When it comes to investing in exchange traded funds (ETFs), having a strategy can be the difference between having a winning year and a losing one.
Successful investing is hard work and takes a lot of time and discipline. Additionally, many investors have a normal range of profits and losses, and by staying in this range they don’t enable themselves to “win big,” states Jeff Saut of Minyanville.
Saut notes that emotional actions are failures, most of the time. What you need to do, especially in investing, is to remain totally objective. Easier said than done!
For this reason, we suggest using the trend following method, which will enable one to get in on any potential long-term uptrend without having to worry about staying in a certain profit/loss range. When the trend is over, you employ stop losses in order to protect yourself on the downside.
Another key component of having a strategy and checking out emotionally is to resist the urge to look back with regret. Not every trade is going to be a winner. Instead, learn from your mistakes while keeping your eyes fixed on the horizon.
For more information on how to utilize the trend following strategy, check out our new book on trend following.
For more stories on strategy, visit our strategy category.
Kevin Grewal contributed to this article.
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.