You just never know what all you can do with the concept of trend tracking until someone else tells you about it. That was the case with reader KD, who more or less customized trend tracking to match his risk tolerance and investing preferences.
Here’s what he had to say:
I thought I would share some of my results since we first communicated. In March 2009 I had a net worth of about $3.9 M of which $0.5 M was house, leaving $3.4 M investable. In March 2011, I have $4.9 M investable.
With your help, I avoided the 2008 fiasco and then jumped in with both feet in the 2-3 qtr 2009. I like to balance my portfolio with income producing instruments, but don’t care for typical bonds. In the 4 qtr 2009 I bought about $1.3 M CEF munis, paying 5-7% tax free, and sold them in November 2010 for a substantial capital gain and then invested about $1.5 M in oil & gas pipeline MLP’s, which pay 5.5% to 7.5% and are now worth about $1.7 M. I use cefconnect.com to help select the CEF’s and tickerspy.com to help me select the MLP’s.
The balance of my portfolio is in ETF’s. My account is with Etrade and I use only limit orders. Cost is $10 per execution. Note I follow your trend tracking index and will go to 100% cash if the market turns against me.
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