ETF Trends
ETF Trends

The S&P has not had a 10% correction in many months. Yes, the
market is due. Yes, around here would be a perfect time for one to start as May through November is historically the worst time for the stock market. But, rather than guess, just follow the trends.

Stocks of all sizes and
styles are hitting recent highs.
Some are even closing in on six-year highs. It’s an
all-cap, all-style, broad market rally. And, this rally could continue right through the summer.

But what if it doesn’t? Here are three rules that should keep most ETF investors out of trouble:

  1. Maintain an 8% stop-loss on your ETFs.
  2. Keep an eye on the trend. If your ETF declines below its 50-day
    average, that’s not a good sign. If the same ETF declines below its
    200-day average, sell.
  3. Don’t chase markets that are too hot. The last time many world
    markets and industry groups collectively hit news highs was in 2000.
    You know what happened then. Keep your emotions in check.

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.