The Ultimate Guide to Trading ETFs: How To Profit from the Hottest Sectors in the Hottest Markets All the Time

The Ultimate Guide to Trading ETFs: How To Profit from the Hottest Sectors in the Hottest Markets All the Time

by Don Dion, Carolyn Dion

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Overview

An essential guide to trading trends with ETFs

At any given time, a particular country's market or a particular segment of the market-such as energy or technology-might be booming. The Ultimate Guide To Trading ETFs provides a time-tested strategy for using exchange-traded funds (ETFs) to profit from these trending markets and sectors.

By monitoring the performance of ETFs, authors Don Dion and Carolyn Dion show how to capitalize on these fast-moving, ever-changing trends. He then discusses how to stay ahead of the curve by identifying markets and sectors that are gathering momentum and monitoring those markets for signs that the momentum is losing steam. Dion also explains how you can build a balanced portfolio of ETFs and manage your allocations to profit from the shifting trends.

  • Provides advice for both aggressive investors who are willing to utilize leveraged and short market ETFs, as well as more conservative investors who want to limit risk
  • Highlights a wide variety of ETFs currently available to investors
  • Shows how to profit from fast-developing trends across all markets and sectors

The world of ETFs has created many options for individual investors, and The Ultimate Guide To Trading ETFs shows you how to make the most of those opportunities.

Product Details

ISBN-13: 9780470604373
Publisher: Wiley
Publication date: 11/30/2010
Pages: 224
Product dimensions: 6.10(w) x 9.10(h) x 0.90(d)

About the Author

DON DION is the publisher of the Fidelity Independent Adviser (fidelityadviser.com) family of newsletters. He is also President and founder of Dion Money Management (dionmm.com), a fee-based investment advisory firm to affluent individuals, families, and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios, and overseeing the performance of client accounts. Dion began his career as a certified public accountant with Ernst and Young and holds a law degree from the University of Maine and an LLM in taxation from Boston University.

CAROLYN DION is an analyst and associate editor for the Fidelity Independent Adviser family of newsletters, Dion Money Management's affiliate newsletter company. In addition to her role as analyst and editor, she is Vice President of Dion Money Management, where she assists in the development of ETF strategies. Before joining Dion Money Management, Carolyn worked as an ETF market maker for Kellogg Specialist Group on the New York Stock Exchange and American Stock Exchange. Dion received a bachelor's degree from Bowdoin College in Brunswick, Maine.

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Table of Contents

Preface ix

Acknowledgments xi

Part I ETFs: A New Way to Invest and Trade

Chapter 1 Taking an Active Approach with ETFs 3

Understanding ETFs 5

Basic Tenets of ETF Investing 8

Active Investing Approach 11

Three Must-Know Types of ETFs 12

The ETF Investor 16

Portfolio Approach 17

Conclusion: The Discerning, Active Investor 18

Chapter 2 Judging ETFs 21

Launching a Fund 22

A Book Is More than the Proverbial Cover 26

Beware of Zombies 29

Nontraditional ETFs 31

Keep Your Eyes Open 35

Chapter 3 Understanding Indexing: New Options for Investors 37

Traditional ETFs 38

Targeting Sectors with Cap-Weighted Indexes 40

Beating the Market with Customized Index ETFs 42

Dynamic ETFs 45

Life-Cycle and Hedge Fund ETFs 47

Currency Carry Trade ETFs 49

Active ETFs 50

Looking Ahead 53

Part II Asset Allocation Strategies

Chapter 4 Building a Portfolio Using ETFs 57

The Super Hands-On Active Trader 58

The High-Touch Satellite Investor 59

The Portfolio Builder 61

Investment Continuum 65

The Importance of Diversification: Nothing to Excess 66

Intelligent Diversification with ETFs 70

Chapter 5 Trading: Navigating the Storm 73

Placing Your Trades 77

Be Aware of the International Disconnect 78

All about Liquidity 79

When Newer Isn't Necessarily Better 86

Big Picture and Short-Term View 89

Chapter 6 International Investing 91

Gaining Exposure through Regional Funds 92

Single-Country Promise and Pitfalls 94

Commodity Plays 99

ADRs versus Ordinaries 102

Shifting Targets 103

New Offerings Ahead 105

Chapter 7 Gaining Exposure to Commodities 107

Physical Commodity ETFs-Panning for Profits 108

Equity-Based Commodity Exposure 111

Beware the Futures-Backed Commodity Fund 114

Using ETNs to Gain Access to Commodities 117

Commodity Exposure: A Cautionary Tale 121

Chapter 8 Staying Current with TIPS and Currencies 125

Dealing with Inflation 126

Currencies 129

Summing It Up 134

Part III Tying It All Together

Chapter 9 Looking Ahead: A Changed Landscape 139

Victims of Their Own Success 144

Searching for Opportunity 148

It's Time for a Change 150

Back to the Future 151

Appendix A ETF Ranking System 155

Appendix B Tax Guide for ETF Investors 189

Appendix C Growth of the ETF Industry from 2000 to 2009 201

Appendix D Sample Model Portfolios 203

About the Authors 207

Index 209

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