The Penny Sleuth Features: Penny Stocks, Options and High-Growth Opportunities! |  |      | 3 Funds to Add to Your Technical Toolbox By Jonas Elmerraji February 17, 2011 Dear Penny Sleuther, The old guard are changing on Wall Street. Today, active, tactical investment strategies aren’t just available to the wealthy — for the first time, retail investors have access to investments once only open to hedge fund investors and institutions. I’m talking about technical analysis-driven mutual funds and ETFs… When most investors think about technical trading, they envision short-term day traders and swing traders — not long-term holders. But the truth is that technical trading strategies can be applied to any timeframe (in fact, some of the most successful technical traders employ long-term techniques). It shouldn’t come as a surprise, then, that technical-driven funds are starting to dot the investment landscape. Urgent Profit Alert to Hit Your Inbox on Wednesday… Witness strategy that produced 97% success — 123 winners in 127 moves! 2008 provided a big impetus for the introduction of technical funds. With a nearly 37% drop in the S&P 500 index, buy-and-hold fundamental investors began to realize the truth in John Maynard Keynes’ famous claim that, “markets can remain irrational a lot longer than you and I can remain solvent.” At the same time, gaping holes were forming in traditional academic market models like Efficient Market Hypothesis, which essentially believes that the market always instantly reflects correct fundamental pricing. The crash of 2008, and the rally of 2009 were proof positive that markets reflect how people feel about the value of an asset, not the textbook value of the asset itself. And the big trading gains being made by some technical traders in 2008 didn’t help things. So, how can you harness the power of technical analysis without being a market guru? Here’s a look at the three funds on the market right now, and how you can add tactical exposure to your portfolio… Active exchange traded funds (ETFs) have been a source of excitement on Wall Street for the past few years, but one of the most exciting funds out there is the Cambria Global Tactical ETF (NYSE: GTAA). This unique ETF uses a quantitative trend following approach to invest in a basket of diverse asset class ETFs — and get out of the market when the trading system indicates trouble. More interesting, though, the fund is completely transparent in its methodology — Mebane Faber, one of the fund’s co-managers has even published a research paper on the strategy (as well as backtested results of its effectiveness). While this fund has only been around since last October, it’s an investment that should be on investors’ radar in 2011. 49% Gains in 21 Days and 61% Gains in 14 Days — Next Profit Alert Live on Wednesday Watch the presentation that reveals how one unique market strategy recently booked 123 winners in 127 moves! That’s 97% success! On the mutual fund side of things, two technical-driven funds have popped up in recent years: the aptly-named Huntington Technical Opportunities Fund (HTOAX) and John Hancock Technical Opportunities Fund (JTCAX). Essentially, both funds look for stocks and ETFs (HTOAX has the option to invest in options and fixed-income) that have attractive technical criteria, based on factors like, “price, volume, momentum, relative strength, sector/group strength and moving averages.” As with the Cambria Global Tactical ETF, these technical mutual funds have the ability to move to cash when the investing environment becomes unruly. For investors looking for a way to dip a toe into technical analysis — and diversify their portfolios away from traditional fundamental investments — these three funds are an exciting new trend in the investment community. We’ll be keeping an eye on this space as similar products hit the market… Sincerely, Jonas Elmerraji P.S.: If you want to add technicals to your investment strategy, you don’t have to buy longer-term funds — in fact, you can generate active, consistent income as a short-term trader even if you don’t have any “special” market skills. My system’s 97% success rate is proof. Just click here to see how it works before my next profit alert goes out… 3 Funds to Add to Your Technical Toolbox is featured at Penny Sleuth.
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