Evening all.
The markets really are something else at the moment. Flash Crashes, Oil Wars, Market Circuit Breakers, Missile Tests, Pandemic Virus, you name it we got it!
I closed 2 more of the index shorts today, one on $UK100 and one on $SPX500 to free up more capital and lock in a bit of profit from these hedges. They were not big profits but they have been helping reduce volatility and risk.
There’s a lot of talk that markets need to get worse before they get better, but I did deploy some capital today, and in particular I’ve honed in on the iShares PHLX Semiconductor ETF [SOXX] as an exciting prospect for the future and well worth buying even if markets do go lower from here.
SOXX hit the 20% correction level today, and I’ve been waiting a while for this move. I’ve always maintained some kind of investment in semiconductor stocks and still have AMD and Intel positions but in these very uncertain times I’ve become more attracted to the ETF’s for the added diversification of holdings.
Overall the Top 10 has a weighting of 61.59% and the ETF has a total of 30 holdings.
There are 3 key things I like about this ETF:
- It avoids direct exposure to sectors like Travel, Banks, Energy, Dining and In-Person Entertainment which are being decimated by the Coronavirus situation.
- There are several tech areas I’m quite interested in like Deep Learning/AI, EV’s, Streaming Media, Next Gen Internet, Autonomous Vehicles and Cloud Computing. All of these industries are dependant on the development of evermore capable semiconductors and while demand can fall it will remain strong and ultimately increase.
- Companies like Nvidia and AMD are big favourites with investors and so when the market eventually bounces, they will move fast, helping propel this ETF upward. The more panic now the better for getting these at bigger discounts.
This ETF is therefore going to become a core holding for the portfolio and I plan to invest more into it, hopefully as I cash-in the NASDAQ shorts if the broader market correction continues this week.
There’s definitely some pain being experienced by the portfolio at the moment, but I will continue with the process of buying into the weakness while trying to get the best read I can on timing investments so not to go fully-invested too soon before the correction exhausts itself.
Thanks for your time.
https://www.ishares.com/us/products/239705/ishares-phlx-semiconductor-etf
$SOXX $NSDQ100
