(2-minute read) With mutual fund and ETF assets increasing 88% between 2016 and 2020, a passive investment bubble has formed.

March 09, 2021 Bubble Alert: Stock Investors Need to Do This Now By Steve Fernandez, Research Analyst, Automatic Fortunes Dear Loyal Reader, Volatility is on the rise in the stock market. The recent market action has highlighted the risk of investing in passive vehicles such as mutual funds and exchange-traded funds (ETFs). Although these investments are often perceived as safe, the opposite has become true — putting all stock investors at risk. With mutual fund and ETF assets increasing 88% between 2016 and 2020, a passive investment bubble has formed. (Source: Bloomberg.) That’s because fund managers have bid up stocks regardless of the financial standing or valuations of the companies. This is great for investors during bull markets, as heightened demand lifts stock prices. But at the first sign of danger, the bubble becomes problematic. This Major Company Is Investing $2 Billion Into “MaaS” Tech … Buy This Stock Now It’s a $70 billion technology that’s expected to blossom into a $1.8 trillion industry in the coming decade. One company critical to this tech could double in the coming months. Here’s everything you need to know about MaaS. This Bubble Is Bad News for Most Investors As investors buy and sell ETFs and mutual funds every day, fund managers must buy and sell stocks accordingly. When net money flow is positive, managers buy stocks. When money flow is negative, they sell stocks. Investors take money from these funds when the market begins falling, and the fund managers must sell stocks, amplifying price declines. This scenario is playing out right now, and the result is a highly volatile market. Implied volatility for the S&P 500 Index has been creeping higher for the past three years. This trend will likely continue for the foreseeable future. (Source: Bloomberg.) This is bad news for most investors. But for those that are positioned correctly, periods of high volatility can bring huge gains.  Options Shine in Volatile Markets Buying options is one way to take advantage of periods of high volatility. Traders can use options to gain exposure to a rising or falling market with less capital than other investment vehicles.  With less capital at stake and clearly defined risk, options shine in volatile markets since volatility can increase the reward-to-risk ratio. Trading with a high reward-to-risk ratio provides investors with the potential for huge gains on every trade. A great way to get started with options trading is to use my colleague Michael Carr’s One Trade strategy. With One Trade, you trade the same ticker symbol each week, giving you the chance to target double- and triple-digit returns every time. Click here to learn why One Trade is a simple way for investors to beat the market. Regards, Steve Fernandez Research Analyst, Automatic Fortunes Ethereum 2.0 Could Send Prices Even Higher The Real Reason Stocks Should Rally in 2021 Self-Driving Cars Are Here — Your Chance to Profit MaaS Will Ignite a Historic $1.8 Trillion Tech Boom     Privacy Policy Smart Profits Daily, P.O. Box 8378, Delray Beach, FL 33482. To unsubscribe from Smart Profits Daily emails, click here. To ensure that you receive future issues of Smart Profits Daily, please add info@mb.banyanhill.com to your address book or whitelist within your spam settings. For customer service questions or issues, please contact us for assistance. The mailbox associated with this email address is not monitored, so please do not reply. Your feedback is very important to us so if you would like to contact us with a question or comment, please click here: http://banyanhill.com/contact-us Legal Notice: This work is based on what we've learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It's your money and your responsibility. Nothing herein should be considered personalized investment advice. Although our employees may answer general customer service questions, they are not licensed to address your particular investment situation. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments carry large potential rewards but also large potential risk. Don't trade in these markets with money you can't afford to lose. Banyan Hill Publishing expressly forbids its writers from having a financial interest in their own securities or commodities recommendations to readers. Such recommendations may be traded, however, by other editors, Banyan Hill Publishing, its affiliated entities, employees, and agents, but only after waiting 24 hours after an internet broadcast or 72 hours after a publication only circulated through the mail. (c) 2021 Banyan Hill Publishing. All Rights Reserved. Protected by copyright laws of the United States and treaties. This Newsletter may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Banyan Hill Publishing. P.O. Box 8378, Delray Beach, FL 33482. (TEL: 866-584-4096)