Q: Why should I believe what you are saying?
A: You don't have to believe me. Everything in The ETF-Discipline is standard investing practice, which you
will find in the References. The contribution of the Letter and supporting materials is to organize the various
methods into a disciplined process. Whether it works is more dependent on market action and your timing
than on the procedures. Your risk is low. For the price of the book and a free one-month ETF-Letter
subscription, you can see in a few hours whether the approach is a good fit . Contact us for the free trial.
Q: Why is the ETF-Discipline different?
People who buy and sell, whether they know it or not, they are trading. The ETF-Discipline applies trading
methods and discipline to fund investing, giving you a more organized approach than buying, holding, and
unplanned selling.
Q: Aren't you just "timing the market?"
A: That phrase is often bandied, but is actually vague. We don't predict the market and try to invest ahead of
it. We constantly remind ourselves that we can't predict the future. But chart patterns often repeat and when
combined with news and sentiment that suggests probable outcomes, they provide an edge that allows you to
join a trend earlier and get out sooner when it breaks.
Q: What is the worst thing that can happen if I invest using the ETF-Discipline?
A: The worst thing that can happen is starting the ETF-Discipline process and then not using it later when
the market takes a tumble. All investments involve risk. The ETF-Discipline controls risk with specific sell
rules. Diligently following them, you can limit losses to any degree you desire. You will be tracking progress
daily; if you find that losses are not acceptable, or the procedures don’t fit your lifestyle, we recommend
selling out and dropping the strategy.
Q: Should one buy ETF's or actively managed mutual funds?
A: Our anecdotal observations suggest that ETF's move up fastest at the beginning of rallies because
institutions buy them and their underlying stocks in volume. As the rally matures, the index stocks become
overbought and stagnate, and the best active fund managers replace their losers with lesser known issues
that are still gaining. Occasionally the ETF-Letter will identify these. But all mutual funds have a big
disadvantage in today's volatile markets—they cannot be traded intra-day. In sell-off triggered by something
like a bank collapse, your losses can exceed 10% before you are able to get out. ETF's allow for pre-planned
stops and greater safety.
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