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Dave Nadig
2:59
Good afternoon and welcome to ETF.com Live!
As always, you can enter your questions in the box below.
I’ll get to as many as I can in the next 30 minutes or so.
After we’re done, well post a transcript at this same address, in case you missed something.
3:00
So with that, let's start stumping the chump:
(That would be me).
Bart Ramos
3:00
Will the current trade wars impact exchange traded products, either negatively or positively?
Dave Nadig
3:00
Well, importantly: ETFs are just a wrapper.  You can buy everything from Oil futures to inverse equity exposure, China, US, Europe, you name it.
3:01
So there's nothing about the ETF structure that is impacted by the current trade wars one way or another.
As far as global economic impacts, well, I'm personally of the belief that tariffs are inherently bad for everyone.
They're a tax on the economy.
3:02
So, you would expect, for instance, a prolonged china trade war to be bad for BOTH chinese and US GDP.
Of course, you get very narrow situational winners and losers in specific sectors/companies.
but in general: none of it's great for global equities.
But you can play both sides of that with ETFs - you can always go short if you think its all going down!
3:03
Bunch of questions like this so I'll cue them all up (building on that last one):
Sarah Smythe
3:03
Good morning Dave, Do you think the S&P 500 will break 3000?
Daphne Rutgers
3:03
If the bear market truly starts soon, what does a smart investor do to protect their portfolio?
Dave Nadig
3:03
Lots of market anxiety today I guess!
3:04
So, I'm not generally in the "make the call" business, but a few thoughts.
As a quant nerd, I can't help but look at things like CAPE and other valuation metrics once in a while.
And sure, things look a little bit expensive.  But then, they looked expensive last year too.
3:05
And even Shiller himself will suggest that CAPE is a terrible predictor of 1 or 3 year returns, and at best a guidepost for 10 year forward returns.
As long term investors, your changes of getting the timing right of making a BIG MOVE are incredibly small.
A lot of the fundamental economic underpinings look fine: spending, earnings, etc.  But of course, valuations are high.
3:06
So what do I do personally? As little as possible.  Boring tends to win over the long term.
I do go to a lot of financial advisor events, and the thing I hear most about is really around the edges: things like defined outcome products (the Innovator series) or using options to earn a little rent of your equity position (Buy/Write strategies) and so on.
Which are all ways of just ever so slightly hedging your bets.
Jeannie Altoon
3:07
Hello Dave. In your opinion, is there one element more than others that most attracts investors to an ETf: what it gives them exposure to, what its expense ratio is ...?
Dave Nadig
3:07
Well, if you look at the data, I would say "cheap" is probably the thing that moves the most assets.
Low cost Vanilla exposure has topped the flows charts for years now.
you get on occasional flash of something else: low vol funds, MJ, etc.
3:08
but longer term, cheap seems to win
The second thing I most often here about is simplicity.  Most etfs are pretty straightforward, and just do what they say on the box.
I think for investors coming from active mutual funds, that's an anxiety reducer.
tmuscat27
3:08
I came across an etf that has the sloan ratio as one of their metric and I would like to ask for the ticker symbol if possible. Also which etf do you suggest for the long term with a decent return.
Dave Nadig
3:08
Now that's one I haven't heard of in a bit.
3:09
So for those not quite so value nerdy: the sloan ratio is a way of assessing whether a firm is "messin' around" with their accruals when you're evaluating it vs. peers.  Off the top of my head I think its Income minus a few cash flow from operations metrics, over assets.
3:10
I dont know an ETF that SPECIFICALLY targets this, but I will point you to two good pieces on Value stocks from contributors to our site.
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