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3 Funds For Investors To Get A Piece Of This Rally


When it comes to the debt ceiling, there’s a good deal of negativity. However, we are seeing some breaks in the clouds. For example, House Speaker Kevin McCarthy says he doesn’t think the U.S. will default on its debt.

“I think at the end of the day we do not have a debt default,” McCarthy told CNBC.

Also, as noted by NBC News:

“Leaving the meeting, congressional leaders hinted at some progress. McCarthy, (R)-Calif., said that the sides remain ‘far apart’ but that ‘it is possible to get a deal by the end of the week.’”

If a deal is put in place later this week, markets could see an explosive relief rally.

So, what’s the best way to prepare for this possibility? One way is to pick up index ETFs, such as SPDR Dow Jones Industrial Average ETF Trust (DIA). Last trading at around $330, it wouldn’t be all that shocking to see the DIA ETF recover to $342.50 on a recovery rally.

The DIA ETF tries to provide results that mirror the performance of the Dow Jones Industrial Average. Some of its top holdings include Goldman Sachs (GS), Microsoft (MSFT), McDonald’s (MCD), and several more giant companies from various sectors and industries. In short, the DIA ETF allows you to trade alongside the DJIA and gain exposure to some of the most solid stocks in the market.

Next we have the tech-heavy Invesco QQQ Trust Series 1 ETF (QQQ), which was last trading just north of $330, and with an expense ratio of 0.2%, it’s not all that expensive to add to your long-term portfolio. The ETF is made up of 100 holdings with the focus of tracking the NASDAQ-100 Index.

This means some of its top positions include stocks like Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), NVIDIA (NVDA), Meta (META), Alphabet (GOOGL), and Tesla (TSLA) all stocks that have been leading the charge during this market rally.

The final fund we want to examine when trying to find a way to cast a wide net and hitch a ride to what could end up being the next leg of this bull market, the popular SPDR S&P 500 ETF Trust (SPY), whichprovides investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500. Some of its top holdings mirror much of the Q’s ETF. Stocks like Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), NVIDIA (NVDA), Alphabet (GOOGL), and Tesla (TSLA).

All three of these ETFs could potentially rally higher on a conclusion of the debt ceiling chaos and seeing to it that your portfolio balance surges with it.

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Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.

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