ETF Strategies

 

 

1. DETERMINE RISK ,TRADING STYLE & PORTFOLIO VOLATILITY TOLERANCE LEVELS
Establish in advance your tolerance for portfolio risk and volatility. There several online quizzes to take to find out where you rank for your level of risk.

2. DETERMINE TACTICAL ASSET ALLOCATION
See asset allocation

3. CHOOSE AN ETF STRATEGY & EDUCATE YOURSELF

Guide – helpful rulestricks

4. CONSTRUCT A DIVERSIFIED PORTFOLIO
Following your Asset Allocation

5. MONITOR MONTHLY AND RE-BALANCE WHEN NECESSARY

 

Its not has hard or time consuming as some sites say to do on your own.

A simple strategy with lower risk and volatility would be to buy 3-5  ETF’s of the major indexes: QQQ  – SPY – DOW – MDY – IWM

There are numerous ways to trade an ETF. We use own variation with relative strength system. We usually trade a small and mid-cap ETF at the start of an uptrend, adding & rotating 1-3 ETF’s with a high ranking relative strength. We check on the ETF’s rank around once per month and re-balance if we think there is a need. We don’t like to make trades that much so we try to choose 3 -4 at the start of an uptrend and re-balance only if necessary. We wait for a pullback before we buy back in on any ETF. In September 2010 we started with small, mid caps and we liked energy. It was low in price although not ranked high in relative strength at the time we knew it would go up once the economy picked up. You can vary any strategy(s) to fit your trading and risk profile. ETF site

 

1) Relative Strength ETF’s:

2) ETF Sector Rotation: See Sector

 

3) Different ETF Strageties

Vanguard

Fixed Income

Dividend Funds

Overall

Currency

Resources

Strategies

Simple Strategy

Two Step

Major ETFs: perfchart. Key ETF’s indicate the overall trend for the stock market. The S&P 500 ETF (SPY), Dow Industrials SPDR (DIA), S&P MidCap 400 SPDR (MDY), Russell 2000 ETF (IWM) and Nasdaq 100 ETF (QQQ) cover the major areas of the stock market. With an odd number, there will almost always be a clear bullish or bearish bias with a simple majority. The bulls have the edge when 3 are bullish and the bears when 3 are bearish.

The strategy of rotating into the S&P 500 Consumer Staples and Health Care sectors from May through October, and returning to the S&P 500 from November through April, beat holding the S&P 500 all year long by 400 basis points per year since April 30, 1990. ^ Sam Stoval



A financial resource site for all of your retirement/investment decisions.