How to Best Put Your Money to Work This Summer

In less than two weeks, you’re looking at a major shift in the markets.

But that doesn’t mean your chances to make some real money will dry up – quite the opposite, actually.

In fact, the numbers are in…

And these are the three best ways to put your money to work this summer.

Three Sectors to Play Right Now

Investors may be off focusing on their vacations right now instead of the markets – but that doesn’t mean you shouldn’t be taking advantage of the this time to make some real money. Now one thing you can do is research your broker’s summer outlook to pinpoint the best stocks to trade.

This is Charles Schwab’s three-to-six month outlook, as an example:

Schwab Sector Views

But as I always say… why trade the needle when you can trade the proverbial haystack?

Rather than going through the stress of trying to pinpoint that one best stock to trade (and then hoping you’re right), there’s a much better way to do things – trading the whole sector.

Trading the sector by way of trading exchange traded funds (ETFs) is a way to keep the risk of something unexpected, like a bad earnings report, from damaging your entire portfolio. When you’re trading an ETF, you’re not just putting your money down on one or two stocks, you’re putting your money down on a basket of different funds. So one stock, or even more, could have a bad day at the office, so to speak, without taking down the entire fund – and your account.

Personally, I’d rather take my chances on a “bag” full of stocks than to get hammered to the downside on one bad stock pick.

But you can take it a step further by trading more than one ETF, which will diversify your portfolio and spread out your risk even more.

And here are the three best ETFs by way of asset value to put your money to work this summer:

  1. iShares Nasdaq Biotechnology ETF (IBB)

Of the many reasons to consider trading the biotech industry, perhaps the most compelling right now is that biotech stocks have ganed more than 7% this week alone – the sectors best week since Election Day, with the best still to come. In fact, biotech stocks have historically performed well in August, in part, due to the annual biotechnology conference.

And IBB, the largest ETF in the sector, is already trading at its highest levels since January 2016. Here are its top five holdings:

Holdings Table

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  1. Utilities Select Sector SPDR ETF (XLU)

We’ve already talked about why the utilities sector is a strong profit opportunity. And with yet another record-setting summer ahead, people will be using much over these next few scorching summer months – which benefits utitilities companies. But why worry about picking individual utility stocks when you can trade the whole sector by way of XLU?

Here are its top five holdings:

Holdings Table 2

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  1. Consumer Discretionary Select Sector SPDR Fund (XLY)

People are out more spending money on hotels, resorts, movies, and theme parks – like Walt Disney World.  And that directly benefits the consumer discretionary select (or entertainment) sector – specifically XLY, which is the largest ETF in the group.

As you can see, Walt Disney Co is among its top five holdings, too:

Holdings Table 3

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And the best part is…  all three of these ETFs are ones you can trade options on.

In fact, members of my premium service had the chance to bank over 60% gains in just 72 hours on this ETF. And I’ve got a brand new trade coming Monday that I expect to return 100% in four days or less. To find out more, just click here.

So as far as trading strategies go, consider long calls or bullish spread ideas, with the idea that strength may beget more strength.

To your continued financial success…

Tom Gentile

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