Comments on: What ETF Investors Have On Their Minds

By: Tom Lydon

Tom Lydon — Mon, 10 Aug 2009 13:25:05 +0000

Hi Alan,

1. Give yourself a 5% cushion in that instance.
2. That was a strategy we outlined when the markets started to show a little recovery and positions were 20-30% below their 200-day moving averages. Investors who waited until that point would have missed out on a big part of any rally. Now that things have normalized some, we're back to the 200-day moving average.
3. The 10-month can be good if you'd like a longer moving average, but we still prefer the 200-day, since it's neither too long nor too short a period.

By: stott2

stott2 — Sat, 08 Aug 2009 13:38:47 +0000

1. I am unclear on a couple of aspects of the buying and selling with the 200 MA. What if it switches back and forth around the 200 MA? Let's say it barely goes above the 200 MA and I buy. The next day it only drops 1-2% but is now below the 200 MA. Do I sell? And vice-versa. One day it barely goes below the 200 MA and I sell. If the next day it barely goes above the 200 MA, do I buy? In a sideways moving market this could happen quite often and could make us get in and out of the ETFs alot.
2. Is the 200 MA the only one we will follow? You mentioned in 1 article that if the line goes below the 50 MA to be aware but only sell if it goes below the 200 MA. So you don't look at these 2 MAs together? Do you look for them to cross?
3. Another commentator suggested following the 10 month simple moving average. Any thoughts?
Thanks.
Alan

By: Bill Hungate

Bill Hungate — Wed, 19 Nov 2008 23:02:56 +0000

Tom, what about the short ETF’s in a Bear market such as this? Is there any reason we shouldn’t move some money into those ETF’s? Do your buy and exit guidelines apply to them? Are they different in any significant way from “normal” ETFs?

Thank you,

Bill Hungate

By: Tom Lydon

Tom Lydon — Mon, 20 Oct 2008 18:06:25 +0000

Yes, the yields are higher, but please understand the value of the bonds can decline if the ratings on the bonds are down-graded or if the current credit situation gets worse.

By: TLy

TLy — Sat, 18 Oct 2008 23:57:57 +0000

What if I am an income investor? These ETFs are down so much now that the yields on them are in double digit range. Would it be wise to buy and hold now to get the benefits of higher yields?

Thank you.