RE: Beginners Questions
(2013-11-26, 02:59 PM)theory6453 Wrote:May I add that isatrader's updates on sectors and indices is one of the many highlights of this excellent website.(2013-11-26, 03:33 AM)BoyPlunger Wrote: has anyone looked at the mutual fund switching method explained by Stan in chapter 9?
I can't really see a tangible benefit over trading stocks but I'd assume this method is even easier now with ETF's instead of no load mutual funds?
I have been using the mutual fund switching method on my 401k account since August and so far I think it works great. I have my funds in an index fund that is tracking the Russell Small Cap 2000 (up 35% this year). My current stop is at 1000 and if it hits that I will move to money market account (or possibly S&P index fund if that is still rising).
The only reason I can think to use mutual fund switching in your taxable account over individual stocks would be if you'd rather have exposure to an entire sector... otherwise stocks are better IMO.
The little swap of thoughts above raises a good set of questions about forest, wood and trees, and, if I find myself dealing in and out too much, I find it good to think them through.
As an extra point, If, as Stan said in his Dec 2013 interview, it is hard to cope with the rapid sector rotation and the need to be stock specific, you have also to think: if I try to keep up with fast rotation, (leaving aside the use of short ETFs) will I manage with dealing in stocks to net beat a broad index, let alone the best sectors.