ETF Trading Strategies

Here's an article on basic ETF trading strategies from the Motley Fool. And it gives another answer to my question about how to park cash. :) So which strategy fits your investment personality?

ETF Strategies
ETFs offer an ever-increasing array of investing opportunities -- they can be optioned, shorted, hedged, and bundled. Still, most individual investors should stick to a few simple ETF strategies.
By James Early

Sick of hearing about the fun everyone else is having with Exchange-Traded Funds? Don't worry: Your invitation is in the mail.
ETFs are an extremely flexible investment vehicle: They can be optioned, shorted, hedged, bundled, and more. ETFs capture a variety of general stock market or economic trends without the risk of single-stock exposure, and they're designed for diversity -- peddled for less than what most like-minded traditional mutual funds charge.
ETFs may just be the wave of the future for most individual investors. But if you're investing for the long-term -- whether novice or near-expert -- the best ETF strategies are probably the simplest ones: filling asset allocation gaps and replacing higher-fee mutual funds.
If you want to get fancier than that, ETFs can likely accommodate more advanced investing tactics described below. But we recommend some of the following strategies only with great caution. As the Bard has said, "Here there be dragons."
Placing sector bets
Many investors -- and most of us here at The Motley Fool who proudly answer to that label -- like to make bets on individual stocks. Others prefer to follow the direction of entire sectors or geographic regions. If this is you, then consider ETFs. Some international ETFs give you exposure to stocks or entire industries that you cannot buy on the U.S. exchanges. And you needn't only make feel-good positive bets: ETFs can be sold short, even on a downtick. (Thanks to a regulation many feel is out-of-date, regular stocks cannot be shorted if the last trade price is lower than the next-to-last trade price.)
Betting on bonds
ETFs let you make bets on just about anything tracked by an index, and 007s are no exception. Options range from an ETF tracking the ultra-broad Lehman Aggregate Bond index to funds focusing on corporate-bond indices, inflation-protected Treasuries, or specific segments of the yield curve.
This yield curve business offers enticement to both guru and neophyte alike. A professional might use an ETF to exploit an anticipated movement in, say, the yields of 7- to 10-year Treasuries. An individual investor might combine bond ETFs of varying duration (there aren't too many yet) to give broad-based exposure similar in effect to bond laddering (a strategy based on maintaining a portfolio of individual bonds staggered across a wide range of maturities).
Parking cash
If you've got "permanent" cash in your portfolio, or at least cash that will be sitting around for a little while, you could garage it in short-duration bond ETFs instead of money market funds. These investments often pay double or triple money-market yields. However, don't blow your gains on brokerage fees. Although some money market funds make investors pay early withdrawal penalties, brokerage fees to sell your bond ETFs could run even higher. But if you're just looking for something less risky than stocks yet still fairly secure and are willing to commit for a while, you might appreciate their higher returns.
Avoiding the wash-sale rule
A common tax-reduction method is to sell money-losing stocks and use the losses to offset taxable gains from money-earning positions. (See our Tax Center for more investor tax issues.) One tax no-no, however, is called a "wash" sale, wherein you simply sell something that has lost money -- harvesting the loss to offset taxable gains you've got elsewhere -- and then buy it right back. "It" is defined as not only the exact security you just sold, but anything "substantially identical" as well. Fortunately, the plethora of ETFs has given investors options that may be similar in spirit, but not substantially identical, to the investments (typically other ETFs or mutual funds) they sold to harvest losses.
Pairs trading
Pairs trading is a hedge fund favorite and ETFs have made it easier. Say you believe a given stock will outperform its sector but aren't confident on the direction that that sector will go next. To capture that stock-vs.-sector performance differential (which will probably be small), you buy the stock and short its sector ETF. Or, if you think a company is much worse than its peers, you short it and go long the ETF. This is best attempted by those with an intimate knowledge of specific companies and industries. The meager returns of this strategy are tempered by the fact that it can be done in any market climate. And the strategy is far from bulletproof: Both the sector and the company could move in exact opposite directions of what you assume, compounding your loss.
Creating an ETF-only portfolio
If your goal is simply to have a mix of assets, ETFs let you do this simply and cheaply. Why sweat through finding a good tech company just because your broker says you need "more tech"? No need to trust anyone's stock picks either. Of course, you'll miss out on the stock-specific gains, but you'll also miss out on the stock-specific losses. For many investors, that's a worthwhile tradeoff.
A final caution
ETF strategies are plentiful, but so are the pitfalls. Most of the downside tends to be self-induced (e.g. excessive trading). But a more painful blow can be dealt by the misguided purchase of an ETF. Read on for ways to safely manage ETFs in your portfolio."

http://www.fool.com/etf/etf03.htm

Lady

I've found out the hard way in life that I've got to find and read the fine print! So I went looking for the fine print for ETFs and here is what I found. Not too scary! :)


The Pitfalls of ETFs
The good news is that there's not a lot of bad news about ETFs. The better news is that it's relatively simple to avoid the most common pitfalls.
By James Early

"Here's the good news about the bad news about ETFs: You are your own worst enemy. Aside from the obvious risk of the securities in your ETF dropping in value (which is beyond our scope of superpowers to stop), the remaining concerns can be washed away with a little discretion and trading temperance on your part.
It doesn't take much to avoid the tripwires, which basically amount to buying an ETF without understanding what it's based on and not watching your brokerage costs. Let's dish a little more detail.
Double coverage
If you're already getting shrimp cocktail for an appetizer, you're not going to order shrimp casserole as an entrée. Well, you might, if you were really in the mood, but halfway through the meal even the biggest seafood fan would probably cry, "Overkill!" The same thinking applies to ETFs, and mutual funds for that matter. If you're already holding a lot of technology stocks, for instance, a tech-oriented fund is probably a bit much for your portfolio's palette.
In addition to sector overkill, watch out for ETF morphing. An ETF based on a general-criteria index (like a growth index) is more apt to wander in its composition than one based on a sector-specific index (like biotech). Hypothetically, a nanotech boom might swell the ranks of growth indices with nanotech stocks. Sure, nanotech may be the place to be for growth investors and the additional exposure warranted. However, an inattentive (and potentially anti-nanotech) investor might not be aware of the large sector bet that just crept into his or her growth portfolio.
Non-ETF ETFs
The pro-ETF argument, as well as the pro-indexing argument, is predicated upon the automated nature of the investment. The logic goes that the absence of both fallible human judgment (apologies to the humans out there) and human salary requirements make indexing a performance- and cost-smart investment.
With all the buzz about low fees and index-tracking portfolios, you'd think that the term "ETF" would never pertain to anything involving active (read: human) management. Not quite. Beware of closed end mutual funds gallivanting as ETFs. Some purveyors of actively managed closed-end mutual funds -- that is, mutual funds that trade during the day like stocks -- have decided that because they offer funds that are exchange-traded, they not only have "exchange-traded funds," but also "Exchange-Traded Funds." Hence, they claim, by virtue of abbreviation they have "ETFs."
We won't get wrapped up in the semantics. But if "ETF" means the same to you as it does to most of the investment community (including the SEC), you should stick to referring to this would-be ETF crowd by its long-standing title: closed end mutual funds. Although many of these human-run wannabes have low fees and probably aren't bad investments, a key difference is that mutual funds only disclose their positions quarterly, whereas ETFs (at least the "real" ETFs that share a set of exemptions from the Investment Company Act of 1940) disclose their positions every 15 seconds via Specialists (exchange professionals who match up buyers and sellers).
Since large investors can buy ETFs and subsequently swap them for their underlying shares, this frequent disclosure keeps ETFs' prices closely tied to those of their underlying indices, adding a sort of additional stability not found in mutual funds. Furthermore, many closed-end mutual funds use leverage, which creates the potential for diminished (as well as enhanced, to be fair) returns and price volatility
But wait! There's more. If you'd like more complexity, you won't have to wait long. Also a possibility are actively managed funds that would be "real" ETFs. Such funds would track securities bought and sold by a human manager, but would still likely have some sort of disclosure requirement. But disclosure is a sticky affair: Portfolio managers, seeking to capitalize on the exclusivity of their research, want less of it; those concerned with shareholder rights and safety prefer more, partly to make sure that an ETF's share value doesn't diverge from those of the index it's supposed to track.
However, the same transparency that allows large investors to keep an ETF's price tied to its underlying securities would give skinflints a chance to piggyback off a manager's research by simply choosing to hold the same securities as the fund (although they'd pay a lot in transaction fees if they did this frequently). By matching up changes in recently disclosed positions with outstanding sell or buy orders, unsportsmanlike investors could jump in front of trades before they're fully executed. (For example, if a fund was in the beginning stages of dumping a large position, he or she could quickly short sell the stock with the assumption that the fund's heavy selling would likely drive down the price.)
In other words, since large orders can take time to fully execute, a spate of "nimble" little sell orders could theoretically "use up" the highest-paying demand for a stock. So a fund that starts selling at a moderately high price ends up unloading the bulk of its shares at a disappointingly low price. In trading parlance, its orders would have gotten "gamed."
So what's an investor to do? Actually, things aren't as bad as they look. For now, note that except for HOLDRs (which, though passively managed, are technically not index ETFs but are similar enough to be lumped with them), anything claiming to be an ETF without mentioning an underlying index deserves close scrutiny -- especially anything prefaced by the words "closed-end."
Fortunately, it only takes a quick look at an ETF's description (descriptions are available on the issuers' websites) to see what it's all about. Although this may sound like overkill, it's easy to do and, we think, a necessary step for all investors. The most important thing is to simply be aware of what you're buying (which can do wonders for other areas of your portfolio, too). That way you won't be caught holding a non-ETF ETF. Unless you want to, of course.
No investor wants to wake up with a stranger in his or her portfolio. But once you know exactly what you're buying, there's one more tripwire to avoid...
Trading costs
Sometimes it's the little things that count the most. In the case of ETF investing, it's brokerage commissions. Finding the perfect ETF for your portfolio and then paying an arm and a leg to a broker to buy shares is like being disqualified at the Olympic trials for a false start. (Thankfully, your brokerage bumble won't be broadcast to the entire world.)
Don't be distracted by the fact that their internal fees are lower than most mutual funds'. You still have to pay to trade them. While ETFs don't cost any more to buy and sell than regular stocks, frequent trading involving small amounts hurts. (The precise definition of "small" depends on your trading costs and holding periods, but some folks use $1,000 as a threshold.)
As an example, pretend you invest an initial $5,000, followed by monthly additions of $500, in both a mutual fund (charging a 1.6% management fee but no trading costs) and an ETF (with a .4% management fee and $15 per-transaction trading costs to your discount brokerage). For simplicity, we'll assume 10% returns for both funds and ignore the fact that the mutual fund will likely be less tax-efficient (although by an unknown amount). We're just isolating the transaction fees in this example. Because of those transaction fees, it would take 3.25 years before the ETF's lower internal fees put its overall account balance ahead of the mutual fund's. Switch to $250 monthly additions, and it takes almost six years. $100? More than 11.5 years. (Note that the higher the returns, the faster ETFs will overtake mutual funds.)
Because of transaction costs, ETFs don't work well for dollar-cost averaging and, also don't tend to be available through 401(k) plans. However, you can avert some of the fee bleed by using an ultra low-cost discount broker (though you will sacrifice some in service). If you're looking for a low-cost brokerage account, here are some shopping guidelines.
What to remember
Parting thoughts? In principle, ETFs aren't any more complicated than their underlying securities. If you know enough to buy those, then you know enough to buy ETFs. A little due diligence (finding out what's in that ETF) and some trading restraint (watch the brokerage costs) and you'll avoid the most common foibles. There's really nothing more to it than that."

http://www.fool.com/etf/etf04.htm

Lady

In my morning reading today, I stumbled on a trading strategy that will sound very familiar to members of TSPTalk. It sounds like "Last Month Best" strategy to me! Thought I would post it here in case anyone is interested.

• "Below are some log equity curves for a simple rotation system. The same five asset classes as in my paper [I followed a link to the abstract, and the asset classes from that paper are listed below. -Lady] back to 1973; ranked on the average of the trailing 3, 6, and 12 month total returns; rebalanced monthly; Top 1 is all-in the top asset class, Top 2 is all-in split 50/50 between the top two asset classes, Top 3 is all-in split between the top three asset classes, etc. Results are frictionless. Top1 would have done around +15% last year, Top 2 -9%, and Top 3 -24%. I think you could easily expand this to more asset classes but you would have to increase the number of holdings in line with the percentages above (i.e. Top 2 40% of the investable universe).
  
  Again, I think this just captures the alpha of momentum and increases your Sharpe to the .80 area. (Asset classes cluster around 0.20 and buy and hold around 0.40.) There are some tweaks and improvements but this is a nice example of parameter stability - and they beat buy and hold roughly 75% of the time (and have continued to work in recent years).
  
  http://static.seekingalpha.com/uploa...ter_thumb1.jpg
  http://static.seekingalpha.com/uploa...err_281_29.jpg
  "
  
  Pasted from <http://seekingalpha.com/article/119231-asset-class-rotation-a-simple-system>
  

The five funds that are mentioned in the strategy are:


the Standard and Poor's 500 Index (S&P 500), Morgan Stanley Capital International Developed Markets Index (MSCI EAFE), Goldman Sachs Commodity Index (GSCI), National Association of Real Estate Investment Trusts Index (NAREIT), and United States Government 10-Year Treasury Bonds.

Pasted from <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=962461>


I'll research what ETFs best represent the five funds listed in that 1973 abstract excerpt above and report back. :)

Lady

Thanks Lady good info!! :bigsmile:

Loved the name of this trading strategy!

Non-Conforming Portfolio Tactics For Uncharted Waters

By Thomas Smicklas on February 11, 2009

"As Margaret Thatcher stated during her reign, “Consensus is the abdication of leadership.” Throughout the civilized world, loosely defined as such, a curtain of fear has descended upon many aspects of our lives. Certainly, our lonely planet has faced much worse, but countless media headlines delivered in all formats and the grandstanding of politicians of all stripes have made the present era of instant communications exacerbate worldwide stress.
Thinking outside the box, investors with greenbacks to risk could amuse themselves with a few ETFs that could provide interesting gains through both contrary and deductive reasoning.
I had been toying with putting in place a simple Bizzaro World portfolio. Actually, I have already begun and have named it as such. This is in addition to my Permanent and Speculative Portfolios, both which have undergone a significant makeover since early autumn of 2007. Having an investment climate where almost nothing works, my largest portfolio adjustments since beginning stock and bond adventures around 1971 were both necessary and prudent. With multiple income streams from diverse sources and other asset shields in place, the Bizarro World Portfolio may actually have merit as a super-speculative vehicle. A Bizzaro Portfolio deserves a bizzaro rationale, as follows:

1. What inmates are running the asylum?
With the rest of the world appearing to be waiting for the United States to bail them out of the recession, Russia behaving badly towards Obama, European leaders bickering at every turn, Africa in chaos, South America being the usual lagging question mark, China being China and fires down under, it is observed at this time that the two most important leaders on mother earth at the moment are quasi-socialist Democratic politicians Nancy Pelosi and Harry Reid. They own Obama, based upon their hand-crafted legislation affectionately entitled a stimulus bill. I was going to add our Treasury Secretary as a player, but after Timothy’s unconvincing performance in front of the Senate Finance Committee, he does not rate.
So, let the printing presses role! My choice for honoring Ms. Pelosi and Mr. Reid are the iShares’ Inflation Protected Government Securities (TIP: 100.55 -0.41 -0.41%), ProShares’ Double UltraShort 20+ Year US Treasuries (TBT: 44.96 -1.34 -2.89%) and the SPDR International Government Inflation Protected Bond ETF (WIP: 45.4704 -0.0596 -0.13%).

2. Will a politician use fear to instill a mandate to legislate and stifle opposition? Will exaggeration occur?
If the answer is yes, my favorite during a route of the market is the ProShares UltraShort S&P 500 ETF (SSO: 22.2799 +0.2399 +1.09%). When the market tanks for the day (at least 3%), buy this ETF about five minutes before the market closes with a trailing stop 4% lower than your purchase price. Plan on selling it the following day during a significant pop. What we only have to fear is fear, itself. Using fear (or uncertainty) as a political weapon gyrates the markets during or shortly after the time of attack. SSO may be your short duration answer to a short duration political ploy.

3. Can corporate earnings be trusted? Can CEOs be trusted? Can anything in this market be trusted?
If not, forget common stock and head for bonds or preferred stock where you have at least a chance of earning a few bucks and perhaps a little capital appreciation. Although many investors have flocked to treasury bills and the like, I think corporates are a better Bizzaro Portfolio pick. IShares Investment Grade Corporate Bond ETF (LQD: 99.55 +0.6115 +0.62%), iShares Preferred Stock Index Fund ETF (PFF: 24.35 -0.07 -0.29%) if you believe financials may actually have value, and PowerShares High Yield Corporate Bond ETF (PHB: 16.03 +0.26 +1.65%) fit the bill.

4. During this well-promoted “worst recession since the Great Depression”, can anyone seriously be considering carbon credits, green EFFs, commodities and automobile companies? Are these luxury items as individuals fear for their jobs or worse?
There is a sucker born every minute. Even the Bizzaro Portfolio takes a pass on these, except for iShares Silver Trust ETF (SLV: 13.39 +0.41 +3.16%) or iShares Gold Trust (IAU: 92.61 +2.31 +2.56%). Infrastructure was on my list, but went away after reviewing the muddled mess of the draft stimulus bill.

Some, or maybe none of the above, will work over the long haul. We may see a whiff of deflation, but the money supply and steep index variations provide a reason for unusual portfolio choices. Mixing the above securities in a Bizzaro stew of sorts, adding your own seasonings and zest, may become a tasty treat on your investment menu."

http://www.dailymarkets.com/stocks/2...harted-waters/

Lady

Two articles I found today outlining yet another trading strategy, this one for the smaller investor. Here is today's article. It refers the reader back to an earlier article and I'll post that one next.

February 10, 2009
How to Invest With $5,000 to $10,000 - Revisited
by Dudley Baker


"http://safehaven.com/images/pixel.gifPerhaps you recall about one year ago we had a serious of articles, How to Invest....
We can all agree it has been one hell of a year so we thought it timely to revisit our previous article and see what new light we can shed on your investments decisions. Many of you have lost a substantial amount of monies over the last year, however we encourage you to look at the bright side in that now with the market for the junior's and smaller exploration companies down substantially, your investment dollars allow you to purchase more shares at the current depressed prices.
We feel your pain and frankly we have taken a bath ourselves on some of our positions, but we are confident in the coming months and next few years that all of us investing in the natural resources and commodity sectors will richly rewarded. This is the time to take a calculated risk with some of your investment dollars.
We realize not all investors have 'deep pockets' to invest and we suspect many investors are intrigued with the natural resource sector but all too often hear only of the large companies, i.e., Newmont Mining, Barrick Gold, and Agnico-Eagle. You might assume that it takes a lot of money to invest in this sector with the current share prices of these companies. Quite the contrary.
In our first article published in March 2008, How to Invest With $5,000 to $10,000, we cover the definitions for warrants, options and LEAPS and explore the use of all three as possibilities for investing. We will not repeat ourselves in this current article and encourage you to revisit our original article for some background information.
With the current market environment, many options, LEAPS and warrants are trading for pennies, yes just pennies, but of course we are partial to the long-term warrants with remaining lives of over 2, 3 and 4 years and longer. The opportunities with some of these long-term warrants on companies which we like are staggering and could easily, in our opinion, reap gains of 500% and more. True, not all of the companies with warrants trading as well as many other small exploration companies will survive.
Proper money management and allocation of your investment dollars is critical to your over all success. So let's explore a few ideas for you.
With $5,000 we would suggest you allocate this to four different investments. While this may not seem like much to many of you, remember, we are striving for gains of 500% and more. So many of juniors and warrants are at give-a-way prices and offer us these unusual opportunities. Current prices of $0.10 or $0.20 allows you to buy 5,000 to 10,000 shares or warrants, if not more for each of the four positions.
If you have $10,000 to invest we would suggest you allocate this amount to 5 different investments. Remember, we realize that one or two of these 'might not' work out so we must diversify even with this relatively small amount of money.
You say you do not have any monies to invest. I challenge you to review your portfolio and perhaps make some difficult choices. Frankly, we disagree with some of the analysts recommending selling positions which are trading only for pennies. A hold would be a wiser decision we believe as many of these companies will come back allowing investors to recover their investments. Yes, you may raise some monies by selling but the amount after commissions may not be worth the effort. We suggest that all investors periodically review their holdings and make some decisions. Remember, we are looking for 500% gain and if you feel your current holdings do not offer this potential return, perhaps you should sell the position and move-on to more promising investments.
We'd like to rap this up by showing you a chart of the TSX Venture relative to gold which gives us a good picture of just how bad the juniors and explorations companies have performed in the last year. It looks to us like it is time for the juniors to start out performing gold.
http://safehaven.com/images/baker/12568.png



http://safehaven.com/article-12568.htm

Lady

And now here is the earlier article that the previous post refers to. It contains the original list of suggested investments for the precious metals and natural resource sector. It also refers to purchasing warrants, which is yet another term with which I am unfamiliar. :rolleyes: Anyone else know of or use them?

How to ‘Invest’ with $5,000 to $10,000

"There are many ways to invest in the precious metals and natural resource sector. Many analysts would first suggest investors purchase gold and silver bullion or coins, then focus on some of the larger capitalized mining companies (most of which are selling for over $35 per share). You might consider the GLD or the SLV, the Exchange Traded Funds for gold and silver currently selling for $96 and $197, respectively. Not all investors have the financial resources necessary to purchase these alternatives.
So we ask, what about the individual with only $5,000 to $10,000 available to invest? Are they to be left out of this bull market? With limited investment funds, the above ideas are of little value due to the cost of each and the difficulty of diversifying your choices.
For individuals with limited resources, not only can we suggest some different vehicles for you to purchase, but how you can diversify with positions in several different companies.
Let’s explore the use of options, leaps and warrants allowing you to limit your investment exposure but still having the incredible power of leverage working for you. By selecting the right companies, options, leaps and warrants will provide you with the potential of increasing your $5,000 to $10,000 many times over.
Many call options, leaps and warrants are selling for pennies allowing your $5,000 to $10,000 to be spread/diversified over several different companies. Frankly, I would suggest purchasing call options, leaps or warrants on 4 or 5 different companies. You could pick a junior gold company, a silver company, a uranium company or an oil & gas company, thus diversifying your holdings and giving yourself more chances of being correct.
If you are unfamiliar with options, leaps and warrants, here is a brief overview:
Options and leaps trade on the Chicago Board Option Exchange (CBOE). They are a contract giving you, the investor, the right, but not the obligation, to purchase the underlying security at a specific price and expiring on a specific date in the future. Call options may have a life of 30 days to 1 year, while leaps may have a life of up to 2 years. Your loss is limited to your investment for these contracts and no margin is used. The potential gains are great, if you are correct in your timing and company selection.
Warrants are slightly different in that warrants trade like a stock and are issued by a company usually in an initial public offering or in a financing arrangement. Many sophisticated investors are not aware that there are many warrants trading. While it is very common for warrants to be issued in private placements, particularly in the mining sector, these warrants do not trade and thus cannot be purchased. What is of particular interest, is there are numerous warrants trading which have a remaining life of 3 years or more.
Think about the possibility of a long-term warrant on one of your favorite resource companies with several years of time remaining. We consider long-term warrants to be an investment not speculation.
Warrants will provide you with the opportunity to participate in this bull market with time on your side, a much lower cost than purchasing the common shares and the power of leverage working for you. As with options and leaps, your potential loss with warrants is limited to your cost and there is no margin.
In summary, investors with limited resources to invest can have a stake in this bull market and the opportunity for incredible gains by considering the use of options, leaps and warrants. Actually, I have recently purchased some call options on a large silver company which did not have warrants trading. I am investor first and seek out the best opportunities whether that is acquiring the common shares, options, leaps or warrants."

http://www.preciousmetalswarrants.co...00to10000.html

Lady

Here is another "Last Month Best" fund strategy, and it lists the specific funds. I love the name! Decision Moose! Have you heard of it before?

http://www.decisionmoose.com/Demoostify.html

"Decision Moose is an automated framework for making intermediate-term investment decisions. Several versions (models) are run weekly applying the same, or a slightly modified, technical analysis framework to various asset groupings. Essentially the framework is based on three established Wall Street adages:

Don't fight the Fed
Don't fight the Market
Don't fight the Tape

Index Moose, the version presented on this site, evaluates nine index funds to determine which broad asset class currently provides the greatest opportunity for gain. The model's underlying assumption is that global finance is a closed system, and that investment capital, when it leaves one class of assets, has to go somewhere else. Index Moose attempts to track that flow using the following funds:

Cash or Money Market Fund (3 month Treasury)
Long-term zero-coupon Treasury bonds (BTTRX)
Large cap US stocks (SPY)
Small cap US stocks (IWM)
Gold Bullion (GLD)
Europe 350 stocks (IEV)
Latin America 40 stocks (ILF)
Japan stocks (EWJ)
Asia ex-Japan stocks (EPP)

When the model gives a signal, 100% of the portfolio is immediately switched from the previous position to the new one. (On average, three or four switches per year can be expected.) Since the model is intended to provide significant capital gains, it may be best, but not exclusively, employed in tax-deferred accounts (IRA's, SEP's, etc.)"

There are copyright violations if I post the information more than this one time to let you know about the site, so I won't be doing updates. But the site produces updates once a week and the current signal is for gold (naturally) and can be found at the subsite http://www.decisionmoose.com/Moosignal.html


Enjoy!

Lady

Never heard of it. Moosignal.html ... :D

Hey, I had time today to step back a step and consider portfolio strategies that are out there, stumbled across reference to DecisionMoose-had forgotten all about that one. I kinda like it for small account 5-10K. My brokerage account still sits at just over 5K and the Roth is only just now bumping north of 10K.. up til now I've been doing individual stock picking and ETF picking-I'm trying to keep trading costs way way down, trying not to be a big trader, more a buy and holder until account gets bigger so don't eat small accounts up with trading costs.

not doing bad, but also kinda seat of the pants on strategy. I like the DM strategy-only about 4 trades/year-that would equal $80 in commissions= less than 1% on trading costs with my Roth account, 1.6% in my taxable brokerage account.

think I'll try the DM strategy in the Roth account for a year, see if it consistently produces the 8%. If I sell my holdings now, I'm probably looking at 20% gain on the items I've bought in the past year, do I want to sit content with consistent 8%? I don't know. maybe.

I tend to keep too much in cash while I pick the next pick and watch how the last picks are doing. haven't held a full position in anything yet-just now getting my faith in selections to point of consistently buying 1/2 positions.

I also spotted another portfolio strategy the other day that had consistent 10% returns. think I saw it on Seeking Alpha. If can find it again, will post here-may go for it over DM after I look at it harder.

So I've been revisiting DecisionMoose, trying to decide if wanted to move one of my accounts into that system. It's been holding on IWM 100% since November, no new signals. I like it that it it only has signal changes 3-4 times a year-really cuts down on trading commissions in small account.

But then I found a new site the other day-has multiple weekly, monthly, timing AND TSP signals and strategies! http://www.timing-signals.com/ I've been studying hard this weekend, when taking a break from finishing taxes.

I'm going to move my Roth account into their Weekly ETF14 strategy. Buy signal for EWO for tomorrow. 50% of my account. That gives me time to move out of the other ~50% of my account during the coming week. That way I'll have cash to buy the next signal next Monday when I sell the EWO.

That strategy is pretty focused on single countries and energy-helps with currency and interest-rate inflation issues. Since I'm already focused on single countries and energy and inflation issues-it seems a good fit. I can handle getting a signal on the weekend for buying at the close on Mondays.

In the much smaller taxable account, I'm going to sell the DBC to raise 50% cash for next week and also buy EWO for this week with the other 50%. My plan there is to follow the ETF14 strategy until the DecisionMoose signal changes again-and then start following the DecisionMoose signals with 50% of account from then on-harvest any gains and put them into the cash account periodically to rebuild cash to 50% waiting for the next MooseSignal. Moose will give me fewer commission costs with that strategy than the ETF14 strategy.

At some point I'll have enough in the taxable account to rotate using Sentiment Survey with 50% of the account. And at some point I'll start playing with single stocks again probably in Scotttrade, another Roth account.

I think I finally have a good systematic plan for all the accounts I can explain to someone else instead of it all just being a mishmask of individual ideas and general sector rotation/inflation/currency devaluation themes in my head. OK, back to taxes. ugh.