Professional Investment Strategies ETF Trends


Don’t ask me how I stumbled upon the ETF Trends website but I did.  But then I happened to stumble upon Tom Lydon’s Global Trends Investments and I have to say that after reading the main page it was refreshing to see his strategy clearly spelled out right from the get-go without any having to dig through tons of prospectus material or other fine print.

It seems like almost every professional fund management site I have been to is not too clear on exactly how they plan to manage your money or what their specific strategy is.  Perhaps they are but it takes a while to find out the real details.  That has been my experience anyway, maybe you have a different one.  But anyway I am going to call Tom Lydon ‘The ETF Guy’ because his site ETFTrends focuses on only one thing, ETFs.

Here is the quote from the main page of Global Trends:

At Global Trends Investments, we follow an investment discipline using the 200-day moving average and exchange traded funds.  When the markets are above the trend line, we are invested, and when they are below, we are in cash.  If there are no areas trending in the right direction, we exit equities completely and sit on the sidelines until the market trends turn.  We also have an 8% stop-loss, so when holdings are 8% off their high, the position is sold.  This exit strategy helps protect you from losing all of the gains made.

What a nice clear statement of strategy.  I like that.  I like it even more because there are technical criteria that make up the fund management strategy.

I think I would like to focus in more on ETFs.  They really can be an outstanding vehicle for achieving returns and maintaining diversity.  As far as trading, they are good for that too if you have the ability time them and filter them for the best setups.  To be sure, the leveraged ETFs require a lot of clear focus and attention, especially the triple leveraged ETFs.

There are just SO MANY thousands of choices in the market today that it is mind boggling.  So many stocks across so many exchanges, and of course mutual funds that pick stocks.  But there is a lot to be said for having a highly focused strategy whose main component is just ETF’s. 

Is the 200 day moving average strategy as a long term strategy a good one?  I don’t know the answer to that.  But I think what I might do (I should have done this a long time ago anyway) is import all current ETF’s into my chart software and see if I can do some backtests and filters to make some sense of the entire sector all at once.  Maybe I will try some moving average filters to because I am curious how that would look over time.

A lot of ETFS are still rather new so it may be tough to get good moving average data on some of them, but nevertheless it will be interesting to see what I can find.

Oh by the way, ETFTrends has a nice comprehensive list of all etfs right here.

Posted in ETFS, Trading News

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