Page 533 - How to Make Money in Stocks Trilogy

402 INVESTING LIKE A PROFESSIONAL

ETFs have changed the way many people trade, although not always for
the better. They offer average investors access to foreign markets such as
India, which limits foreign investors. They also let you trade commodities
and currencies without having to open a separate futures or foreign
exchange trading account. And the advent of inverse ETFs lets those with
accounts that prohibit shorting to put on a short position by buying long.
Since February 2004, ETFs have accounted for from 25% to as much as
44% of the monthly trading volume on the NYSE Arca.
Top-Down Selection
IBD lists the 350 ETFs with the highest 50-day average volume and catego-
rizes them by U.S. Stock Indexes, Sector/Industry, Global, Bonds/Fixed
Income, and Commodities and Currencies. Within each category, they’re
listed by our proprietary Relative Strength rating in descending order.
Ranking ETFs by RS highlights the leaders within each category and helps
you compare them. The tables also list year-to-date return, Accumula-
tion/Distribution rating, dividend yields, the prior day’s closing price, the
price change, and the change in volume versus the daily average.
Aside from reading IBD’s ETF coverage, monitor the “Winners &
Losers” table on the exchange-traded funds page. Every day it lists the lead-
ers and laggards over a given time period, which is rotated daily:

Monday: one-week percentage change
Tuesday: one-month percentage change
Wednesday: three-month percentage change
Thursday: six-month percentage change
Friday: twelve-month percentage change

Owning Both Mutual Funds and a Stock Portfolio

Many smart investors own both funds and stocks. If you have learned how
to manage your stock portfolio with skill using all the CAN SLIM buy and
sell rules, you should be showing improved, superior results during each
bull market and moving out of most stocks in the early phase of each bear
market.