Tags: Donald Trump | volatility | ETF | investing

Trump Volatility May Mean Gains for 4 Safe-Haven ETFs

Trump Volatility May Mean Gains for 4 Safe-Haven ETFs

(Dreamstime)

By    |   Friday, 10 February 2017 11:59 AM

President Donald Trump has shown his ability to make or break a stock – and the U.S. dollar – with tersely worded statements on the Twitter micro-blogging service.

The bigger potential worry is the effect of his administration’s policies on the U.S. economy and global commerce as tax reform and trade agreements are hammered out. Investors who are concerned about wild swings in asset markets may find themselves seeking safe havens.

“A host of challenges laid by Trump seem to be blocking the bullish trend in the stocks, leading to increased market uncertainty and political worries,” according to Zacks Investment Research. “Trump's protectionist and anti-trade policies like immigration curb, travel ban, border tax, and termination of trade agreements have sparked concerns over global trade, economic growth and political stability.”

The research firm points to Trump’s withdrawal from the 12-nation Trans-Pacific Partnership deal, a hallmark of the Obama administration, as one example that may backfire on U.S. companies.

“Trump also stated his plan to build a wall along the U.S. southern border to keep Mexican immigrants away and wants Mexico to pay for it,” Zacks writes in a blog post for Seeking Alpha. “The President is considering a 20% border tax on imports from Mexico that could help in building a U.S.-Mexico wall. This could deepen the crisis between the two neighbors and result in a trade war.”

The research firm provides a list of four exchange-traded funds that may help investors ride out volatile markets as Trump pushes the U.S. in a new direction.

1. iPath S&P 500 VIX Short-Term Futures ETN (VXX): “While volatility products have been terrible performers over the medium and long terms due to a contangoed market and a steep roll cost, they are intriguing picks during periods of turmoil or uncertainty.”

2. SPDR Gold Trust ETF (GLD): “The fund tracks the price of gold bullion measured in U.S. dollars, and kept in London under the custody of HSBC Bank USA.”

3. iShares 20+ Year Treasury Bond ETF (TLT): This ETF “provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Year Bond Index.”

4. Guggenheim CurrencyShares Japanese Yen Trust (FXY): “Yen is considered a safe haven currency in times of uncertainty. Investors could tap this via FXY, which appears a great way to play a future rise in the yen relative to the U.S. dollar.”

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President Donald Trump has shown his ability to make or break a stock - and the U.S. dollar - with tersely worded statements on the Twitter micro-blogging service.The bigger potential worry is the effect of his administration's policies on the U.S. economy and global...
Donald Trump, volatility, ETF, investing
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2017-59-10
Friday, 10 February 2017 11:59 AM
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