This week has been wild for both stock market observers and participants. With the market making daily surges in either positive or negative directions and global markets dropping into correction territory at the same time, it is difficult for an investor to stay calm. To make matters seem a bit worse, prominent Silicon Valley venture capital firm Sequoia Capital issued a memo on Thursday to founders and CEOs entitled "Coronavirus: The Black Swan of 2020." Sequoia is the same firm that wrote to companies in 2008 with a presentation called "R.I.P. Good Times."
With Thursday's memo, Sequoia cautions public companies to take measures to minimize the impact of the virus on their employees and businesses. "With lives at risk, we hope that conditions improve as quickly as possible. In the interim, we should brace ourselves for turbulence and have a prepared mindset for the scenarios that may play out," the opening paragraph reads.
Sequoia notes that many countries and businesses, both private and public, are facing challenges including drop in business activity, supply chain disruptions, canceled travel and meetings. The firm suggests that world businesses question their cash, fundraising, sales forecasts, marketing, head counts, and capital spending to help weather the coming market downturn.
But what could this mean for ETF trading?
Since Electronic Traded Funds operate by having various percentages of stock exposure, it may seem hard to hold on to sector ETFs who have been experiencing larger trading volumes and performing negatively with the downward shifts in the stock market. In the mean time, one ETF to look out for a hedge against market losses is Invesco S&P 500 Low Volatility ETF
Other ETFs on the Move:
Health Care Select Sector SPDR Fund
Real Estate and Utilities have also seen larger inflows of investments as market participants are keeping away from financial and technology companies. A common way to trade these is through the funds like Vanguard Real Estate ETF
