ETFs & Markets with Todd Sohn: The Equity Market Freakout of 2024

08/07/2024

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Strategas Asset Management ETF Strategist Todd Sohn walks us through the meaning behind this week's spike in VIX, the historical context of the equity market correction, and more in this week’s video.

Definitions:

The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States.

An exchange-traded fund (ETF) is a pooled investment security that can be bought and sold like an individual stock.

Fund flows represent the cash that goes into or out of companies, financial assets, sectors, or other market categories.

Sector ETFs focus on groups of companies that are pursuing the same type of business, like energy, health care, utilities, or technology, for example.

A pause is a period where the Fed keeps rates “higher” and monitors the development of the economy and inflation.

Forward performance testing provides traders with another set of out-of-sample data on which to evaluate a system. Forward performance testing is a simulation of actual trading and involves following the system's logic in a live market.

Mean reversion is a financial term for the assumption that an asset's price will tend to converge to the average price over time.

A maximum drawdown (MDD) is the maximum observed loss from a peak to a trough of a portfolio, before a new peak is attained. Maximum drawdown is an indicator of downside risk over a specified time period.

Volatility is an investment term that describes when a market or security experiences periods of unpredictable, and sometimes sharp, price movements.

The CBOE Volatility Index (VIX) is a real-time index that represents the market’s expectations for the relative strength of near-term price changes of the S&P 500 Index (SPX).

The SPDR S&P 500 ETF Trust (SPY) is an exchange-traded fund that seeks to track the performance of the S&P 500 index, which is a basket of the largest publicly traded companies in the U.S. SPY is the oldest ETF listed on a U.S. exchange and is one of the most popular ETFs in the world.

This communication was prepared by Strategas (“we,” “us,” or “our”), a brand that offers investment advisory services through Strategas Asset Management, LLC, an SEC Registered Investment Adviser, and provides research to institutional investors through Strategas Securities, LLC, a broker-dealer and FINRA member firm and an SEC Registered Investment Adviser. This communication represents our views as of 08/05/2024, which are subject to change, and presented for illustrative purposes only. The information contained herein has been obtained from sources we believe to be reliable, but no guarantee of accuracy can be made. This communication is provided for informational purposes only and should not be construed as an offer, recommendation, nor solicitation to buy or sell any specific security, strategy, or investment product. This communication does not constitute, nor should it be regarded as, investment research or a research report or securities recommendation and it does not provide information reasonably sufficient upon which to base an investment decision. This is not a complete analysis of every material fact regarding any company, industry, or security. Additional analysis would be required to make an investment decision. This communication is not based on the investment objectives, strategies, goals, financial circumstances, needs or risk tolerance of any particular client and is not presented as suitable to any other particular client. Past performance does not guarantee future results. All investments carry some level of risk, including loss of principal.

Strategas Asset Management, LLC and Strategas Securities, LLC are affiliated with Robert W. Baird & Co. Incorporated ("Baird"), a broker-dealer and FINRA member firm, and an SEC Registered Investment Adviser, although the firms conduct separate and distinct businesses.