The ETF Trend Following Playbook: Profiting from Trends in Bull or Bear Markets with Exchange Traded Funds Book

Acknowledgments . . . xii

About the Author . . . xiv

Introduction: Buy—and—Hold: Rest in Peace . . . xv

Chapter 1 Trends Are an Investor’s Best Friend . . . 1

Buy-and-Hold’s Funeral March . . . 4

Getting in Touch with Your Emotions . . . 7

Never-Ending Opportunities . . . 9

Chapter 2 Risk and Disaster Don’t Have to Go Hand-in-Hand . . . 11

Greed and Fear and Stocks, Oh My! . . . 12

Running Scared . . . 13

What Kind of Risk Level Can You Tolerate? . . .14

Types of Risk . . . 16

Staying Grounded . . . 17

Is Time on Your Side? . . . 17

The Go-Getter (Aggressive) . . . 17

The In-Betweener (Somewhat Less Aggressive) . . . 18

The Almost There (Moderately Conservative) . . . 18

The I’m Outta Here (Conservative) . . . 18

Chapter 3 Spotting Trends . . . 23

Tools of the Trade . . . 23

Learning to Identify Trends . . . 24

The Rules of the Game . . . 25

Understanding the Moving Average . . . 26

Exiting Safely and Profitably . . . 27

Avoiding a Bursting Bubble . . . 29

Learning to Live with “the Sell” . . . 29

Finding the Trends . . . 30

Up, Down, and Flat as a Pancake . . . 31

Timing Is Everything . . . 35

Chapter 4 Why Trend Following Can’t Be Beat . . . 39

Never Look Back . . . 42

What Happens After You Sell? . . . 43

Conquer Volatility, Don’t Let It Conquer You . . . 44

Do You Have Any Better Ideas? . . . 44

Buy-and-Hold: Does It Work Like It Should? . . . 45

Where That Leaves Us . . . 46

Chapter 5 The Nuts and Bolts of ETFs . . . 49

Why ETFs Are a Better Solution . . . 50

A Fast-Growing Industry . . . 53

Evaluating ETFs . . . 54

Employing ETFs . . . 56

Chapter 6 Tools You Can Use . . . 61

News . . . 61

Analysis . . . 62

Looking Under the Hood . . . 63

Charting . . . 64

Chapter 7 Navigating U.S. Markets . . . 65

Choices Galore . . . 66

Dow Jones Industrial Average . . . 67

The S&P 500 . . . 69

Russell Mid-Cap Index . . . 70

The Russell 2000 . . . 70

Growth Versus Value . . . 72

Value: Slower but Steadier . . . 72

Trends in Value and Growth . . . 73

Domestic Market ETFs . . . 74

Digging in Even Deeper . . . 75

Chapter 8 International Opportunities . . . 77

The Land of the Rising Sun...and Profits . . . 79

The Beginning of the End . . . 80

Emerging Markets . . . 82

China’s Dragon . . . 84

Investing in Emerging Economies . . . 86

Another BRIC in the Wall . . . 87

International ETFs . . . 88

Developed Markets . . . 89

Emerging Markets . . . 90

Chapter 9 The Best-Looking Sector in the Room . . . 93

Technology: High Highs and Lower Lows . . . 95

The Bubble Springs a Leak . . . 96

Passing Around Blame . . . 98

One Big Financial Mess . . . 99

The Beginning of the Global Crisis . . . 100

Sector-Specific ETFs . . . 101

Power Up with Utility ETFs . . . 103

Checking Up on Healthcare ETFs . . . 104

Banking on Financials . . . 104

Chapter 10 The Luster of Gold and Crude . . . 107

Oil: A Slippery, Yet Profitable Slope . . . 110

Turning Trends into Profits . . . 113

Owning Your Share of Commodities . . . 114

Agriculture . . . 116

Energy . . . 117

Metals (Precious, Base, and Industrial) . . . 118

Broad-Based Commodity ETFs . . . 119

Going the Roundabout Way . . . 120

South Africa . . . 120

Chile . . . 121

Russia . . . 121

Australia . . . 121

Commodities: A Valuable Part of Your Portfolio . . . 122

Chapter 11 The World of Currencies . . . 123

Monitoring the Ups and Downs of Money . . . 123

A Rocky Road for the U.S. Dollar . . .124

Citizens Suffer . . . 124

The Dollar Bucks Its Trend–Will It Last? . . . 126

Making the Most Out of Currency ETFs . . .129

Squeezing the Most from Your Dollars . . . 131

Chapter 12 Trends in Fixed Income . . . 133

Factors to Consider . . . 137

The Yield Curve . . . 139

Recent Trends Spotted . . . 141

Taxes and Municipal Bond Trends . . . 142

High-Yield Opportunity . . . 144

Fixed-Income ETFs . . . 144

Who Wants Bonds? . . . 146

How to Choose Bond ETFs . . . 147

Chapter 13 Getting Leverage in the Markets . . . 149

The Long and Short of ETFs . . . 150

Pumping Up Returns . . . 154

Chapter 14 Conclusion: Let’s Get to Work . . . 159

Switching from Mutual Funds to ETFs . . . 161

Working with Your Advisor . . . 162

Wrap—Up . . . 164

Glossary . . . 165

References and Resources . . . 181

References . . . 181

Resources . . . 197

Books . . . 197

Services . . . 198

Index . . . 199