What You Need to Know About ETF’s

Since Jeff is traveling, I’m providing the weekly ETF update.


Over the last several weeks we have tried to highlight some important aspects of ETF trading.  Each week has emphasized a different principle.  Taken together, the points below are a handy guide for ETF trading.  Each point has a link providing more detail.

  • Anyone putting money at risk in financial markets needs a system.
  • Whatever your system, you need to test it before you use it.
  • Why technical analysis is useful for ETF trading.
  • Those following a disciplined investment method and avoiding common traps are more likely to capture important market moves.
  • If you are confident in your method, you can ride out market adversity.
  • Buying a commodity ETF provides diversification without requiring expertise in specific stocks.
  • While the fundamentals of foreign stocks can be difficult to analyze, an ETF trading method can offer participation in multi-national markets.
  • Exit rules are different when dealing with an ETF because it is viewed as a portfolio, rather than a group of individual trades.
  • Choose position size based upon what you can afford to risk, not what you want to gain.
  • Focusing on sectors contributes to overall market feel.

ETF Sector Update

We have been using our own system to illustrate the various ideas.  This week was interesting, with a number of position changes.  Jeff will comment more upon his return.




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  • ron dunn November 16, 2007  

    how do you determine what is considered a buy? You say 7/44 ETF’s a buy. Or a sell?

  • Bill aka NO DooDahs! November 16, 2007  

    Try following the links in the article. They don’t disclose the exact method, but they talk about in sufficient detail to understand approximately what is being done.

  • muckdog November 16, 2007  

    Yah, the nice thing about ETFs is diversification in the sector one thinks is going to outperform. Hopefully, that smooths out the lumps and bumps from individual blow-ups. Good linkages to past columns, here. Dr. Jeff does a good job!
    Renae, any thoughts on the Dolphins plus the points on the road this week in Philly? Rush Limbaugh said that’s his lock this week, and maybe take Miami on the money line to win outright! HUH?!?!?

  • Ryan Gister November 16, 2007  

    Tell Mr. Limbaugh to put his money where his mouth is and take the other side. Then take Miami plus the points.

  • muckdog November 17, 2007  

    I dunno, Ryan. John Beck’s first start and it’s on the road!