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In the investment markets – the portions that affect you and me – exchange-traded funds (ETFs) have emerged as the ultimate market Disruptor.
This massive shift is due to more than investor fickleness. ETFs trade all day like stocks – making them better than mutual funds. There are more than 1,500 of them, according to ETF.com. There's an ETF for almost every industry, index, asset class and risk-exposure play you can think of.
ETFs are modern-day magical trading tools.
But if you know anything about magic, you know there are times where the trick goes awry.
The hat lacks the rabbit.
The same types of tragedies can befall ETF investors. It's rare. And it's not intentional – it's just what happens when the magic trick doesn't work… as millions of ETF investors and traders just found out the hard way.
Here's what happened, what's going to happen again and a strategy that will protect you – without having to "cash out" and hide yourself on the sidelines.
And back here, I'm going to show how to make the ETF magic work for you… as long as it holds.
In short, I'm going to give you the best of both worlds…
Problems for ETFs on Black Monday
On the morning of Aug. 24, all hell broke loose in ETF land.
The "magic box" didn't work.
A lot of those stocks were temporarily halted when they reached "limit up/limit down" levels. Lots of stocks didn't open near the time they should have. Against that backdrop – throughout the morning – futures prices were swinging widely and triggering their own halts.
This magical breakdown created a wicked problem for ETFs.
About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.