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Sector Rotation

Trend Following - Trend Following Traders Returns for 2008

Sector rotation and trend following are interrelated parts of most successful trading strategies. As we all know, 2008 was a tough year in the market. But trend following allows you to follow trends down as well as up, so it could be successful in bear markets as well. Here’s a look at a study of trend following returns for 2008.

Sector Rotation Strategy - Simple Rotation Trades Just One Fund a Month

This sector fund trading system uses a strategy of sector rotation that only trades one fund at a time from the Fidelity sector funds (the Select Funds). It’s performance is pretty good overall, although it tends to have drawdowns at least as deep as the overall market.

The overall stock market has had a run of flat performance over the last several years. If you look at the performance of the S&P 500 from 1999 through 2005, you’ll see that it was up about 0.2% compounded annual return, not much better than a money market fund, and the Nasdaq 100 has fared even worse. Granted, it got there in an interesting way, but overall it basically went nowhere.

Oil Stocks - How to Invest in Oil Stocks

Should I invest in oil stocks?

That’s a question that a lot of investors have been asking themselves over the last couple of years. The fundamentals of the oil stocks story aside, the case can be made that investing in oil stocks is a reasonable way for the average investor to hedge his individual energy costs (like the price of a tank of gas or your electric bill) with part of their portfolio. It’s interesting that paying an extra $5 a tank at the pump doesn’t feel so bad if you have oil stocks in your portfolio that have just gone up 5% as well. And many average investors can’t trade crude oil directly.

Of course, these are some of the most volatile stocks around, and many of the penny stocks are associated with the energy industry as well. So, how best to invest in oil stocks?

The Best Mutual Funds and ETF Trades | Choosing the Best Mutual Funds

The most common question: How do we make our mutual fund and ETF trading system selections? Ours is a system based on sector rotation using a relative strength. We touch on this in our fund trading course, but we often get asked to supply more information on our systems. Today we will start a small series of postings on just how we select our funds.

Narrow Sector Index Funds for Sector Rotation Systems

Many investors like to use narrow sector index funds as a good blend that captures some of the trending tendencies of individual stocks, but with significantly less volatility as a vehicle for a sector rotation system.