How It Works

The advent of mutual funds gave the average citizen the ability to be in the stock market without spending much time worrying about individual stocks.

The ETF era has added to that by giving the investor the ability to fine tune those sector investments and enter or exit them as easily as buying or selling a stock.

Many people would say, "just stick to index mutual funds-- buy them and hold them through thick and thin."  We agree.  That plan works well enough for most.

But, if you're someone who lands in between the passive mutual fund investor and the amped up stock trader our strategy is, maybe, more interesting and profitable.

We approach the market through 4 ETFs to cover the range of US-based companies.  Those 4 ETFs are:

QQQ-- NASDAQ 100 Index
IVV--   S&P500 Index  (SPY also works)
RDIV-- Oppenheimer High Yield Dividend ETF for "Value" stocks
FFTY-- The Innovative Fund for the IBD 50 small stocks

The percentages of the portfolio devoted to each is up to the investor's risk profile entirely.  One can study the 4 ETFs on Morningstar or a similar site of your choosing.

Then, when the market is in an uptrend we stay 100% invested in the 4.  When the market is under institutional selling pressure we drop to 50-75% invested, the rest in cash.  If the market goes to full correction we go to 0% invested/  100% cash.  Additionally we have a 5% stop-loss on each ETF.

Re-entering the market after a confirmed rally begins we buy in tranches, 50% to open, then another quarter if conditions warrant until finally we reach 100% invested.

It's that simple.