A.I.M. Users Bulletin Board

[SFSecurity]

Hi Gang, In looking over ETFs, the majority have less than a 2:1 high to low 52 week range, so how would you approach setting your buy/sell/% of stock settings?

In looking at some I noticed that even if you got in very near the 52 week bottom a buy on the first sell, using 5% sell safe and 5% of stock, i.e. 1.1 x (last buy price), can put you fairly close to the 52 week high. For example PGF, which pays ~6%, it's 52 week low is $16.81 so if you were to buy at the first sell above the last buy (assuming $16.81 is that last buy signal) that would be at $18.49, if I've done the math correctly.

But the problem with that is the 52 week high is only $18.32 so you would never get a buy unless it was a raging bull market.

There are lots of ETFs with a better 52 week range but as far as I can tell not many pay a significant dividend. Of the 91 a high to low of 2 or better, only 8 pay above the ~2% of the ValueLine average for stocks. Of the 166 with a high to low ratio greater than 1.75 only 15 pay above ~2%. Of those greater than 1.5 to 1, 303, only 41 pay more than ~2%.

Given this it seems to me that the buy/sell/%stock figures need to be different than for non-ETF positions.

So it seems to break down as a choice between [ETF+dividend] appreciation versus solely (for practical purposes) [ETF] appreciation. If it is just ETF appreciation it seems like there would be at least somewhat more risk involved, and a likelihood of less return for the risk. Does this make sense?

Best to you and yours, now and in the New Year,

Allen