This week, you’ve heard from both Alexander Green and Nicholas Vardy about recent market volatility and what it means for investors. Today, they discuss how exchange-traded funds (ETFs) can protect investors from market mood swings – and even help them achieve gains on the downside.
Alexander: Nicholas, it’s great to see you again. I’m always pleased to have you around because, for more than 20 years, I’ve spoken at investment conferences, and I get all this doom and gloom and pessimism about the future. You’re one of the few people who have been on the right side of the market over the years. So it’s good to have a kindred spirit here.
Nicholas: Thanks, Alex. Great to see you again as well.
Alexander: So, Nick, you’re the newest strategist for The Oxford Club. Can you tell us a bit about your investing philosophy?
Nicholas: Yes, I am. I joined the Club almost two years ago as the ETF Strategist. My investment philosophy is that I really don’t care where I make money in the markets. We could be long on stocks. We could be short on stocks. We can even invest in foreign stocks, in commodities, in fixed income and currencies. Really, any type of asset class around the world.
Alexander: You can go wherever the action is.
Nicholas: Wherever the action is. And that kind of reflects Jim Rogers’ approach to it, where he doesn’t really care where he makes money. I’m the same way. I’ve been inspired by that philosophy. The world of ETFs really allows you to do that.
If you have a view on the British pound or U.S. interest rates or the Brazilian market, there are ETFs for those. If you are extremely bearish on the U.S. market, then there is a leveraged ETF for that. You can actually make a lot more money with the market going down, a lot quicker, with those kinds of ETFs.
So it’s really that flexible approach that I find intriguing.
Alexander: Yes, I love that, because oftentimes people have a sense that something big is about to happen, but they don’t really know how to take advantage of it. And I think the beauty of reading your insights is you have a strong opinion of what’s happening in the world and where the best places are to invest. But you also give actionable advice about where to put your money to work.
Can you tell me more about your Oxford Wealth Accelerator trading service that launched last December?
Nicholas: Absolutely. Oxford Wealth Accelerator is a product that focuses solely on exchange-traded funds. And as you know from our conversations before, I’ve always liked to expand my investing focus beyond just U.S. stocks and bonds to, really, all asset classes throughout the world.
Alexander: We often hear people say that investing is challenging because there are so many people out there giving so much advice in so many different ways. What is it that sets Oxford Wealth Accelerator apart from everything else out there?
Nicholas: Well, the service offers a selection of portfolios based on different investment strategies. The Tactical Portfolio, for instance, looks at short- to medium-term trends based on what opportunities the market is offering. So if oil is in a strong bullish market, I will recommend that you invest in a leveraged oil ETF.
Alexander: Let me stop you there. When you say “leveraged,” what do you mean?
Nicholas: Leveraged means that you essentially get more bang for your buck. If you invest in a 2X ETF, you will get double the returns on the change in the price of the underlying asset. And there are also double short ETFs. So if you believe that oil is going to go down, then there are leveraged products that allow you to profit from that change much more quickly on the downside as well.
Alexander: Right. And we always tell people to diversify, diversify, diversify. The beautiful thing about what you’re doing is that every single one of your recommendations is already diversified. There’s less risk because every single recommendation is a diversified investment.
Nicholas: Usually when people talk about diversifying in the U.S. context, they think about diversifying among U.S. stocks. ETFs allow you to diversify among all sorts of asset classes. With ETFs, you can invest in U.S. stocks and foreign stocks, in currencies and commodities, and in fixed income.
Alexander: And I understand you’ve just added a new portfolio to Oxford Wealth Accelerator. Tell us about it.
Nicholas: Well, as it turns out, many people are focused on generating a steady source of income in their investment portfolios. Yet, up until recently, it was challenging to take a diverse approach to income investing.
But the good news is this: Today, there are ETFs for a wide array of income-generating strategies and you can invest in them at the click of a mouse. That’s why I have added a new Income Portfolio to Oxford Wealth Accelerator.
Alexander: Americans sometimes forget that while we are the world’s biggest economy, 96% of our potential customers and our potential suppliers are in foreign countries. And the majority of world GDP comes from other countries. As investing legend John Templeton famously said, “There’s always a bull market somewhere.”
Most people, if someone told them that the way to take advantage of what’s happening in China is to buy a Hong Kong index fund, wouldn’t even know how to do it. They don’t realize how simple it is to buy it through their existing broker using a very liquid, highly diversified, perhaps even leveraged play on something on the other side of the world – just as simply as they could buy IBM or Apple or Amazon.
Nicholas: Yes, absolutely. The U.S. market has had a really strong run over the past 10 or 20 years. And the question arises, is that run going to continue? No one really knows. We’ve seen some volatility lately. But with ETFs, if the U.S. market does slow down, there are other options out there. And it’s very important for people planning their retirement and their investment portfolios to have those other options.
Alexander: We definitely agree on that. Yes, the U.S. is a wonderful place to invest. Yes, it’s given marvelous returns over the last decade. But it’s not going to be the best-performing market year after year after year in the future.
Nicholas: Exactly. It’s very important that you diversify your bets. And that’s a major benefit of Oxford Wealth Accelerator. There’s a universe of ETFs out there, but you have to play that game of three-dimensional chess to be able to identify them and know what to buy. If you’re aware of the best opportunities, you can really home in and make a lot of money.
Alexander: Right. That’s why I love reading your stuff, Nick. You’re talking about things that virtually no one else is talking about. You’re finding opportunities that most people are completely unaware of. And I’ve always been a big endorser of what you do. You’re a smart guy. Your investment advice has worked. You’ve got complete integrity, and I’ve always said that if Nicholas Vardy’s suggesting it, then I will almost always heartily endorse it.
Nicholas: Well, thank you, Alex. I really appreciate that. And thanks for taking the time to talk about ETFs and Oxford Wealth Accelerator with me.
Alexander: Thank you, Nick. It’s always good to hear your thoughts, and I look forward to getting together again soon.
That wraps up our interview for today.