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Short-term ETF Trades
Open trades are highlighted in red.
Stop prices and Compounded Annual Growth Rates in the tables that follow are updated through December 31, 2014.
Welcome! I hope you find the following the ETF and stock picks educational.
The methodology is surprisingly simple: I start with a defined universe of equities. Next, I rank the securities by their Alpha, a term that means different things to different investors and traders. Just like the phrase “green lawn” means different things to different people, so too with Alpha. The definition I use is Alpha = Excess Return – ((Beta x (Benchmark – Treasury)).
Next, the security with the highest Alpha rises to the top of its respective list. I hold the security for a predetermined minimum time period unless it gets stopped out. After the time period elapses, I compare the security’s Alpha rank with all the other securities in the defined universe. As long as the selected security’s Alpha remains high enough, I continue holding it. If Alpha falters or the security gets stopped out, it is replaced with whatever security that day has the highest Alpha, and the cycle continues.
You can check the here daily or less often, as you choose.
The “purchase price” listed in the table is the closing price of the entry day. “Sales” use the closing price of the exit day. Compounded Annual Growth Rate (CAGR) is for the strategy, not the individual ETF or stock. Gains and losses do not take into account transaction charges, if any. CAGR is calculated from 1/1/2005 through the present date and does not take into account commissions or slippage.
Except as otherwise noted all stop prices are compared to Friday’s close only, i.e., a weekly stop check. If the close is below the stop price, the ETF or stock is sold the following Monday. So for example, if the stop price is $20.50 and Wednesday the ETF dropped and closed at $20.10, the ETF is not sold on Thursday. If Thursday’s close is $19.90, the ETF is not sold Friday. If on Friday the ETF rallied and closed at $20.65, it would be held for another week. But if it closed Friday at $19.75, the ETF would be sold the following Monday at the close.
This stop methodology may result in exits well below the stop price. On the other hand there are many times where the ETF or stock recovers later in the week. Please keep this in mind when you are reviewing the picks. You can make the stops hard stops that get executed intraday but then your returns will differ from mine. Or as they say in the auto biz, “YMMV” (Your Mileage May Vary).
KNOW WHEN TO HOLD ‘EM, KNOW WHEN TO FOLD ‘EM
If you like what you see and would like to trade the stocks or ETFs, you can buy and sell them through your brokerage account or at Fidelity Mutual Funds. Some brokers offer commission-free ETF trades. If you prefer working with a financial advisor so you don’t have to worry about missing a changed sell stop or a new buy or sell idea, there is a Registered Investment Advisor firm I know of that’s investing client money using my ideas. Global Investment Solutions (http://globalinvestsolutions.com/) is located in Newport Beach, CA, a little south of Los Angeles, and has been in business for over 20 years. The easiest way to contact them is at 949-433-7290.
New selections are highlighted in red.
** Stop compares the close on a daily basis to the stop price.
The Subscribers Only! page of ETFRoundup.com is published/updated approximately 40 times per year. Some updates are just sell stop or trailing stop price updates while other updates include buy and sell changes in the model portfolio.
TXMONY LLC (“TXMONY”) does not purport to tell or suggest which securities readers of this blog should buy or sell for themselves. TXMONY may hold positions in the stocks or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities. TXMONY assumes no responsibility or liability of any kind for the use of the information contained herein. Factual statements on this blog are made as of the date stated and are subject to change without notice. The opinions, views and/or comments shared on this forum by participants are not endorsed by TXMONY, and TXMONY assumes no responsibility or liability for any trading and/or investment results that you may obtain by using such information.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Dave are not indicative of future returns by that trader or system, and are not indicative of future returns which may be realized by you. In addition, the indicators, strategies, columns, articles and all other features from other companies linked to this blog (collectively, the “Information”) are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on this blog are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and/or tax advisor to determine the suitability of any investment.
This communication is for information purposes only and should not be regarded as an offer to sell or as a solicitation of an offer to buy any financial product, or an official confirmation of any transaction. Inclusion of information about managed accounts, program positions and other information is not intended as any type of recommendation, nor solicitation.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.