Investors who are exposed heavily to risk and are choosing to ride out this storm might want to consider our plan. The strategy we follow if we’re in a fund is to exit either when it drops below its 200-day moving average or 8% off its recent high.
While you might lose some in this strategy, you will still manage to protect yourself on the downside and perhaps save a few dollars on Tums.
We cover our strategy in more detail in a trend-following plan story we wrote earlier this year.
This strategy is also covered at length in our book, iMoney: Profitable ETF Strategies for Every Investor.