Moving Average ETF Trading Strategy Update for Week Ending 8-7-09

Big changes to the moving average investor's portfolio this week. He checked the 50 day/200 day moving average for all 10 ETFs in the balanced portfolio and changes were indicated in three ETFs.

The following three ETFs indicated a buy signal as the 50 day moving average was higher than the 200 day moving average:

• Vanguard Total Stock Market ETF (VTI) 19 shares at $51.12 (10% of portfolio)
  
• iShares Russell 2000 Index (IWM) 26 shares @ $57.09 (15% of portfolio)
  
• Vanguard European Stock ETF (VGK) 22 shares @ $45.64 (10% of portfolio)

I use Yahoo Finance charts to look at the moving averages. Here is the chart for IWM as of 8-7-09. Click and the chart to make it bigger and notice how the 50 day moving average is higher than the 200 day moving average indicating a buy.

By the way, the 4 ETF's that the moving average investor was already invested in all had the 50 day moving average higher than the 200 day moving average indicating to stay in those ETF's. The moving average investor is now long in 7 ETFs:

• iShares Barclays Aggregate Bond (AGG)
• iShares Barclays 1-3 Year Credit Bond (CSJ)
• Vanguard Emerging Markets Stock ETF (VWO)
• Vanguard Pacific ETF (VPL)
• Vanguard Total Stock Market ETF (VTI)
• iShares Russell 2000 Index (IWM)
• Vanguard European Stock ETF (VGK)

Additional Info:
The balanced ETF portfolio being used for this experiment consists of 10 ETFs. You can view the portflio here. In this list you will notice the % of the portfolio we are targeting for each ETF.

The initial size of the portfolio was $10,044, so in buying IWM at 15% of the portfolio, that would be approximately $15,00 worth of equity. Since you can't buy partial shares, I round to the nearest hole number. In this experiment, I am not accounting for dividends, just price movement of the stock (this will keep things easier to track). Read more about the experiment here.