Comments on: An ETF Trend-Following Plan For All Seasons

By: dave_altware

dave_altware — Fri, 16 Oct 2009 13:13:48 +0000

Got it. Thanks Tom for your efforts here!

Dave

By: Tom Lydon

Tom Lydon — Fri, 16 Oct 2009 12:31:01 +0000

The recent high is based on the last high the ETF hit after you bought it (the trailing high). The time frame could be anywhere from a week to six months.

By: Tom Lydon

Tom Lydon — Fri, 16 Oct 2009 12:30:21 +0000

Yes – whipsaws are the risk you take. The 200-day moving average just gives an investor the opportunity to participate in any potential long-term uptrend, but there's no guarantee that the trend isn't over tomorrow. As for 8% off the recent high, it's based on the last high the ETF hit after you bought it (the trailing high). The time frame could be anywhere from a week to six months to longer.

By: dave_altware

dave_altware — Fri, 16 Oct 2009 00:22:09 +0000

How far back do you consider a recent high for the 8% rule? A week,month, quarter?

By: johnnycanucklehead

johnnycanucklehead — Thu, 15 Oct 2009 13:29:59 +0000

I understand that. I'm talking I buy an ETF today at $20 and it is above its 200-day moving avg.so I'm hopefully buying it on its way up. Yet the very next day it drops 8%. So it's worth $16 now.

So you'd just sell the ETF then at an 8% loss, the day after you bought it, no questions asked?

I get no time frame off a high but what is your time frame off a purchase that plummets 8% before you have even hit a high or gone into the black?

By: Tom Lydon

Tom Lydon — Thu, 15 Oct 2009 12:30:27 +0000

If a fund drops 8% from its recent high or drops below its 200-day moving average (whichever comes first), then yes, you sell it – no questions asked. The time frame could be a matter of days, weeks or months. It depends on when that point is reached.

By: johnnycanucklehead

johnnycanucklehead — Wed, 14 Oct 2009 17:13:05 +0000

Here's what I don't get at all. I buy any ETF. It immediately drops 8%. I should then sell?

Shouldn't you have a bit of a time frame on that score?

This is coming from someone who uses ETFs almost exclusively but sticks to seasonal investing and either taking profits in the spring or dumping the losers then. Then going into gold ETFs in the mid-summer. Works for me but I am intrigued by this 8% idea. Just give me more data to back this up as a mantra to follow.

By: rraju

rraju — Mon, 12 Oct 2009 19:02:24 +0000

excellent article

By: 401k_ira

401k_ira — Fri, 04 Sep 2009 06:28:57 +0000

This is cool! And so interested! Are u have more posts like this? Plese tell me, thanks

By: hcourtyoung

hcourtyoung — Mon, 31 Aug 2009 21:32:19 +0000

Thanks for your insightful comments. They underscore the discipline needed to invest in a reasonable manner. In these turbulent times, we all need to remember the points you make and heed them.

Thanks again.