that the tour guide was extolling the virtues of Wall Street moneymen. He told his audience that the yachts were the rewards for creating enormous wealth for their customers.

To which one lone voice asked, "Where are the customers' yachts?" Continue reading "Are 'Value' ETFs Worth The Risk?"

3 Big 'Exchange Traded Fund' Losers of 2016

Matt Thalman - INO.com Contributor - ETFs

While we all know the saying, 'past performance is not indicative of future results', taking a look back at what happened in the past is always a smart move. That is because as the other saying goes, 'those who do not know history are doomed to repeat it.' And the past mistakes we are about to discuss are certainly not mistakes you want to be repeating anytime soon.

So now that 2016 is over, let's take a look at a few of the worst performing Exchange Traded Funds during the year and see what we can learn from these epic failures.

The biggest Exchange Traded Fund loser of 2016 was Direxion Daily Junior Gold Miners Index Bear 3X Shares ETF (PACF:JDST) which lost an astonishing 97.95% of its value in 2016. The three times leveraged bear portfolio ran into a buzz saw in 2016 and lost investors some serious capital. At its last reporting the fund only had $84 million in assets under management, which is scary for a fund that has an inception date in October 2013. JDST attempted to inverse exposure to the Market Vectors Junior Gold Miners Index, which is a market capital weighted index of mining companies that receive at least 50% of their revenue from gold or silver mining. Furthermore, the index caps exposure to silver mining companies at 20% each quarter, meaning the index is 80% gold mining. Continue reading "3 Big 'Exchange Traded Fund' Losers of 2016"