David Vomund, author of ETF Trading Strategies Revealed and Exchange Traded Profits: Cashing in on New ETF Trading Methods, is featured in this month's issue of Technical Analysis of Stocks & Commodities.
David is the president of Vomund Investment Management, an investment advisory company that specializes in managing exchange traded fund (ETF) portfolios. While other advisory firms are only now discovering ETFs, Vomund’s firm has an exceptional nine-year track record of ETF trading. With more than 20 years of investment and portfolio management experience, he is a frequent speaker at national investment conferences as well as the publisher of VIS Alert.com, a weekly newsletter that covers market timing, ETF rotation, and stock selection.
A short excerpt from his interview with Stocks & Commodities:
S&C: What led to your interest in exchange traded funds?
DV: We have to learn from every bear market so that mistakes are not repeated. I learned from the 2000–03 bear market that you need to be flexible in the type of analysis that you use. For example, growth investors did very well in the 1990s, but then value investors fared better in the early 2000s. Along the same lines, the large-cap stocks in the NASDAQ 100 performed best in the 1990s, but small-cap stocks performed best in the early 2000s.
ETFs gave me the flexibility to employ whatever style of investing was in favor at the time.As market conditions change, your trading style will move into and out of favor. We have to be flexible, but that is easier said than done. It is hard for a growth investor to employ a value strategy, and it is hard for a value investor to employ a growth strategy.
I am a growth investor so it goes against my nature to buy undervalued, high-yielding value stocks. That’s where ETFs come in. Instead of forcing myself to become a value investor when growth investing is out of favor, I can just buy a value ETF.
So in 2003 I began a managed account program that used mechanical strategy to, in effect, jump around the Morningstar box. If large-cap value stocks are leading, then I’ll own a large-cap value ETF. If small-cap growth stocks are in favor, then I’ll buy a small-cap growth ETF.
ETFs gave me the flexibility to employ whatever style of investing was in favor at the time. Nearly 10 years later, the portfolios, after all the fees, have almost doubled in value.
To read the full article, click here!