When you hear market experts discuss profitable ideas, they’re usually speaking about individual companies as a singular wager that can often yield the most upside (when guessed correctly). However, during volatile periods, such as this present juncture, the exchange-traded fund (ETF) may be preferable as it spreads risk across a basket of stocks. Still, the best ETFs to buy now will differ depending on your objectives.
For those seeking safety and some measure of comfort — and evidence indicates that’s quite a lot of you — a focus on relevant ideas should be your top priority. Since we’re going through a cycle where most market subsegments are severely challenged, you want to spend your time with proven or likely winners. Therefore, pressing concerns, such as oil, represent solid ideas for best ETFs to buy now.
Also, it’s helpful to consider the tried-and-true sectors for survival during recessionary periods. To my knowledge, no one has yet declared this juncture a recession. However, such calls aren’t made until after the brunt of the damage has been inflicted. Thus, it’s time to plan for the best ETFs to buy now.
|USO||United States Oil Fund||$81.15|
|VPU||Vanguard Utilities Index Fund||$158.09|
|IAK||iShares U.S. Insurance ETF||$84.65|
|GLD||SPDR Gold Shares||$173.05|
|XLP||Consumer Staples Select Sector SPDR Fund||$71.77|
|SDY||SPDR S&P Dividend ETF||$123.25|
|ITA||iShares U.S. Aerospace & Defense ETF||$97.38|
Best ETFs to Buy Now: United States Oil Fund (USO)
Although it’s not a popular topic — especially right now with soaring gasoline prices — the hydrocarbon industry is making a killing this year. Given the circumstances that have fueled this rally, it’s best not to fight the tape. Therefore, I’m going to give top spot for best ETFs to buy now to the United States Oil Fund (NYSEARCA:USO).
You can just look at the performance of this bad boy. Up 50% on a year-to-date (YTD) basis, it is absolutely destroying the benchmark SPDR S&P 500 ETF Trust (NYSEARCA:SPY), which is down 15% during the aforementioned period. Of course, technical considerations represent just one component of USO stock.
The other factor — the much more important one — is the painful combination of soaring inflation and Russia’s unprovoked attack against Ukraine. It’s the “perfect” catalyst that has accelerated a sudden loss of global oil supplies and the situation does not appear poised to improve anytime soon.
Vanguard Utilities Index Fund ETF (VPU)
I’m going to be blunt. Following up on the act performed by the USO fund is not an enviable task, as demonstrated by the Vanguard Utilities Index Fund ETF (NYSEARCA:VPU). During the early morning hours of the May 19 session, VPU is about half-a-percent below parity on a YTD basis. Admittedly, that’s not an inspiring statistic.
Well, 2022 has hardly been inspiring, so there’s that. But investors seeking the best ETFs to buy now for safety are also likely to have a longer-term perspective. On that note, VPU is a viable candidate because of its core relevancy. As confirmed through academic research, bad things happen when people flip the switch and the light doesn’t turn on.
Put another way, the underlying utility stocks are permanently relevant. You can yell and scream all you want about societal innovations like blockchain and the metaverse. These innovations require power, so you may want to consider plugging yourself into VPU stock.
iShares U.S. Insurance ETF (IAK)
Ordinarily, unless you’re retired or on the verge of being so, you don’t want to invest too heavily in boring categories like insurance stocks. Sure, they provide incredible safety — relatively speaking to the inherent risks of the capital markets — but they may also be too safe. However, boring is good during rough times and I can’t think of a more boring fund than the iShares U.S. Insurance ETF (NYSEARCA:IAK).
If you want the absolute literal version of this article’s headline, go with IAK stock. During the morning hours of May 19, IAK has gained 0.8% YTD. It’s such an uninspiring stat, but at the same time, it’s a stat you can depend upon. Even during recessionary periods, people won’t want to let go of their insurance policies because the devastation of going without during an unexpected incident could be catastrophic.
Further, an environment of rising interest rates should benefit insurance stocks. The monetary dynamics between longer-term assets and…
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