The Worst ETF Of 2008

Ulli Uncategorized 2 Comments

The Natural Gas ETF UNG has to go down in history as one of the worst performers in 2008 and possibly 2009.

The downtrend, which started in June of 2008, still has not come to an end and those investors holding on for dear life may have hard time making up their losses.

Why bring it up now?

If an investor had followed the major trend such as I advocate, there would have been two opportunities to get out of this ETF with minimal losses or even profits, depending on the entry point:

1. The use of a trailing sell stop would have triggered a sell about 10% off the high (upper arrow) or

2. The breaking of the long-term trend line to the down side (lower arrow) would have been the final confirmation that a major trend change is about to occur; or is at least very likely.

Since you never know beforehand if one of your holdings is about to turn south in a big way, these simple techniques can make sure that your portfolio survives turbulent times in the market.

Disclosure: We currently have no positions in the ETF discussed.

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Comments 2

  1. Should the trailing stop loss be set according to one's appetite for loss?

    I have been monitoring my own portfolio and found that a lot of stocks goes down around 15% during a week of weakness.. but inevitably gains back most of the 15% during a week of strong market.

    Wouldn't a 15% or 20% trailing stop loss be a better stop to prevent false triggers ?

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