Buy and Hold vs. Moving Average ETF Investing 5-7-10

What a terrible week. I for one was glad for the week to end. The S&P 500 dropped over 77 points and closed at 1,110.88. It was back in early March that we last last saw this level. At one point on Thursday, the Dow was down over 950 points. When panic sets in, its like watching a train wreck.

So what does it mean for our Buy and Hold and Moving Average ETF Investors? For Buy and Hold it means nothing more than a buying opportunity. For the Moving Average Investor who is more willing to sell ETFs, a sharp down-turn is just bad news. A moving average strategy like the one we use (50 day/200 day) is a longer term strategy and will not be effective in big moves down like this past week. Keep in mind that we are focused on ETF investing and not trading here are ETF Newsletter.

The buy and hold ETF investor lost $1068 (very painful) in the balanced ETF portfolio. His total portfolio balance is now at $14,953 and the total gain is down to 48.9% since we starting tracking this portfolio in March of 2009.

The moving average ETF investor lost about $728 for the week. His portfolio is now valued at $10,899 (same balanced portfolio). He has gained 8.5% for the same time period.

The most recent 12 weeks are shown below: