2/5/2010 Frank:

Q: Ulli: In today's blog about the sideways market, you mention JNK and that you have positions in it. I too own that ETF, as well as some other high yield bond ETFs.

Back in December you talked about adjusting the sell stop price for dividends and capital gains. Do you adjust your high price for JNK every month by the amount of the dividend?

I have owned this ETF since last August and my high price is currently 40.10 which was set on Jan. 11th. Should I reduce that price by .34561 when the dividend is paid on 2/9? That would adjust the high price to 39.75 which I would then use to determine my sell stop. Is that correct?

What if that price then stays as the high price through March when the next dividend is paid? Should I reduce it again by the March dividend and then keep reducing each month until a new closing price high is made?

A: Frank: Yes, that is correct. You deduct the dividend from the high price whenever it occurs…whether it's monthly or quarterly. If you don't, your trailing sell stop is incorrect and you may get a false signal prompting you to get out when in fact the 7% level has not been reached yet.

01/29/2010 John:

Q: Ulli: Would you be so kind as to remind me of your practice of what you do when your indicator shows the markets are still in an uptrend but a position you have gets stopped. What is it you do next in regards to getting back in to that position if the position reverses back upwards? I find myself in that situation after the three down days last week. I'm using a 7% sell stop. I have been putting in sell stops that will trigger intra-day. I know you don't do that, but I feel it protects me against a big spike down in the market.

Thank you for your insightful newsletter and for the reply I hope to receive.

A: John: If you like the funds you got stopped out of, you could re-enter once their old high (from which you measured the sell stop to begin with) gets taken out. That’s what I do.

And yes, you are correct, I do no support placing intra-day stops and prefer calculating my exit points based on day-ending prices only. However, your comfort level is all that matters; just be aware that you might experience more whipsaws when using the intra-day stop strategy.

01/22/2010 Ken:

Q: Ulli: I am a 79-yer old who sometimes struggles finding your StatSheet data when your mailing gets stuck in a spam filter. What is the best way to access current and past StatSheets?

A: Ken: First, congratulations for being 79-years old and using a computer and the internet. The best way to have access to all StatSheets is via the archives, which are available at this link:

http://www.successful-investment.com/newsletter-archive.php

You might want to bookmark it so you can get to it quickly.

01/15/2010 John:

Q: Ulli: As it sit here, I can't but help believe I should go 50% cash....my intuition tells me we are operating on a momentum vs. reality basis. I'm no economist but historically I've been lucky...e.g. went into cash November 07. Not asking you to make any moves on my portfolio...just putting my thoughts out there.

A: John: The idea still is to avoid making emotional decisions. The trends are up, and we have our sell stops in place, which will give us an unbiased opinion as to when to get out.

01/08/2010 Steve:

Q: Ulli: Following your advice I have placed 7% trailing sell stops on all the equities including ETFs in my portfolio but I run into broker resistance or incapacity when I attempted to set stops on conventional mutual funds. For some reason (they say), you can't trigger a price not known until 4PM that day at closing. Why not at that price?

In short: How to use sell stops on a mutual fund?

A: Steve: I addressed all sell stop issues in my blog over the past couple of months or so. Here’s one reference:

http://thewallstreetbully.blogspot.com/2009/09/sell-stops-and-mutual-funds.html

Please revisit the articles from October, November and December, which are easily accessible on the right side of my blog layout.

12/31/2009 Greg:

Q: Ulli: If one has a little extra money, which is better; 2% CD or mutual fund? Are there any higher CD'S out there?

A: Greg: It’s not a matter of which is better, but which is most appropriate. If you want safety, use CDs; if you want to invest and occur market risk, but also have potential for higher rewards, then consider mutual funds/ETFs.

12/24/2009 Srini:

Q: Ulli: I have been looking at the weekly reports for last 2 years+ soon after starting my MF investing for retirement. The no of funds listed is formidable and useful and facilitate in monitoring my holdings in both retirement/non retirement accounts.

I have one query. Is there a way of checking the details for some funds I have, but not listed in the weekly report: say jattx, jscvx, jabax, jagtx, prasx, pvadx, prhyx, etc.

A: Srini: I try to keep those funds in my data base that are true no load and have no transaction fee nor any early redemption fees when purchased via my custodian (Schwab).

From your list of funds, JABAX is already included. Keep in mind however, that I only feature the Top 100 in terms of performance, so at times it may be listed, or not, depending on where it ranks. From the remaining funds only 2 qualified for the above criteria, namely JATTX and JSCVX. The others did not due to having a transaction fee or ridiculous early redemption charges.

12/18/2009 Don:

Q: Ulli: I read your newsletter weekly and am completely sold on your trend following approach with stop loss discipline to domestic and foreign equity investing. Buy and Hold is clearly a recipe for excessive portfolio volatility and possible ruin.

Which leads me to my question. Have you ever considered developing something similar to your TTI for fixed income investments (i.e. ETFs and mutual funds)? There are many individual investors like me with a significant portion of our retirement portfolios invested in various fixed income funds knowing that interest rates will have to rise at some point in the future and hoping we will guess correctly when it's time to get out. Since the more conservative of these investments are only producing annual yields of 3% to 5%, waiting for a 5% or 7% stop to be hit before exiting could sacrifice all the gains and then some.

I'd be interested in your thoughts on this.

A: Don: There really is no separate TTI necessary for income investments. You treat these funds like sector or country funds by using their own respective long-term trend lines to get in or out of a position. You can see the % a fund is above or below its own trend line by referencing the %M/A columns in my StatSheet.

If you are more conservative, you can further reduce any downside risk by using my recommended 7% sell stop discipline, or even 5%, if that fits your risk profile better. Keep in mind that the goal is to stay away from sharp declines in the market, which income funds are not exempt from as last year has shown.

12/11/2009 Tom:

Q: Ulli: I have about $9,000 sitting in a stock account for my daughter who is midway through freshman year. I pulled it out of a money market since it was earning nothing. I am thinking to invest 1/3 into an ETF for use in about 2 years. I want to avoid short-term cap gains and also protect the money from losing more than 5% while gaining as much as possible (of course).

Do you have a recommendation, and what should I do with the other 2/3?

A: Tom: You can pick any ETFs you’re comfortable with (from my StatSheet) and use my incremental buying procedure. Invest 1/3 now and if it gains 5%, invest the second 1/3 and so on until you’re fully invested. Use my recommended trailing 7% sell stop discipline, and you have a plan in place to deal with the market’s uncertainties.

12/04/2009 Mark:

Q: Ulli: Suppose in one or more of the recent brief corrections, some sell stops got hit (as mine did). Then within a day or several days, the market reversed and the funds I stopped out of reversed as well – i.e. it had been a whipsaw. How do I decide whether to repurchase the sold funds (albeit at a higher price than the stop loss price) or reinvest the funds in a different fund? Is it simply a matter of relative performance of the sold fund vs. another fund? If so, over what period of time am I comparing performances?

A: Mark: You must have missed it, I talked about that in a blog post not too long ago. You can go one of two ways. One, if you still like the funds you owned, you can re-purchase them once the uptrend has resumed. To me, that is when the prices pierce the high point from which you measured your latest sell stop.

Or, you can select different funds/ETFs with lower volatility, which you can identify by their beta. A fund with a beta of 1 follows pretty much the S&P 500, while a fund with a beta of 0.9 is 10% less volatile.