Knowing when to sell seems to be a more difficult decision than when to buy. Once a stock or ETF position is in place, we tend to forget about it, whereas a lot of attention is paid to the entry point. The sell decision is on my mind as I've given a lot of thought to the sell point for the Maxwell and Euclid portfolios. For investors less inclined toward technical analysis and more driven to supporting a passive approach, some selling strategy should be in place. Here are a few suggestions.
Readers following this blog know about the Tactical Asset Allocation or market timing method we are about to employ with the Maxwell and Euclid portfolios. These two portfolios were selected as they consistently lag behind the VTSMX benchmark. I want to come up with a title more original than the Faber-Richardson method so users can do a search and easily find information on what is going on with these portfolios. If this model shows promise, I will expand to the Madison and other portfolios that are trailing the VTSMX benchmark.
When I checked StockCharts for the VTI ETF this morning I noticed it is within striking distance of the 195-Day EMA. Check out this linkable StockCharts graph to see what I mean. At the end of the day I plan to check on VTI, VEU, VWO, VNQ, and RWX as these are the five ETFs used in the Maxwell and Euclid portfolios.