We ask Tom What is a Good Area for Investing in the Market Now?
Transcript:
Katie Nealis: What is the best area of the market to invest in right now?
Tom Vaughan: Yeah, I think I get asked this quite often actually. And it’s, it’s really difficult to say best, right? I mean, there’s so many areas, and there’s a lot areas that are really like, It’s why we do diversified portfolios, because we’re never sure which one’s going to be exactly the best. But the one area, and I’ll share my screen here and try to describe this.
The one area that I really like right now is transportation. And this is a chart but let me explain the chart just really quickly. This is this is a ETF called XTN is the ticker symbol is the last year. And this is the Spyder series, transportation ETF. And so this is, you know, airlines, railroads, trucking companies, logistic companies, etc. And in this chart, you can see this channel here, this is called a multi aggression channel. So I want to see that going up. Right. So that’s important. That’s why I use the channel. I mean, I’ll show you an example here. Here is a Vanguards long term treasuries, right? Look at that channel is going straight down, you know, some investors are trying to bottom fish and that they use that just the opposite, I tend to be more of a momentum player. So I like to see that channel going up. So if I go back to here, and you know, so this, this is important to me that you know, the 50 day moving average, which is this orange line here is up the 200 day moving averages up.
And then down here, this is what’s called relative strength. So this blue line represents this particular ETF XTN, this red line down here represents the S&P 500. And so when this blue line is above, that means that it has relative strength versus the S&P 500. So one of the things I like about transportation, we just bought this about 10 days ago in our in our traditional model portfolio. And one of the things I like about transportation is I think there’s a dual possible when here, transportation is about moving people and goods, right. So I think both are going to increase here as there’s a reopen, people are going to move around more whether it’s in a car, rental car, whether it’s in you know, plane, and then goods are going to move around more because the economy picks up. And so I think it’s kind of a double win as far as that goes. So I like XTN here.
But there’s other ways of doing it. There’s another one here called a way. Now this focuses on kind of the technology side of travel. So TripAdvisor and bookings and Expedia and Airbnb has also includes Uber and Lyft, for example. So again, theoretically, all of these might do better. And people might use these types of things more than they were during the pandemic. And so we might see some increase in price, you could go a little bit more narrow, and just by the airlines, and all the airplane manufacturers, this is called jets. And that’s, you know, this is a global jet, ETF, all of these are up there moving along. And so I really think that’s kind of interesting.
And then the last one, that you might want to consider this a little bit different. This is called hail. And this is a spider series called Kensho. Smart Mobility. And so hail is electronic vehicles. It is, you know, autonomous driving drone delivery systems. And so these are maybe how people will be moving or goods might be moving in the future. So that the double piece that you could get out of this is not just the reopening, but a lot of these could be also impacted positively by the infrastructure bill, which are talking about trying to pass in, you know, October. And again, I’m not a big, not a big believer in trying to invest prior to a bill passing because it might not happen, but I really like things where you could go into either, you know, it could go either way. So in other words, this could benefit from the reopening and or it could benefit from the, you know, infrastructure plan. So anyway, there’s, I think transportation is definitely a really interesting area to look at right now.