This is a list I usually make for myself each year, although not with the clever title. I try to make at least a watchlist of assets I want to invest in for the coming year. This year is no different and with so many different types of assets coming to the mainstream, I thought I’d start this list out with some alternative asset types. This list will include cryptos, stocks, ETFs, and anything else I am considering for the coming year. In Part 2, I spoke about Uber, Coupang, and Ethereum.
7. Robinhood ($16.58|1.66%)
While everyone and their dog is betting on a PayPal (NASDAQ: PYPL) rebound, I’m looking at more speculative fintech plays. I already talked about SoFi (NASDAQ: SOFI) in Part 1 of this series, and now I’ve added Robinhood to my watchlist. Time heals all wounds and Robinhood’s reputation is finally starting to recover from its role in the GameStop short squeeze fiasco. Recently, when Vanguard stated it wouldn’t be listing spot Bitcoin ETFs, Robinhood doubled down and criticized them on social media. Robinhood is the easy entry to investing for the younger generation and their interface is second to none. I don’t really like the gamification of options trading, but people do need to make their own financial decisions. I expect the crypto market to stabilize shortly and send everything higher. Robinhood will be a direct beneficiary of this. The longer we move on from the short squeeze event of 2021, the more Robinhood will be seen as a quality financial platform again.
8. Dividend ETFs
I’ll take a short detour from cryptos and growth stocks to show the value of having a well-diversified portfolio. I generally like to invest in dividend growth funds rather than index funds. If you turn the DRIP on, it’s hard to find a better example of compounding gains than reinvesting dividends over and over. I understand if you want to hold just growth stocks in your portfolio but let me tell you, things can get volatile in a hurry. We just need to look back to September and October of last year to know what I’m talking about. Which ETFs do I like? The three big ones offer diversified enough holdings that you can start adding to all three. My choices are:
Schwab US Dividend Equity ETF (NYSEARCA: SCHD)
iShares Core Dividend Growth ETF (NYSEARCA: DGRO)
Vanguard Dividend Appreciation Index Fund (NYSEARCA: VIG)
9. ProShares UltraPro Short QQQ (NASDAQ: SQQQ)
You might laugh at this but for investors who like to invest in tech, it pays to have a position in SQQQ to hedge your positions. I do this and it’s easy enough to accumulate a few hundred shares of SQQQ and then sell covered calls against them for additional income. It costs you very little to hold SQQQ in your account and you can even offset this by also holding a position in TQQQ and earning premiums off of that as well. It’s not that I expect a crash this year but it never hurts to build up a position to hedge your losses. What I am looking forward to is some volatility in an election year where many people are expecting a smooth ride up to SPX 5000. I think the path higher isn’t as smooth as we think it is and so I’m preparing for volatility with SQQQ in my portfolio.