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Say Hi To IBUY And Bye To XRT

The best long term investment strategy is one that takes advantage of macro trends. If you are on the right side of a major trend, there is not much you can screw up, as your position(s) have a strong tail wind. One of the biggest and most obvious macro trends for 2017 is the shift in shopper preference from brick-and-mortar to online retail. This trend has been very evident this winter and it appears to be just getting started. I am happy to say that it is possible for investors to play this macro trend with an ETF pairs trade: long the Amplify Online Retail ETF (NASDAQ:IBUY) / short the SPDR S&P Retail ETF (NYSEARCA:XRT).

Before I go any further, I would like to mention that IBUY started trading in Apr 2016 and only has $7.1m Assets Under Management (AUM). I am very surprised that IBUY has not attracted more attention, but I believe that the fund will eventually experience serious inflows as the theme catches on, or as a result of this article going viral, whichever comes first. In any case, the low AUM raises the risk level for this strategy and it may not be suitable for risk-averse investors, or for newbies who are unfamiliar with ETFs.

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by Steve Auger