Despite its ups and downs, October turned out to be a good month for those invested in the right sectors. The top 10, as well as the worst 5 crowding the bottom of the totem pole, from the 500 ETFs I track, are listed below. Please note that the figures shown cover the past 4 week period:

Here are the top ten along with their gains and current M-Index ranking:

1. FXI (+22.65%, 57)
2. IFN (+21.92%, 35)
3. GXC (+21.80%, 31)
4. EEB (+20.90%%, 47)
5. USO (+19.76%, 31)
6. DBO (+17.98%, 18)
7. EWZ (+17.02%, 43)
8. PGJ (+16.49%, 48)
9. IIF (+15.83%, 26)
10. GDX (+15.65%, 25)

And here’s the bottom of the barrel:

1. RYF (-12.28%, -12)
2. UYG (-9.42%, -4)
3. SMH (-9.28%, -6)
4. IAT (-7.11%%, -9)
5. KRE (-7.07%, -8)

It’s obvious that there is a huge difference between these two extremes. If you have missed the upswing, then you should look into using trends to identify those ETFs with strong upward momentum along with our M-Index ranking. It goes along with one of the basic laws of physics: “A body in motion tends to stay in motion.”

While this is not a guarantee that an up trend will never end, it allows you to ride upward momentum as long as possible. When used in conjunction with a trailing stop loss strategy, you’ll never have to guess when to sell; simply let the market tell you when it’s time to get out.

Uncertainty ahead of the Fed meeting had the markets move sideways. Today’s announcement could be a trick or treat with many hoping for another interest rate cut of at least ¼ point.

Below please find the link to the most recent ETF Master list, which has been updated with yesterday’s closing prices. This will enable you to work with more recent data. You can download the file at:

http://www.successful-investment.com/SSTables/ETFMaster103007.pdf

Our Trend Tracking Indexes (TTIs) moved higher from last Friday’s close and remain in bullish territory with the domestic and international TTI having moved above their long term trend lines by +6.56% and +4.79% respectively.

Seeking Alpha had a short blurb on the interpretation of investor sentiment. The story cites a recent sentiment survey showing that the sharp drop on the 20th anniversary of the ’87 crash caused bearish sentiment to rise to its highest levels since May of this year.

Their 5-year chart supports the view that, after extreme high sentiment readings that, more often than not, the markets performed well—at least for some amount of time.

It’s a contrarian indicator that is interesting to note, but I would not hold my breath but rather rely on my sell stop discipline to get me out of the market should it turn out that the bears are right this time.

While there are not too many articles featured in MarketWatch that I can agree with, there was one recent feature titled “Knowing when to get out” that was very sensible. It addressed the fact, I have been hammering on for years, which is that your portfolio can benefit immensely from having a selling strategy.

While the story is not very explicit on what an investor can do to set up and implement a selling method, it nevertheless is a step in the right direction. I have to agree with the assessment that “selling is an art and buying is a trade.” To my way of thinking, ‘when’ you sell is far more important than ‘when’ and ‘what’ you buy. Why? Because when you sell at a profit, monopoly money turns into real money.

Not too long ago, I read Brian Tracy’s book “Something for Nothing,” which deals with an emotional, economic and sociological epidemic which is sweeping across America and the world today.

Tracy argues that this phenomenon destroys individuals, undermines societies while at the same time threatens the future of civilization. The epidemic he refers to is rooted in the out-of-control and insatiable demands of thousands and millions of people trying to get “something for nothing.”

His main argument is that our country’s greatness is based on honesty, integrity and fair dealing. However, today these principals are undermined by people attempting to take rewards they have not earned and riches they do not deserve from other people.

Tracy proves that this is not, nor has it ever been, the American way. While he zeros in on the problem, he helps the reader set a personal and culture-wide agenda for change in our nation.

It’s a well written book and, while you may not agree with every assessment, I found myself stimulated to think about the problems he addresses, which made it a worthwhile read for me.

MarketWatch had an interesting story called “Sell All Your Mutual Funds!” It featured one of America’s biggest financial advisors telling his clients about “the lies that are placing your financial security in jeopardy.”

Apparently his new book uncovers some of the ways investors are being taken advantage of, and he uses no uncertain terms. While I have not read the book, I have for years fought with a variety of mutual fund companies about stupid policies designed to protect the firm but leave the investor holding the empty bag.

But should you really sell all of your mutual funds? To me, it’s a “depends” kind of question. If you are a Buy & Hope investor, then you should not pay year after year the fund expenses and remain in an underperforming fund, just because “you have been with them such a long time.” Unfortunately, that’s what many people do, which is one of the reasons for the above book promoting the sale of all mutual funds.

However, in my advisor practice, I still use both, no load funds and ETFs. To me it’s a performance issue and nothing else. When using our trend tracking approach, we try to be in the top performers according to a client’s risk tolerance. That means that we will not be in the same fund or ETF for many years, but only during those periods when the markets are in an up trend.

So, who cares if a fund has higher expense ratio as long as it performs well. Are there funds right now that are performing better than ETFs? Sure, my data base shows that, as of yesterday, the highest M-Index ranking for domestic ETFs was 14, while there were 9 no load funds that ranked higher.

For example, the top no load fund (in the domestic arena), according to my ranking, is WLGYX, in which we have a large position. There currently is no ETF that even comes close.

I am sure that the annual expense ratio is probably twice that of the nearest ETF. So what? I am in this fund for as long as the cycle lasts, the performance remains, and then I will get out. Viewing expenses in direct relationship to performance over a limited time will give you the best of both worlds.

There is no need to clutter your mind deliberating whether ETFs are better than mutual funds; use the tool that’s most appropriate at that point in time you are planning to invest.