What to Trade
Until recently, the best investment vehicles available for trading market indexes (like the S&P 500 or Nasdaq-100) were mutual funds from the ProFunds and Rydex mutual fund families. These are still valid choices; however, a new breed of exchange traded funds (ETFs) has emerged to make the task easier and without the restrictions of mutual funds. They trade in "real time" like stocks through any broker you may be using. Like stocks, you will be charged a commission to buy and sell them. The deep discount brokerages like Scottrade, Etrade, and others make the ETF option very affordable. The cheap commissions of today's discount brokerages and low frequency trading of TimingIndexFunds signals makes for a winning combination.
TimingCues returns are calculated using the NASDAQ-100 and S&P 500 indexes which can be traded using the symbol shown in parenthesis in the ETF listings below. Other excellent choices for diversification include the Russell 2000 small cap index (IWM) and MSCI EAFE Index iShares which trade under the symbol EFA. Since stock markets of the world tend to trade in the same direction, this is an excellent choice to further diversify and add international exposure to your portfolio while still enjoying the benefits of the signals.
The "1x" in the following table means that the ETF trades identically to the underlying index. For example, if the S&P 500 appreciates by 1%, the investment for the S&P 500 (symbol SPY) appreciates by 1% and so forth. For "2x", leverage is used to move the investment at 2 times the direction of the underlying index. The designation of "Long" reflects an expectation of the stock market (and therefore the ETF) to rise in value. Conversely, "Short" can be used on TimingIndexFunds cash signals in an attempt to profit from market declines.
Leverage and shorting are very valid choices but should only be used by advanced users who understand the investments and are willing to accept greater levels of risk for the potential of greater returns. For most users, the first four ETF's at 1x and some 2x versions are all that is needed. To borrow a phrase from Charles Schwab, these are the "core" investments. The world market ETFs available to subscribers add additional "explore" choices.
Additional details on these and other ETFs can be found at www.etfconnect.com
Strategy: 1x Long and Cash. Invest in the following on a "Long" Signal and move to cash on a "Cash" signal.
| Symbol | Description |
|---|---|
QQQQ |
1x Long the NASDAQ-100 Index |
SPY |
1x Long the S&P 500 Index |
IWM |
1x Long the Russell 2000 Index |
EFA |
1x Long the MSCI EAFE Index |
Strategy: 2x Long and Cash. Invest in the following on a "Long" Signal and move to cash on a "Cash" signal to capture two times (2x) the movement of the index.
| Symbol | Description |
|---|---|
QLD |
2x Long the Nasdaq 100 Index |
SSO |
2x Long the S&P 500 Index |
MVV |
2x Long the S&P MidCap Index |
DDM |
2x Long the DJIA Index |
Strategy: 1x Short. Invest in the following on a "cash" signal to capture market declines.
| Symbol | Description |
|---|---|
PSQ |
1x Short the NASDAQ 100 Index |
SH |
1x Short the S&P 500 Index |
MYY |
1x Short the S&P MidCap Index |
DOG |
1x Short the DJIA Index |
Strategy: 2x Short. Invest in the following on a "cash" signal to capture two times (2x) the market declines.
| Symbol | Description |
|---|---|
QID |
2x Short the NASDAQ 100 Index |
SDS |
2x Short the S&P 500 Index |
MZZ |
2x Short the S&P MidCap |
DXD |
2x Short the DJIA |