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Warren Financial Service CIO Randy Warren on why investors should consider ETFs for their portfolios in the year ahead.
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-- -- -- and we are just four days away before the fiscal cliff deadline and as many investors scrambled to adjust their portfolios.
We've been a money manager who says he's got three plays that could -- do you.
20%.
No matter what the fiscal cliff resolution ends up being joining us now is.
-- Randy Warren at Warren financial services CIO.
Thanks for joining us how nice to be here thank you.
So right at the top I'd love to know.
Why is -- they ETFC feel can be a little bit more resistant to the the waves coming in the shocks -- coming out of DC.
I think -- go for some sectors that aren't necessarily in the cross hairs so what's going on in the house and senate right now.
So I'm looking at things like at the financial sector.
I it's been beaten down over the last few years we all know about all the history that's gone on since 20072008.
Some of the banks failed in the big banks failed.
And also the problems in Europe a lot of the banks had trouble in Europe over the last couple years they're starting to rebound now.
There's an opportunity for improvement.
In the financial sector.
I wanna pull you back a second read before we talk about specifics and talk about wind you know timing is everything you can buy the right time -- the wrong -- you have some of the called.
An event horizon index zero being the point at which you should go ahead -- full speed and by a lot of stuff for a 100 forget about so called.
You think we're at about 35 now which -- you say is is the yellow flag so should we hold back.
On these purchases for a while until -- fixings at DC.
Well if you really -- -- time a short term share you could hold back but.
That I think what's happening in DC is probably going to be resolved in the next few weeks I mean that's what we hear right.
So we you know it's been really trying to time that over the course of a couple of weeks is very difficult but may be waged at least until into -- yet another couple weeks getting it right -- right and you wouldn't hurt but these sectors are a little bit resistant to you know to what's going on down there anyway so.
Thank you saw the home building number that came out this morning and that was very very -- that sector is doing well.
Regardless of what's happened by the way the home building eight X eight should be used the ETF the exchange traded fund that you would recommend exactly the XHP is a great way to play it -- -- on things like Home Depot the down lows.
Some of the home builders they own Whirlpool.
Things that go into home.
Why would you choose to go within ETF vs picking out some of these -- to consider when you when you pick a basket.
Right -- so if you picked the best ones out of that group -- sure you would do much better than picking the ETF.
But ETF is safer you get -- whole basket say you're not exposed to the stock.
The single stock risk.
I'm so once stock has a problem you know the whole portfolio doesn't go down.
-- like home building.
I was also interested to learn the also led by -- attacked axle and usual considering how risky and.
Sector can make yet that's for the people want to take a little bit more risk the Biotech sector has been doing well.
The small cap bio hasn't done as well as the big tech big cap Biotech.
But it's a good sector there they're making money the big pharma is looking to Biotech to -- -- be there pipeline.
Of new drugs that are coming through and we got a new elected democratic president who's you know putting through health care reforms and that's gonna expand the amount of people that can let -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- You know it's not too late because Bank of America was beaten down so badly the last five years.
-- it started recommending Bank of America in August of 2000 planet and so about a year and a half ago.
-- when it was about six bucks.
What we look at the beginning of the year is about five bucks -- to cut it took a little time to work to take off.
But 2012 began the the recovery and I think we've got at least another year or two ago in that recovery.
And how -- you talk about holding these the home building ETF banking Biotech are you a long term holder and short term holder.
Definitely longer term I would it recommend holding for about a year and then re evaluate next year at this time.
Whether or not want to hold on for 2014.
Randy Warren from Warren financial service great to see Randi thank you very much bigger appreciate --
