Passive Investing for Dummies
YP Investors is here to help anyone and everyone with our simple Investing for Dummies strategy. It is easy and successful unlike other strategies and gimmicks. There are plenty of investing/trading ideas and trends out there, but who are they really benefiting? Most of the “Hot Stocks” or suggested stocks on the TV and internet are advertised to the general public in hopes they will drive the price up. This way those who owned it can dump it off at a higher price and move to better stocks. This leaves the public with the crappy stock which they bought at a high price, not an easy way to make money or grow your wealth.
Passive Investing for Dummies: Can the Market be beaten?
Instead of picking stocks why not pick a Market ETF/fund and put your money into that and hold it? That is not bad, better than paying a mutual fund hefty fees or letting a “Financial Advisor” do the same thing but you are lucky if you make any gains after all the fees. In this article we will show you that the “buy and hold the Market method” performs is roughly 6200% worse than the sector ETF investing method aka our Investing for Dummies method.
Passive Investing for Dummies: The Sector ETF Method
What is this sector ETF Method and how good does it work? The Sector ETF method is as simple as buy and hold except you are only holding the top performing sector ETF and it performs extremely better:
There was a study performed from 1993–2011 referenced in Thomas Dorsey’s book “Point and Figure Charting” that shows different strategies: Buy and Hold, Perfect market timing, buying the best performing sector, and buying the worst performing sector. Each started with a $10,000 investment. Here are the results for using these strategies from 1993–2011:
-The Buy and Hold: $28,862.31 (5.74% Annual)
-The Perfect Market Timing: $93,507.47 (12.49% Annual)
-Buying Best performing sector: $1,797,874.18 (31.42% Annual)
-Buying the Worst Sector: $738.08 (-12.82% Annual)
This study shows the importance of owning the best sector and gives an easy strategy to implement. This year (2019) RYT, the Technology Sector ETF, has been the top sector ETF on YP Investors rankings. If you owned RYT since the beginning of 2019 you are up almost 32% in July 2019 (Just 6 months)!
Passive Investing for Dummies: The Sector ETF Strategy
How the Sector ETF Strategy works: As mentioned previously you are simply buying and holding the top Sector ETF. When a new Sector ETF becomes the top performer, then you rotate your funds out of the old Sector ETF into that new top ranked sector ETF. When rotating funds keep in mind Buy and Sell Signals on the Point and Figure Charts for both Sector ETFs. Most importantly, know which ETFs to use!
There are a few different Sector ETFs out there and the best Sector ETFs you should use are Equal Weight Sector ETFs. The reason being is that it gives a better representation of each sector since the stocks are each weighted equally. In other Sector ETFs there can be a few stocks that have the majority of the weight of the ETF and this can skew the performance.
For example, ETF A is an equal weighted ETF (all stocks have an equal percent invested) for the Technology sector. ETF B is a Technology Sector ETF but it is weighted heavy (more percentage owned) on a few stocks. Now, if those few stocks that are weighted heavy in ETF B do terrible, but the technology sector itself is performing well, then ETF B will do terrible but ETF A will perform well since the majority of Technology stocks are doing well. Thus, the equal weighted ETFs give a better representation of a Sector.
How do you know what the top performing Sector is? At YP Investors we do that work for you! We rank each sector from best to worst performing using technical analysis. Historically the laws of supply and demand have been around forever, and this is what point and figure charting and relative strength use. Both are forms of technical analysis.
We generate our rankings by comparing each sector Head-to-Head using Relative Strength and the result is plotted using Point and Figure Charting. These rankings are posted on our Top Stocks/Sector ETFs page. Additionally, for our members, we will automatically update you anytime the Sector Rankings change. This is where the easiness of this investing strategy comes in! All you have to do is buy into the top sector ETF which are ranked by YP Investors, then if the top sector ETF changes you will be automatically notified and you can sell out and buy into the new top sector ETF.
Passive Investing for Dummies is Easy and Works!
Sector ETF Investing really is one of the best passive investing strategy. It truly is investing for dummies. With YP Investors you can take all the work out of this simple strategy and automate it. Let’s say you get an email update from YP Investors that the sector rankings change and bang you instantly can change your investments into the new top ranked sector ETF. Easy as that! That is our goal at YP Investors, to simplify investing so you can grow your wealth and live the life you want!
We hope many of you use this powerful investing strategy and good luck on your investments.