Week 1 of the experiment comparing a Buy and Hold ETF portfolio vs. a moving average ETF trading strategy is over. Investor A (Buy and Hold) is not a happy camper at all. In the first week, Investor A lost $683 of his $10,000 investment. This is a 6.8% loss in just 1 week! Investor B (50 day moving average/200 day moving average ETF trading) is a bit happier than Investor A. Investor B only bought 2 ETF's at the start of this experiment and lost about $22 this week. Here is the graphical representation:
Some background:
The experiment started March 1. 2009 and I used the closing ETF prices from 2/27/2009 (the last trading day in February). Investor A invested all of his $10,044 in a balanced ETF Portfolio (I was shooting for a balanced ETF portfolio using $10,000, but had to round off to get as close as possible to $10,000). Investor B is using the 50 day moving average compared to the 200 day moving average ETF trading strategy and only bought 2 of the ETF's from the balanced portfolio. He too has the same amount to invest ($10,044).
To see the balanced ETF portfolio and read more about Investor A, check out my post titled Selection of Balanced ETF Portfolio. To read more about Investor B's moving average ETF trading strategy, check out my post titled Actively Managed ETF Portfolio.
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