Buy and hold works well, in hind sight.  Based on three year annual returns, the top ETFs are iShares MSCI Brazil (EWZ) up 73%, iShares S&P Latin America 40 Index (ILF) at 60% and iShares MSCI Austria (EWO) with 53%.  Along the way each of these had corrections of 10-20%.  Most investors can’t stomach giving back this much of their serious money.

As we mentioned in the Wall Street Journal, using a 200-day moving average and an 8% stop-loss to decide when to sell an ETF can keep you out of trouble.  If an ETF moves below the 200-day moving average then it is time to sell and an 8% stop-loss allows a comfortable amount of giveback.  A shorter term stop-loss, such as 5%, could be too low since markets often have a 3-5% correction before they move on and hit new highs.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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