Investors Try New ETFs, Amid Crash Fears
Worries of a financial crash coming by October 2006 continue to dog investors. Commodities and real estate are the center of booming prices and speculative hopes, but are they beginning to look like the hi-tech, internet, super wealth fantasies of the 1990s. New mutual funds invest in gold and silver, and of course oil related companies have also been going up. The Vanguard Precious Metals has closed the door to new investors; it's as big as it wants to be. Other great funds include the Midas Fund and US Global Gold Shares.
The other big thing hitting the markets should not be confused with mutual funds. It's ETFs, Exchange Traded Funds. ETFs are a basket of securities that are often designed to mimic various stock trading indexes. There is also another similar instrument, called index funds.
ETFs come in different shapes and sizes. Looking at a major broker, here are some examples of them. Biotech Holders- sponsored by Merills. Lynch. Fifty-two week high was 212, and its Fifty-two week low was 167, iShares U.S Pharmaceuticals, sponsored - by Barclay's Global Investors, high 51.6, low 46.8, or another example: Currency Shares British Pound, Sponsored by Rydex, fifty-two week high, 191.99, low 181.17. So this is a diverse group of investments, some of which are quite volatile, while others undergo little change, since for example, the value of the British Pound has not changed all that much.
Some analysts believe that the coming financial crash will center around mutual funds. Some 90 million or more Americans have a stake in these, and if the stock market begins to crash, a panic could set in rapidly in this herd-like crowd. There also could be a bigger shift into hedge funds and into funds investing in hedge funds, since these have the reputation at least of being totally neutral when a stock market crash hits. They are moving funds all over the world from the offshore money-centers, and seem immune to swings in the market in any nation.
A stock market or other financial market crash does not have to be the end for that market. It is usually a readjustment from over-speculation that occurred beforehand. For example, you already have the beginning of the crash in the real estate market and the beginning of its effects. There is a mini-crash of the Homebuilder's Index, including companies like BZH, Beazer Homes USA, and Hovnanian (HOV), both of these leading home builders.