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Due to the recent global crisis Travel restriction’s have been put in place which has led to Flights been cancelled, planes being grounded & thus the AIRLINE STOCKS have TAKEN A REAL HAMMERING!!!!
WATCH THE FULL YOUTUBE VIDEO BELOW!
Is the Airline Industry doomed?
Or WILL THE AIRLINE INDUSTRY TAKE OFF AGAIN & reward those brave investors which decided to hop on board!?
IN this video, we are going to find out by exploring my favourite AIRLINE ETF or Exchange trading fund & whether you should invest into the volatile airline industry!
LETS DIVE IN!!!!
WHAT IS AN ETF?
AN ETF is an exchange traded fund which is basically a basket of stocks that tracks a particular segement of the market.
Investing into a fund such as this can be a great way to diversify your investment across multiple companies in an industry extremely easily!!
They also are one of the lowest cost forms of investment both in terms of taxes & investing fees.
Now in other industries there are many different ETF’s which you can use however, the unique thing about airlines is they have just one ETF which is purely focused on AIRLINES.
US GLOBAL JETS ETF (JETS)
THIS IS THE US GLOBAL JETS ETF (JETS) which includes the Major US airlines such as American Airlines (AAL), Delta Air Lines (DAL) and Southwest Airlines (LUV).
The fund also has some exposure to other companies in the aviation industry such as aircraft manufactures & airports. With a small portion in international companies.
Despite the JETS ETF being a Multi cap fund, it is weighted strongly towards large market cap airlines.
THE FUND was DOWN by over 50% in the first quarter of 2020. With many VALUE INVESTORS HOPING ON A AIRLINE RECOVERY & THUS LARGE REWARDS!!!
FINAL THOUGHTS?
These airlines are facing major issues, with many burning up to $100 million dollars per day to stay afloat!!
Warren Buffett also stated the airlines will need to borrow at least
“$10 or $12 billion each,” and required to be paid back out of earnings over some period of time.” Which is not a good sign for shareholders.
However, on the upside will we always need to fly & I believe travel demand will return at some point.
How this will look exactly is yet to be seen.
I personally have a very small stake in both DELTA airlines & southwest airlines as they are best placed to whether this storm!
HOWEVER, It is a very risky investment & that’s why I only have a very small amount of my portfolio in those two airlines.
Now remember this is not financial advice, so please assess your own investing goals & risk tolerance don’t invest anything which you can’t afford to lose!
SO DO YOU THINK the AIRLINE Industry will take off again & COULD BE A GREAT TURNAROUND INVESTMENT?
COMMENT Your thoughts on the youtube video!
