Using Investor Scorecard, Trading ETFs

Scheduling Note: My youngest daughter, whom I speak of often, is entering her final year of grad school, studying speech pathology. Part of the studies involves her being put into different environments, learning which she may wish to pursue. One of those environments is working in an elementary school. Tomorrow we bring her back to Boston, so she can fill out paper work at that school, then bring her home again. She starts school and work next week. We may choose to do other things while in Boston and come back later, we may not. Therefore tomorrows updates may or may not be on the late side.

I am well aware that you cannot buy the Morningstar Sectors per se. However, when you see a sector that you like, just do a Google Search to find and ETF or several ETFs that are substitutes. Remember last week’s look at the RA analysis along with the Investor Scorecard score?

Before we look at some representative ETFs back in 2012 from when they appeared on the Investor Scorecard with the criteria as explained, 2012 was not a particularly bullish year, not bearish either. What I would call sideways with an upward bias.

Screen Shot 2014-08-29 at 8.22.08 AM

With that in mind let’s go over some of the potential ETF finds. You can usually find an ETF that Fits but sometimes a Fidelity Select Funds fit just as well.

  • January 2013…picking a few: Drugs, Health Services, Utilities. Let’s substitute the following ETFs for Drugs (SPDR S&P Pharmaceuticals ETF (XPH)) Health Services (Vanguard Health Care Index Fund (VHT)), and Utilities (XLU).

Screen Shot 2014-08-28 at 10.05.23 AMScreen Shot 2014-08-28 at 10.07.07 AMScreen Shot 2014-08-28 at 10.09.22 AMThese charts come all the way out to present time from January 2012. Steve’s point was the leadership over the next 6 months which you can see in the charts above. All very nice gains whether over the 6 months or over the 2+ years.

  • February…No Matches
  • March…Automotive (CARZ First Trust NASDAQ Global Auto Index Fund) or Select Automotive Portfolio (FSAVX)

Screen Shot 2014-08-28 at 10.16.57 AM

This one did not work out as well as the January leaders but it was not a disaster either.

  • April…Leisure, Computer Hardware, Internet (First Trust Dow Jones Internet Index Fund FDN) Computer hardware stocks are usually found in technology sector ETFs and Funds. Leisure – (PEJ) PowerShares Dynamic Leisure & Entertainment Portfolio

Screen Shot 2014-08-28 at 10.21.40 AM

  • May…Chemicals, Food and Beverage,Insurance, Select Chemicals Portfolio (FSCHX), PowerShares Dynamic Food & Beverage Portfolio (PBJ)

Screen Shot 2014-08-28 at 10.27.07 AM

I did not realize when I copied the charts that I did not copy the word Weekly, these are weekly charts. You get the idea  😉

It may be and probably is a situation where what is needed is a breakout point once these ETF’s come to our attention. You could consider the SAR or the Chandelier on Weekly Charts.

Talking Points and The battle between your present and future self: 

The Cyber-Terror Bank Bailout: They’re Already Talking About It, and You May Be on the Hook (Bloomberg)
Secular Stagnation Or The Cusp Of A Boom? (Alhambra)
A sour mood despite sweeter outlook (LA Times)
Where the Five-Day Workweek Came From (The Atlantic)
Why you need a healthy amount of uncertainty in an economy (Quartz)
Nation of Privilege Versus Rule of Law (Bloomberg View)
The Changing Face of Temporary Employment (NYT)
Whatever Happened to Corporate Stewardship? (HBR)
Using Mean Reversion and Momentum for Possible Advantage (Aleph blog)
A Rise in Wealth for the Wealthy; Declines for the Lower 93% (Pew)
Bond market conundrum redux (Econombrowser)
How Diversification Works (A Wealth of Common Sense)
Secular Stagnation & Personal Savings (GaveCal)
At Work, Every Friday Should Be a Summer Friday (Science of Us)
How Corporate Share Buybacks are Destroying America (Reformed Broker)
The Eternal Problems Silicon Valley Can’t Solve (Fast Company)
The Human Toll of Offshoring (NY Times)
Feast of the Wingnuts (New Republic)

Daniel Goldstein: The battle between your present and future self

Have a Great Day!