Market Vectors Gaming ETF: Is It Worth The Risk?
There are no sure things in life, and you only have to look at the stock market to see a prime example of this. Whether you're rolling the dice or purchasing stocks, you are assuming risk. One way to mitigate the risk is by hedging your bets, or, your portfolio. If you have a portfolio and you want to keep it healthy and profitable, or at least keep it safe from erratic dips, consider hedging it with Market Vectors Gaming ETF.
Hedging a portfolio involves making an investment for the purposes of keeping your portfolio safe in the face of possible future losses suffered by your other investments. Just like hedging your bets involves improving your odds and increasing the likelihood of you winning big, hedging your portfolio is way of improving the odds of increasing your worth. At the very least it keeps your portfolio safe from dips, lessening the damage incurred if any of your standard stocks suffer a serious drop.
What's An ETF, Anyway?
ETF is the acronym for Exchange Traded Funds, which are funds that track indexes such as Dow Jones, S&P, and NASDAQ. Instead of trying to outperform their respective index, ETFs just try to keep pace with it. A single ETF encompasses a large number of different stocks, thereby lessening the risk of widespread underperformance. Although there are a lot of different ETFs to choose from, we're zeroing in on Market Vectors Gaming (NYSEARCA:BJK) specifically, since the gaming industry's current rising star is something that shrewd investors may want to keep a weather eye on.
Gaming Turns A Profit
The Market Vectors Gaming ETF has almost four dozen holdings internationally, including Steve Wynn’s Wynn Resorts Ltd., Las Vegas Sands Corp, and MGM Resorts International.
The MVG ETF is attracting a lot of interest due to its strong performance. It’s currently up 19% year-to-date, and about 36% over the course of a year’s time, and the upward trend is showing no signs of abating, and in fact, seems poised to keep increasing, especially as new casinos open, particularly in the United States. If you're considering an ETF to round out your portfolio, this may be a good time to consider gaming.
In addition to new casinos opening in the United States, Macau, the world's largest gaming hub, is poised to become a $100 billion market. If you want in on that action, the time to make a move seems to be now.
Everything Has A Risk
The only two certain things in life are death and taxes. Everything else is up for grabs. Hedging can protect your portfolio, yes, but it also cuts into potential profits. The protection that an EFT offers may not be worth the resources invested in it. Money spent in hedging may be better utilized to increase your overall long-term, buy-and-hold investments.
What it all comes down to is the reliability and consistency of your stocks. If they tend to be volatile, then hedging may be a good safety net.