ETF News: When a ‘Buy’ Could Be A ‘Sell’

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A few days ago, I read a short piece in the WSJ about the benefits of ETF investing. No news there; but the story went on to say that many investors who follow analysts’ “Buy” ratings could be in for a surprise.

While my preference is the use of momentum figures, regardless of what anyone else thinks or says, making your investment decisions strictly by following analysts “Buys” could have an opposite effect.

If an ETF, or any other security for that matter, has an excessive number of “Buy” ratings, it could very well mean that most of the buying has already been done and the upward momentum could reverse causing you to buy at the high.

Just be aware that when everyone screams “buy”, especially the analysts, the market top is close at hand.

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