A Safe Way to Invest in Tomorrow’s Mega Trends… Starting Today

Editor’s Note: There are big things happening at the Club… and it’s only four days into the new year.

For several years, Members have been asking why there isn’t more exchange-traded fund (ETF) and index fund coverage in Oxford Club content. While Chief Investment Strategist Alexander Green regularly emphasizes the importance of using an asset-allocated group of Vanguard funds as your Core Portfolio – his Gone Fishin’ Portfolio – the Club has been actively searching for an ETF expert.

And we finally found him.

Earlier this week, we added ETF Strategist Nicholas Vardy to our already impressive team of financial gurus.

Based in London, Nicholas is an accomplished investment guru with several successful newsletters to his name. He holds a bachelor’s degree from Stanford University and a J.D. from Harvard Law School. He is also an associate of the Adam Smith Institute in London and the Chatham House think tank.

Nicholas is a widely recognized expert on ETFs and, in the near future, will offer an exciting new trading service based on this exploding asset class.

Until then, Nicholas is teaming up with Alex and writing for Investment U and The Oxford Communiqué.

In today’s article, Senior Research Analyst Anthony Summers looks at just how important ETFs and index funds are to your portfolio.

– Rachel Gearhart, Senior Managing Editor

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Delray Beach, Florida – Last month, a friend of mine asked me the following question: “If you could recommend just one pot stock for 2018 – one that could blow every other stock out of the water – what would it be?”

He was putting me on the spot… and he knew it.

You see, I don’t like to make stock picks. I prefer that folks do their own due diligence (unless they’re paying me to do it for them).

This friend knew that. So he boldly asked me… in front of witnesses.

But I kept my cool and gave him the most intelligent answer I could offer: “I honestly couldn’t tell you.”

You can imagine the look of disappointment on his face. But it was the honest truth.

I have several stocks in mind that I think will continue to do very well. But the ONE stock to buy over and above the rest? Who knows?

But I didn’t want to leave him hanging with that response. So I immediately followed up, “To be honest, I wouldn’t bet on just one stock though. There are many great stocks to invest in. But if I really had to make one recommendation, then I wouldn’t recommend a stock at all.”

Now that I had his attention, I continued, “I’d rather make a less concentrated bet. Instead of one stock, I’d invest in a fund that tracked the industry’s performance.”

I told him I’d buy the Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF). It’s an ETF that tracks the performance of North American marijuana companies.

It also happens to be the first marijuana ETF on the market.

Since its inception in April 2017, the Horizons Marijuana ETF has blown away the broader market and has more than doubled in value.

I like this play because it offers instant diversification within a niche market. It’s perfect for investors who are bullish on an industry but unsure of which stocks to buy.

It’s also a clear demonstration of the overall power that ETF investing can have in your portfolio.

No one understands that more than Nicholas Vardy – a newcomer to The Oxford Club team and a longtime veteran ETF analyst and investor.

Nicholas knows that despite its popularity, many investors have yet to grasp the full power and innovation of ETF investing.

One important feature of ETFs is their diversity.

“They offer an astonishing range of asset classes, investment philosophies and niche trading strategies,” wrote Nicholas in a recent Investment U article. “ETFs allow you to custom build any kind of portfolio you want.”

You can find ETFs that track most industries. That allows you to create a specially tailored portfolio that reflects your interests, your goals and even your risk tolerance.

Take leveraged ETFs as an example… For those with a strong stomach for volatility, leveraged ETFs can double or even triple the daily performance of traditional ETFs tracking the same index.

Of course, that includes both gains and losses. So you’ll want to be careful with those.

Another key feature of ETFs is their relative tax advantage over standard mutual funds. (Probably worth keeping in mind in advance of tax season.)

According to Nicholas, “When a mutual fund investor redeems their units or shares, the fund sells securities to pay them and generates a taxable capital distribution. When an investor sells an ETF, they just sell it to another investor and no taxable distribution is generated.”

We, of course, couldn’t agree more about these advantages. It’s the reason we recommend using ETFs in the Wealth Pyramid’s Core Portfolio. It’s also why I recommend ETFs to people in my own life… people like that bold friend of mine.

It’s one of the simplest and easiest ways to profit from fast-growing markets.

Take another sector that I’m excited about: information technology. I’ll admit “information technology” is a very broad sector. But here’s the thing…

Just about every corner of the global economy is being transformed through the advancement of information technology. You’ve seen the onslaught that e-commerce has wrought on the retail industry. But that’s just the beginning…

Self-driving vehicles… data analytics… machine learning and artificial intelligence… cloud computing…

There is a vast range of disruptive trends brewing in the great deep of the technology sector.

And what better way to profit from those developing trends than with the ARK Innovation ETF (NYSE: ARKK)?

This ETF tracks the performance of stocks behind disruptive trends, including e-commerce, social media, autonomous vehicles and even the more recent rise of bitcoin.

Since the start of 2017, this ETF has generated more than four times the return of the S&P 500. But I expect even better returns in the years to come.

It’s exactly this sort of niche targeting that gives ETFs their simplicity and strategic advantage – for both active and passive traders.

Good investing,

Anthony