Why the trade war with China is a buying opportunity

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Amid heightened market volatility and a protracted trade dispute with China, ETF Trends CEO Tom Lydon contends now may be the right time to invest.

“I wouldn’t be surprised like many of the corrections we’ve seen in the last five years, this would be a buying opportunity,” Lydon tells Yahoo Finance’s “The Ticker.” “You can look around the world and can actually get some stocks and the ETFs that represent them pretty cheap.”

Lydon also points to emerging markets as an opportunity for long-term investors, as stocks plummet amid mounting trade tensions with China. “Most investors in the U.S. have a home country bias, where way too much of their allocation is to U.S. stocks. Look at some of the opportunities in developed markets and mostly in emerging markets, where you can get them almost half-off from a P/E ratio standpoint,” he said.

Emerging markets are in focus, as trade tensions with China weigh on stocks.
Emerging markets are in focus, as trade tensions with China weigh on stocks.

So far, the S&P 500 (^GSPC) has risen over 10% year-to-date, but Goldman Sachs analysts note “equity funds have seen net outflows of $35 billion so far this year.” Lydon suggests an alternative to the S&P 500, investors should look for “value-oriented ETFs that have underperformed in the last 10 years.”

The ETF Trends CEO is also focused on areas like consumer discretionary, health care, and utilities. “It keeps you in the game, but you’re not going to suffer as much volatility,” Lydon said.

McKenzie Stratigopoulos is a producer at Yahoo Finance. Follow her on Twitter: @McKenzieBeehler

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