Current Affairs Highlight Why an ETF Sell Discipline Is Crucial
July 27th at 12:13pm by Tom Lydon
It’s no secret that the market and numerous exchange traded funds (ETFs) are meeting challenges lately. A market decline is never easy. Whenever a market correction occurs, it’s understandable to feel anxious about your portfolio’s performance. It leaves many investors feeling frustrated and helpless, wondering, "What do I do now?"
The best defense against a declining market is a strong sell discipline that is adhered to in good times and in bad. Our simple rules are to sell any ETF position that drops below its individual 200-day moving average or 8% off its most recent high. Having an objective investment strategy eases stress induced by poor market performance.
Most major indexes are still above their 200-day moving average, or trend line, for now. If it declines, it’s a sign the trends are changing, and we will follow them accordingly.
