ETFs are a fine thing. They offer diversification to the stock market, while being tradeable like stocks. Another big plus is their fund nature. ETFs are diversified themselves, so that it is possible to apply a true money management with only two holdings per portfolio. Some widely traded ETFs like the QQQ may even qualify for a single hundred percent position.
As a sidenote, for principal considerations a portfolio position should be generally given a maximum share of fifty percent, at least when opening the trade.
So, ETFs seem to offer a convenient investment style. If there are enough promising situations, buy the stocks directly and otherwise put your money back into a few exchange traded funds.
The best trends in the stock market are produced by growth stocks. For trend investing in ETFs naturally the question arises, are there growth funds?
Typically these ETFs are traded on a stock exchange, but they are not managed in the sense that a portfolio manager tries to be invested in the best growth stories there are. Instead, the compostion of ETFs is rather fixed and management is only done by a rebalancing overnight of the ETF’s holdings in some cases like short or double ETFs.
Growth in the ETF world is only known on a sector or country base. Perhaps currencies or commodies qualify at times also as growth stories, or the equivalent of them. But generally the growth speculator is better advised to pick the right stocks.
So, where are those ETF trends then? The answer may astonish you. ETFs are there for trading, at least if you are a trend investor. The ETF itself is the investment, which is because of its diversification more secure than a single stock. But the trends have to be carved out by the trader. In other words, the ETF trend trader is trading shorter trends or is swing trading an ETF.
You want to be an investor and no trader? Trading could also be done rather automatical. Just use this short trend trading software and relax. Having the trading part delegated to this automaton, you are now free to focus on the selection of the right ETFs.
Either select currently swingy ones and use the software as is, or use only the buy signals for ETFs with longterm potential. The sell signal would then just close the position instead of switching it into a short sale.
Will that work? Yes, just believe me, brothers and sisters!