Has the “Puke” Phase Arrived?

From the Baltimore Clubhouse – Who is Nicholas Vardy?

This week The Oxford Club launched an exciting new service called Oxford Wealth Accelerator. This service features Nicholas Vardy, a well-known expert on exchange-traded funds (ETFs).

Nicholas’ service offers two ETF portfolios – one tactical, the other strategic.

I recently caught up with Nicholas to get his take on the markets and his new service. Here’s our back and forth…

So, Nicholas, the markets have been all over the place since early October, but mostly down. What’s your take?

Yes, the financial markets have been as treacherous as I’ve seen them in many years. The whipsaws are dizzying.

And I say that as an experienced emerging markets investor who has endured more than his share of financial crises – including the meltdown of the Russian stock market in 1998.

I focus a lot on market sentiment, which I believe ultimately drives markets. So many market sentiment indicators have been so negative for so long, I’m astonished the market is still faring as badly as it is.

Every day I think the “puke” phase has arrived, only to have the market fail to sustain a rebound.

At the same time, I have also learned that “this too shall pass.” And the worse it feels on the way down, the bigger the bounce on the way back up.

I have a friend who managed money in Russia in 1998 and endured a 95% drawdown. Five years later, he became one of the top 25 highest-earning hedge fund managers on the planet.

That’s good to hear. We’re all about rebounds. Still, you’re a firm believer, I think, that there’s money to be made in down markets too, right?

Yes, absolutely. But it does take a shift in mentality.

Most investors think in one dimension: Simply buy a stock and watch it go up. But in these kinds of markets, you need to think in terms of investing in other asset classes – and even betting against certain markets.

During normal times, investing is like playing checkers. At times like this, investing becomes a complex game of three-dimensional chess.

And exchange-traded funds allow for just that, I understand.

Exactly. Most investors are conditioned to just buy and hold U.S. stocks, Warren Buffett style. But ETFs allow you to invest in other assets, like foreign stocks, commodities and even currencies.

In addition, you can make money by betting against – or shorting – a certain asset class.

Often, you can even place a leveraged bet on your favorite investment idea.

The possibilities with ETFs are vast.

Your new service offers two portfolios for subscribers, a shorter-term Tactical Portfolio and a longer-term Strategic Portfolio. Can you give us a brief take on these?

The Tactical Portfolio is all about generating short-term gains. It’s the portfolio that is most similar to other Oxford Club trading services you may subscribe to.

I’ve developed a proprietary “Money Matrix” that allows me to track hundreds of ETFs across all asset classes – and recommend those with the highest short-, medium- and long-term momentum.

This leads to an unconventional portfolio – and it’s this portfolio that you should focus on if you are a short-term trader.

The Strategic Portfolio, on the other hand, is a longer-term “strategy allocation” model. It is not a portfolio you need to trade actively. This portfolio consists of 10 investment strategies, each of which has had a strong historical track record of outperforming the overall market.

Each of these strategies is represented by a “smart beta” ETF index strategy based on specific factors. These include value, momentum and quality – as well as other strategies like investing in high-dividend stocks.

Smart beta ETFs tend to offer superior performances relative to traditional market cap-weighted indexes. Even an extra 1% to 2% outperformance per year can make a massive difference over time.

Wow. That’s a great service. Congratulations on the big launch. And I understand you’re leading the pack in The Wall Street Journal stock-picking contest. Can you tell us about that?

I entered the contest on August 28 with Direxion Daily MSCI Brazil Bull 3X ETF (NYSE: BRZU) – a triple-leveraged bullish bet on the Brazilian stock market. In betting on Brazil, I was looking for a single thing: a psychological catalyst that could move the market over the short term.

And Brazil had that catalyst in presidential candidate Jair Bolsonaro – a colorful, far-right former army captain – dubbed the “Trump of the Tropics.”

I recommended the Brazil Bull 3X ETF based solely on my expectation that the Brazilian stock market would soar on the prospect of a Bolsonaro presidency. And this ETF offered a triple-leveraged way to bet on that.

Luckily, Bolsonaro won the election and events unfolded as I expected.

Wow, what a prediction, Nicholas. Well done. Last thing: Congratulations are also in order on a personal level. I understand you’ve got a new addition to the family?

Yes, our daughter, Vera, was born on July 10 of this year. Luckily, she inherited her mother’s always cheerful disposition and is the happiest baby on the block.

Thanks, Nicholas.

And good investing,

Matt

P.S. As you can see from above, Nicholas has applied his expertise to bring you one of the most impressive momentum investment systems we’ve ever seen!

Click here to learn more now. Or call members of our VIP Services Team at 888.570.9830 or 410.864.3090. They’ve cleared their schedule to help get you acquainted with this exciting new service and take your questions.