Not withstanding yesterday’s rebound, this year has been a tough one for all major indexes. Even many country and sector funds have seen their long-term trends interrupted if not ended.
Here are some interesting stats for the various investment orientations I track in my data base. As of 12/31/07, there were considerably more no load funds/ETFs showing strong momentum figures as compared to yesterday, only 9 days into 2008.
The tables below list the number of funds/ETFs for the major categories that show positive momentum figures (4wk, 8wk, 12wk, YTD), which means that their long-term trends are intact according to our tracking methodology:
As of 12/31/2007:
Domestic no load funds: 10 out of 598
Domestic ETFs: 6 out of 185
International funds/ETFs: 4 out of 67
Country ETFs: 6 out of 65
Sector ETFs: 31 out of 217
Bear Market funds/ETFs: 11 out of 48
As of 1/9/2008:
Domestic no load funds: 1 out of 598
Domestic ETFs: 0 out of 185
International funds/ETFs: 1 out of 67
Country ETFs: 2 out of 65
Sector ETFs: 24 of 217
Bear Market funds/ETFs: 42 out of 48
The interruption of the up trend is obvious, what can’t be confirmed at this time is if this is just a temporary reversal or the beginning of more downside activity. Since no one can answer that question, you can only do one thing to protect yourself from the uncertainties of the marketplace: Use your sell stops diligently! If you heard me pounding on this fact before, you are right; there is nothing more important than controlling risk in an economic environment that gets cloudier by the day.
Comments 1
Thanks Ulli. Your approach to buying and selling is the correct one. It hurts to sell positions you know will do well long term, but it is always possible to buy they back again once they are going up. Thank you again!