Toronto-based adviser taking advantage of rally to sell high-flying stocks and buy more of his favorite bond ETFs and DFA funds.

 

Mike Bayer considers himself a contrarian investor.

In the past few months, as stock markets soared, that sort of go-against-the-grain approach has taken center stage.

The Toronto, Canada-based adviser and president of Strategic Analysis Capital Management says he prefers to buy exchange-traded funds and mutual funds from Dimensional Fund Advisors when they’re out of favor.

“The problem most investors have is that they tend to trade too frequently and make changes in the wrong direction. They’re buying high and selling low,” said Bayer, who works with individual and institutional clients in Canada and the United States.

Since early March, SACM has been taking advantage of the rally in stocks to rebalance client portfolios. Bayer has been trimming positions in the Vanguard Emerging Markets Stock ETF (NYSE: VWO).

“Emerging markets have had a big run-up in

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Whipsawed by increasing market volatility, third-quarter results for blue chip ETFs in similar style categories thrown all over the map.

 

As investors prepare for a final three-month push to raise dour 2008 returns, third-quarter trends point to lower markets at least in the near-term.

But much hinges on a $700 billion bailout package for some of the world's biggest banks and financial services firms. And even if that passes both chambers of Congress, economists aren't expecting the ongoing global credit crisis to end right away.

The performance of the most liquid blue chip stocks in the U.S. under such choppy waters is likely to undergo increased scrutiny. Perhaps the most transparent way to monitor the large-cap universe as a group is through exchange-traded funds.

Below is a Q3 review by IndexUniverse of that category by investment style using Morningstar Inc. data.

Large Value

Ticker

Q3 (%)

IVE

-4.86

IWD

-6.15

VTV

-6.31

PRF

-6.38

DLN

-2.50

After a rough

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