Trend Trading Mutual Funds - Trend Trading ETF System

There are 5 key factors to keep in mind when creating a fund portfolio. We've included links to detailed articles on each topic:

1. Does Investing in Index Funds Work?


2. Sector Trading - Finding the Bull Market


3. The Trend is your Friend


4. Volatility is the Enemy


5. You need to buy the Right Fund Family

We have several other articles like this in our Investing for Beginners course.

We explore 3 basic approaches to managing risk in your mutual fund portfolio.

Market Timing:

This is the granddaddy of risk management techniques. Of course the idea is to get into the market when it looks like it's going to go up, and conversely get out when the downside risk is unacceptable. However, with mutual funds we have the additional constraint of dealing with the Early Redemption Fees (ERF's) imposed by the mutual fund companies. We explore some timing approaches that have done a reasaonable job of getting in and out of the market while not tripping over the ERF's of the fund companies.

Diversification:

Everyone talks a great deal about diversification, but so much of it does little to actually protect your assets in a market downturn. We explore the (simple math version) of what makes for good candidates to diversify your portfolio, and identify the 2 Best Funds to Diversify your Portfolio.

One way many investors try to diversify their portfolio is with a postition in bond funds. In this article we take a look at the stocks vs bonds tradeoff for diversifying your holdings.

Hedging:

The problem with hedge funds these days is that almost any non-standard investing approach can call itself a hedge fund. Originally, hedging was a technique where you sold off some of your risk to speculators who liked the idea of buying market risk in the form of index options or futures.

While all that is more than most people want to do with their investment portfolios, it turns out that for a simple hedge all you have to do is add one mutual fund or ETF to your portfolio, and you can hedge away much of the risk from a stock market drop. We develop a model portfolio using this technique that almost anyone can follow.