Buy - DON'T Hold: Investing with ETFs Using Relative Strength to Increase Returns with Less Risk

Buy--Don't Hold: Investing with ETFs Using Relative Strength to Increase Returns with Less Risk - Front Cover
Short Title
Title Page
Printer's Imprint
Dedication
Contents
Foreword
Acknowledgments
About the Author
Introduction
My Early Beginnings in the Stock Market
My Investment Experience Spans Over 50 Years
The Purpose of This Book
Why I Wrote This Book Now
Managing Your Financial Affairs Is Critical
Benefits of Managing Your Own Investments
1. The Stock Market Roller Coaster
Secular Bull and Bear Markets
Latest Bear Market
Bear Markets Have a Long Recovery Time
Historical Market Returns Are Not a Forecast of Future Returns
Forget About Relying on Investment Books with Outrageous Titles
Stock Market Facts
Arguments For and Against Buy-and-Hold (BAH)
Ten Arguments for BAH
Seven Arguments Against BAH
Mutual Fund Managers Do Not Practice Buy-and-Hold
Wall Street's Objective Is to Keep Your Money Under Management
In the Stock Market Expect the Unexpected
Three Reasons for Corrections, Crashes, and Bear Markets
Market Crashes Are Devastating
Time to Break Even After Bear Market Debacle
Secular Bear Markets Are Not That Rare
Investing in the Stock Market Is a Very Risky Proposition
Preservation of Capital Is Paramount
Endnotes
2. Understanding the Concept of Risk
Risk Tolerance Questionnaires Have Major Shortcomings
Typical Risk Tolerance Questions
New Risk Tolerance Questionnaires
FinaMetrica Questionnaires
Recent Market Decline Has Brought Risk to the Forefront
Market and Individual Stock Risk
Diversification Risk
Inflation Risk
Protecting Your Principal Is Paramount
Use Stop Orders to Protect Profits and Minimize Losses
Final Point
Endnotes
3. Personal Investing Plan: Six-Step Road Map to Success
Step 1: Determine Your Current Risk Level
Step 2: Review Your Existing Investment Portfolios
Step 3: Assess the Stock Market's Condition
Step 4: Invest in a Selected Universe of ETFs
Step 5: Select Top-Ranked ETFs Based on Relative Strength Analysis
Step 6: Protect Your Portfolio Using Stops
Investing for Retirement
The Bear Market Impact Is Devastating
Retirement Accounts Offer Tax Advantages and Compounding of Principal
Investment Choices Vary by Plan
No Capital Losses Are Available in Retirement Accounts
Retirement Investing Using Our Action Plan
Endnotes
4. Exchange-Traded Funds--The Most Suitable Investment Vehicles
Investing in Actively Managed Mutual Funds Is Not Recommended
Majority of Active Fund Managers Have a Poor Track Record
Index Funds Have Garnered Most of New Equity Mutual Fund Money
ETFs Are the Preferred Investment Vehicle
Comparison of ETFs to Mutual Funds
Exchange-Traded Fund (ETF) Basics
ETF Benefits Are Extensive
ETF Risks
Leveraged ETFs Are Very Risky and Dangerous in the Wrong Hands
ETF Allocation for Different Investor Types
Recommended ETFs
Appendix 4.1: Discount and Full-Service Brokerage Firms
Appendix 4.2: ETF Resources
Recommended ETF Books
ETF Web Sites
Endnotes
5. The Stock Market Dashboard--Key Stock Market Indicators to Gauge the Market's Direction
Pay No Attention to Wall Street Experts
Introducing the Stock Market Dashboard
Three Market Entry Strategies to Consider
Sell All Equity Positions on a Dashboard Sell Signal
Investing in Fixed Income ETFs Using the Dashboard
Dashboard Indicators
1. Percentage of New York Stock Exchange (NYSE) Stocks Above Their 50-Day Moving Average (50-dma)
2. NASDAQ Composite Stock Index Crosses Its 100-dma
3. NYSE Daily New Highs Minus Daily New Lows
4. NYSE Bullish Percentage (NYSEBP) Index on a Point-and-Figure Chart
5. NASDAQ Composite Index with MACD (Moving Average Convergence-Divergence) Indicator
6. AAII Weekly Investor Sentiment Survey Bullish Percentage
7. Best-Six-Months Strategy with the MACD Indicator
8. NASDAQ Summation Index (NASI) Moving Average Crossover with MACD Indicator Confirmation
Indicator Scoring System
Number of Yearly Buy and Sell Signals
Dashboard Score Card
Dashboard Indicator Data Gathering
General Comment on Placing Market Index on Indicator Chart
Table 5.3 Quick Summary of Obtaining Indicators from Stochcharts.com
Sample Dashboard Report
Endnotes
6. Using Relative Strength Analysis to Determine Where to Invest
The Basic Premise of Relative Strength Analysis
Relative Price Strength Test in 1969 and 1970
Relative Strength Studies by Colby, O'Shaughnessy, and Kirkpatrick
Relative Strength Investing with ETFs--A Great Combination
Always Check the ETF's Chart Before Purchase
A Limited ETF Investing Universe
ETF Selection Strategy #1 Category
ETF Selection Strategy #2 Entire Universe
When to Sell ETFs That Fall in the Ranking
Using www.etfscreen.com to Rank ETFs
Basic Information Provided
Web Site Style and Market Segment Views
Morningstar Style Box
SPDRs Select Sectors
Back-Test of SPDR Relative Strength
Intemational--Country ETFs
Fixed Income ETFs
Composite Rankings on Our Customized ETF List and Comparison Chart
Using www.etftable.com to Rank ETFs
SPDRs Select Sectors Example
Composite Rankings on a Customized ETF List
Other ETF Web Sites with Performance Data
Appendix 6.1: Alphabetical Listing of ETF Symbols for Composite Performance and Ranking Tables
Endnotes
7. Subscription Software for Ranking the ETF Universe
High Growth Stock Investor Software (HGSI)
HGSI Capabilities
ETF Coverage
Edit Filter
ETF Relative Strength Ranking
ETF 26-Week Price Performance
ETF Weighted Combination Ranking
Charting Example and Indicators
VectorVest Software
Market Timing Indicator
ETF Composite Price Performance Over 26 Weeks
Endnotes
8. Putting It All Together
Step 1: Determine Your Risk Tolerance and Investor Profile
Step 2: Examine Existing Portfolios for Possible Reallocation
Step 3: Evaluate the Stock Market's Condition
Interpreting Dashboard Signals
Three Approaches to Buying ETF Positions on a Consensus Buy Signal
Sell All Positions on a Dashboard Sell Signal
Working Through Dashboard Signals Near the March 9, 2009, Market Low
Step 4: Invest in the Recommended Universe of ETFs
Step 5: Select Top-Ranked ETFs Based on Relative Strength Analysis
When to Sell ETFs That Fall in the Ranking
Step 6: Protect Your Portfolio Using Stops
Refrain from Refining Your Investing Plan
Four Interesting Insights to Ponder
A Last Word
Appendix 8.1: October 2007 Dashboard Scores
In Summary
Endnotes
Bibliography
Index
FT Press
Rear Cover