Panic Selling Among ETF’s…No Surprise Here

If you’ve been reading our emails for a while you know we’re not big fans of ETF’s.  In fact, we’ve written numerous articles about why you should avoid them (HERE).

Recently – according to Lipper’s – Emerging Market ETF’s have experienced their worst-ever net outflows during 3Q19.

Check it out:

“For the trading week ended Wednesday, Aug. 28, this negative net flow marked the tenth net outflow in the last eleven weeks for the peer group during which over $11.8 billion has left the group’s coffers. As part of this slump, the emerging markets funds group suffered the worst weekly net outflow in its history (Lipper began tracking fund flows data for this group in 1993).” 

Of course, they’re blaming it on the trade wars with China, but that’s not the real issue here.

What the boyz aren’t telling you is that emerging markets are hoarding dollars.

That’s right.  They want as many greenbacks as they can get their hands on.

They know that our strong dollar is not only killing their purchasing power, but there is a shortage of dollars around the globe.

This all goes back to confidence, or lack thereof, in governments which leads to panic cycles in currencies.

This is likely to be one of the earliest of panic cycles coming out of Asia with more to follow.

The fallout from this should spill over into Europe and put pressure on liquidity of stocks…especially ETF’s.

When this happens investors will run for the exits and sell their ETF’s.

But the $64 Billion question is: “To Whom?”

Panic cycles can also be great opportunities for “those with ears to hear.”

Learn how to profit in them (HERE).

And share this with a friend.  They’ll thank YOU later.