ETF Update: The Fear Trade
Jeffrey Miller (February 22nd, 2009) Writes:
One of the strongest features of a trading system is that it forces the user to look beyond the human interpretation of data. Evaluating systems can be done through appropriately designed tests. Evaluating human management is nearly impossible. There is never enough data, and circumstances change. Even Warren Buffett is now drawing criticism.
A system forces one to re-examine fundamental principles, looking for possible exceptions.
Let us suppose for a moment that there is a divergence between our expectations -- for the economy, for profits, and for stocks -- and the general market perception. With a long enough time horizon, an investor can, and perhaps should, act upon those expectations. Even so, it would be even better to time entry points to coincide with the changing market.
Our trading method, looking at Trends, Cycles, and including a bit of Anticipation, considers which ETF's ...


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