This week in our ongoing ETF series I want to take a look at the effects cross currency exposure can have on the performance of some ETFs. When we trade ‘domestic’ stocks on our own stock market (ASX for Australia) using our own currency (Aussie dollars), we are never exposed to currency movements as all…
In my earlier postings on the use of ETFs by investors, I wrote that some of the major benefits of ETFs for the ordinary investor included the fact that they can be traded in your share trading account and as a result allow for portfolio diversification. This week I would like to look at this…
Our initial discussions on using ETFs began with the concept of a single ETF that tracks a major global equity index such as the S&P500 (SPY) or the S&PASX 200 (STW) indices and how that even this simple strategy with dividends without any ‘timing’ could outperform 70% of active fund managers, on average over the…
Returning to our series on ETFs and how as active investors and traders we can use them to not only be our own fund manager, but also to out-perform the vast majority of fund managers, this week we take a look at a multiple ETF strategy. This simple multiple ETF strategy builds on the single…
The ASX200 (XJO) had a clear and significant breakout on 3rd February this year when it rose and closed above the high of 5679 that occurred on 21st August last year. The ASX200 closed last week at 5881, some 202 points above that high. ASX200 Chart The weekly chart below shows solid black trend lines…
Single ETF Strategy – with timing Last week we discussed the use of a single ETF strategy to replicate the return of a stock market index such as the S&P500 using the SPY ETF, or the S&PASX200 using the STW ETF. This simple strategy uses no timing techniques, but is just a simple “buy and…
The arrival of ETFs on the investing landscape, their increasing popularity and their ongoing expansion to cover more and more sectors, specific industries, commodities and market segments continues to open up more and more opportunities for passive and active investors. Having discussed many of these benefits over the past few weeks, we can now look…
Traditionally, investors looking to hold a portfolio of index weighted stocks had two choices; invest in a mutual or managed fund, or attempt to partially replicate an index by buying some of the stocks within that index. Both of these methods have their disadvantages. Using managed funds leaves your money at the hands of a…
With the planned launch of our new ETF trading methodology fast approaching, I thought it would be timely to explain what ETF’s are and how they work. What is an Exchange Traded Fund (ETF)? An exchange-traded fund (ETF) is an investment fund that trades on a stock exchange just like stocks. An ETF holds assets…
As traders we constantly hear the advice that we should develop and stick to a trading plan. For some of us this is easy to adhere to, whilst others struggle with the concept and the reality of sticking meticulously to the rules they have defined in a strict trading plan. One of the main reasons…