Time sure flies by in a blink of an eye. It almost seems like yesterday when the markets hit their lows, and it has us feeling reflective. This has been one good rally, but are you buying it?
Two years after the March 9, 2009, low, the Dow is now up around 86%, reports Jeremy Hobson for MarketPlace. Economist Gary Schilling attributes the recovery to monetary and fiscal stimulus, plus a rebound in the domestic and international financial sectors. [Investors Are Coming Back; ETFs Can Help.]
Two years ago, investors were bailing out of the markets. Only recently have they gotten more confident. [The Secret to ETF Success.]
Investors have poured $24.2 billion back into U.S. stock mutual funds since the beginning of 2011; however, it is still shy of the $96.7 billion withdrawn in 2010, writes Dave Carpenter for Yahoo! Finance.
The economy is not “there” yet. We’ve still got a long way to go before we can be considered fully recovered. But that doesn’t mean you should still be sitting on the sidelines, waiting for a sign.
If you sat out the market’s rebound from those lows, you’ve missed a lot. The good news is that we’re still off highs in plenty of areas, and there’s room to take your positions. It can be emotional coming back to the markets after getting burned.
Using a simple strategy will help you find spots that are moving while giving you some downside protection, which can also give you the confidence to try. We prefer to keep it simple with trend following: when a position is above the 200-day moving average, it’s a buy signal; when it’s below, it’s a sell. You can read more about implementing a trend following strategy. [ETF Trend Following Plan.]
It’s been a good two years. Here’s to many more.
For more information on trend following, visit our trend following category.
Max Chen contributed to this article.