Investing with Exchange-Traded Funds Made Easy, A Start to Finish Plan to Reduce Costs and Achieve Higher Returns (Innbundet (stive permer))

Dr. Marvin Appel, CEO of Appel Asset Management Corporation, is a leading expert on ETF selection and active asset allocation. Together with his father, Gerald Appel (a world-famous authority on investing and technical analysis), he manages $250 million in assets. Dr. Appel also edits Systems and Forecasts, a top investment newsletter. He has been featured on CNBC, CNNfn, CBS Marketwatch.com and Forbes.com, and has presented at conferences ranging from the New York State Legislature's Consensus Economic Forecasting Conference to the American Association of Individual Investors. Dr. Appel is also coauthor of the book Beating the Market, 3 Months at a Time (FT Press, 2008).

"Possessing a rare skill set amongst professional investors and authors, Dr. Appel has successfully managed to provide readers with the perfect mix of up-to-date details on the various types and asset classes of ETFs, crucial, tried, and true concepts of risk management, and just the right mix of backing historical data to pull it all together--all in a "user-friendly" package. Upon conclusion of this book, readers will have experienced a paradigm shift in the thought process of their own current investment strategies. Taking it to the next level and actually implementing the concepts will automatically cause readers to experience a higher level of profitability and consistency; one they might never have thought possible from the utilization of concepts in just one small book." --Deron Wagner, Founder and Portfolio Manager, MorpheusTrading.com, author, Trading ETFs: Gaining An Edge With Technical Analysis "Today, exchange-traded funds are the most innovative and rapidly growing investment vehicles.Marvin Appel's new book provides, in a highly readable framework, a wealth of information on what they are and--more importantly--how private and professional investors can use them to build wealth through a simple and easy-to-implement investment program" --C. Michael Carty, Principal and Chief Investment Officer, New Millennium Advisors, LLC "In the ever-expanding complex world of ETFs, Marvin Appel has cut through all the fluff and created a one-stop guide to not only using them, but using them profitably. The sections on diversification and the use of relative strength in comparing asset classes are invaluable. Individual investors and financial advisors alike will get a significant return on investment by spending time with this book" --Bob Kargenian, CMT, President/Principal, TABR Capital Management, LLC ETFs offer exceptionally low expenses, outstanding performance, and unparalleled transparency. With more than 200 new ETFs added in just the last year, for typical investors, the choices are simply overwhelming. In this fully updated guidebook, renowned ETF expert Dr.Marvin Appel cuts through the ETF marketing hype, offering a start-to-finish plan for choosing the right ETFs--today, and for years to come. Appel reveals what ETFs can and can't do, explains why they're not all equally attractive, and shows exactly how to use them to beat the market. Drawing on objective data and proven, backtested strategies, Appel shows how to quickly move into the right ETFs at the right time, consistently staying on the winning side of major market trends. Appel starts by explaining how ETFs work, then illuminates every facet of ETF investing: quantifying risk and reward; increasing investment income; deciding when to move into cash; and much more. This book includes new chapters on commodity ETFs, using ETFs for investment income and all new coverage of emerging market ETFs. Appel also provides a clear assessment of tax-oriented ETF investing. From start to finish, this book candidly assesses risks, costs, and rewards--helping you become an informed ETF consumer, and an exceptionally effective ETF investor.*Discover what today's newest ETFs can do for you Get the real deal on commodity ETFs, emerging market ETFs, and more*Use ETFs to invest like the big players Drive down costs, and fully leverage diversification, Wall Street's only "free lunch"*Learn what your investment advisors still won't tell you The objective truth about today's ETF's: changing costs, risks, and opportunities*Build and maintain your "one-decision" portfolio--the easy way! Profitable investing has never been this simple*Derive even greater profits with proven "active" strategies Simple allocation strategies you can implement in just minutes

ETFs offer exceptionally low expenses, outstanding performance, and unparalleled transparency. With over 200 new ETFs added in just the last year, for typical investors, the variety is simply overwhelming. With this new edition one of the field's leading experts cuts through the ETF marketing hype, offering a start-to-finish plan for choosing the right ETFs, today and for years to come. Dr. Marvin Appel reveals what ETFs can and can't do, explains why they're not all equally attractive, and shows exactly how to use them to beat the market, year after year. Drawing on objective data and proven, backtested strategies, Appel shows how to quickly move into the right ETFs at the right time, consistently staying on the winning side of major market trends. Appel starts by explaining how ETFs work, then illuminates every facet of ETF investing: quantifying potential risk and reward; using ETFs to improve diversification; implementing simple 'active strategies'; deciding when to move from ETFs into cash; and much more. This book includes a full chapter on international ETF investing, as well as the most clear-headed assessment of tax-oriented ETF investing ever written. From start to finish, this book candidly assesses risks, costs, and rewards -- helping you become an informed ETF consumer, and an exceptionally effective ETF investor.

Acknowledgments xv About the author xvii Chapter 1 Exchange-Traded Funds (ETFs): Now Individuals Can Invest Like the Big Players 1 ETFs Are a Special Type of Mutual Fund 2 ETFs Avoid the Expense of Fund Managers 2 ETFs Are Traded on Exchanges 4 ETF Investors Have Hidden Costs Through the Bid-Ask Spread 7 The Creation/Redemption Process Keeps ETF Share Prices Close to the Market Value of the Underlying Shares 16 ETF Performance Is Not Weighed Down by Transaction Costs 21 ETF Shares Are Often More Tax-Efficient Than Mutual Funds 21 Special Risks of ETFs 22 Conclusion 23 Endnotes 24 Chapter 2 The Multifaceted Stock Market: A Guide to Different Investment Styles 25 The First Decision: Stocks, Bonds, or Cash 26 Size Matters 29 Each Investment Style Has Multiple ETFs 34 Conclusion 40 Endnotes 40 Chapter 3 A One-Step Strategy for Selecting Superior Investments: Indexing 43 Investments That Track Market Indexes Have Outperformed Most Mutual Funds 46 The Evidence in Favor of Indexing 47 Indexing Has Delivered Greater Profits Than the Average Mutual Fund, Except in the Small-Cap Area 49 How a Few Mutual Fund Managers Have Beaten the Indexes 50 Conclusion 52 Appendix to Chapter 3--Index Construction Methodologies 53 Endnotes 56 Chapter 4 Investment Risk: A Visit to the Dark Side 57 Drawdown--An Intuitive Measure of Investment Risk 58 A 43-Year History of Bear Markets 64 What if Your Investment Was Not Around During a Bear Market? 70 Example of Risk Assessment: An Emerging Market ETF 73 Market Risks and Planning for Your Future 77 Appendix 4A: Where to Find Quantitative Investment Risk Information 79 Appendix 4B: Calculation of Drawdown with a Spreadsheet 79 Appendix 4C: Volatility of Past Returns as a Risk Measure 83 Endnotes 86 Chapter 5 How Well Are Your Investments Really Doing? Risk-Adjusted Performance 87 The First Risk-Adjusted Performance Measure--Annual Gain-to-Drawdown Ratio 88 Another Risk-Adjusted Performance Measure--The Sharpe Ratio 91 Risk-Adjusted Performance Review 94 Conclusion 96 Appendix 5A--Calculation of the Compounded Annual Rate of Return 96 Appendix 5B--Calculation of the Sharpe Ratio 98 Endnote 101 Chapter 6 Diversification: The Only Free Lunch on Wall Street 103 Reduce Risk, Not Profits, with Diversification 104 Diversification versus Picking Only the Best 106 How to Determine What Should Be in the Optimal Portfolio 107 Example--Determining a Good Mix of Stocks and Bonds 108 Interpretation of the Sharpe Ratio 110 The Uncertainty of Future Investment Returns 110 Conclusion 113 Endnote 113 Chapter 7 The One-Decision Portfolio 115 A Risk-Reducing Investment Mix 116 Indexes Used to Test the One-Decision Portfolio 119 Performance History for the One-Decision Portfolio 119 The One-Decision Portfolio for Less Conservative Investors 123 ETFs You Can Use to Create Your Own One-Decision Portfolio 124 Rebalancing 126 Why Are Only U S Investments Included in the One-Decision Portfolio? 127 Conclusion 128 Appendix to Chapter 7--A Brief Discussion of the Bond Market 129 Endnotes 133 Chapter 8 When to Live Large: An Asset Allocation Model for Small- versus Large-Cap ETFs 135 Why Market Capitalization Matters 136 Trading Rules 138 Results 139 Real-World Implementation with ETFs 142 Conclusion 145 Appendix to Chapter 8--ETF Distributions and Taxes 146 Chapter 9 Boring Bargains or Hot Prospects? Choosing between Growth andValue ETFs 151 The Concept of Relative Strength 154 History of Relative Strength Changes between Growth and Value 156 Recognizing the Emergence of a New Trend Using the Relative Strength Ratio 161 Results with Small-Cap Value versus Growth 165 Results with Large Cap Value versus Large Cap Growth 168 Real-World Implementation with ETFs 169 Conclusion 171 Chapter 10 When Is It Safe to Drink the Water? International Investing 173 How to Identify Whether the Long-Term Trend Favors U S or Developed-Country Foreign Stocks 179 Results of Using the EAFE/S&P 500 Asset Allocation Model 182 Emerging Market ETFs--Investing for the Future 185 Outlook for International Investing 188 Conclusion 189 Chapter 11 What Bonds Can Tell You about Stocks: How to Use Interest Rates 191 A Basic Introduction to the Bond Market 192 Why Rising Interest Rates Have Usually (But Not Always) Been Bad for Stocks 193 An Indicator of Rising Interest Rates 196 Yield Curve Indicator 197 Composite Interest Rate Indicator 203 Conclusion 205 Chapter 12 It's a Jungle Out There: Selecting from Among Different ETFs with Similar Investment Objectives 207 The Drawdown Chart--A New Tool 208 Example 1--Small-Cap ETFs 211 Example 2--Growth Versus Value ETFs 214 Example 3--Utility Sector ETFs 218 Conclusion 221 Endnotes 222 Chapter 13 The Ultimate ETF Investment Program for 30 Minutes per Month 223 The Ultimate ETF Investment Program 224 Results of the Ultimate ETF Strategy 230 Conclusion 231 Chapter 14 ETF Strategies for Investment Income 237 The Ideal Income Investment--A Payout That Grows over Time 238 If You Want High Dividends, You Have to Like Financial Stocks 239 Where to Find High-Dividend ETFs 240 A Unique High-Dividend Portfolio 243 Preferred Stock ETFs 244 Conclusion 248 Chapter 15 The Hottest Investments Around: Commodity ETFs 251 Primer on Commodity Investing 254 Absentee Ownership of Precious Metals 255 Become a Futures Trader 257 A Virtual Commodity Investment 260 How to Invest in Commodity ETFs 261 The Outlook for Commodities 263 Conclusion 264 Appendix Internet Resources for ETF Investors 267 ETF Sponsor Web Sites 268 General ETF Web Sites 269 Index Provider Web Sites 270 Current and Historical Market Data Web Sites 271 Fundamental Economic Data Web Sites 272 Index 273