Trend Following as opposed to Buy and Hold Investing

There is a big transformation happening in the mentality of investors. After witnessing two major market melt downs in the last decade they are not very happy with the notion of buy and hold investing. Proactive trend following investment strategy is gaining momentum.

Using ETF market timing as an instrument is a more conservative approach to investment. It is more appealing than mutual fund timing and trading since ETFs can be bought and sold during market hours. ETFs’ management expense ratios are far lower than mutual funds. The cost of trading ETFs is also much lower since you can trade them at discounted fees. Some ETFs such as SPY, QQQQ and EEM have daily volumes that surpass the largest NYSE stocks.

Risk control is easy with exchange traded funds during market hours in contrast to mutual fund trading where trades are executed after market hours.