Chetan Woodun
Summary
- The Vanguard S&P 500 ETF fell due to inflation fears related to tariffs but has a potential upside as the effects of demand destruction may be underestimated.
- This is supported by applying Consumer psychology to the tariff situation, suggesting that discretionary spending, which is also more price sensitive, will decline.
- In this case, higher import taxes could have less drag on earnings, potentially benefiting VOO's holdings and potentially raising the ETF's P/E ratio.
- It is also important to exercise moderation due to uncertainty.
- Despite tariff risks and economic uncertainty, VOO's diversification and strong large-cap companies provide downside protection, supporting a bullish outlook.
The Vanguard S&P 500 ETF (NYSEARCA:VOO) is a popular exchange-traded fund that fell from around $518 to $456 in just three days in the first week of April, as shown below. This was because of fears of an inflation
Chetan Woodun
As a tech-focused industry Research Analyst, I aim to provide differentiated insights, whether it is for investing, trading, or informational reasons. For this purpose, I am not a classical equity researcher from the financial sector, but, I come from the IT world as the Director of Keylogin InfoTech and my insights are based on my own experience investing for 25 years.Also, my research is often backed by analytics and I make frequent use of charts to support my position.Based on losses during the GFC, I am often moderate and focus more on the direction and look for strategies to preserve capital. As per my career history below, I have wide experience, initially as an implementer in virtualization and cloud, and I was subsequently a team leader and project lead, mostly working in telcos.I like to write around themes like automated supply chains, Generative AI, telcos Capex, the deflationary nature of software, semiconductors, etc. and I am often contrarian. I also cover biotechs with more of a "techbio" focus.I have also been an entrepreneur in real estate ( a mediocre one), a business owner, and a farmer, and dedicate at least 5 hours per week to working on a non-profit basis. For this purpose, I help needy families by providing sponsored work and contributing peer reviews and opinions for enterprise tech.My investment journey started in mutual and indexed funds before later opting for individual stocks. Got a lot of experience in the 2008/2009 crash when I lost a lot due mostly to wrong advice. Since then I have done my research and have fallen in love with Seeking Alpha because of the unique perspectives it provides to someone investing hard-earned money as well as access to some of the best analysts.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
This is an investment thesis and is intended for informational purposes. Investors are kindly requested to do additional research before investing. The consumer psychology part has benefited from input from Bhoshan Woodun.
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