New ETFs are now trading....

wallmann

Junior member
17 0
Bank of New York has launched some new ETF's which are tradable on the American exchange and are based upon a family of treasuries. They have the nickname FITR's .

Of course there are "bond funds" and we have used them in our portfolios for years. When bonds are outperforming the stock market, being in the right bond fund lets you capture some very nice returns. But, like most funds there are problems. You can't short them, and worse, you can't buy in and out during the trading day. So, if a significant move is made, you have to wait for the close of business to either sell out or buy into your funds.

ETF's don't play that way. Just like "sector" ETF's for say the chips or the banks or the biotechs, these new ETF's are designed to follow the movements of 1,2 5 , and 10 year treasury notes. So what's exciting about that? Since they are an ETF, they can be bought or shorted at any time of the day. This is great because sometimes bonds have a big up or down day and by utilizing the ETF, you can hop aboard a move (up or down) and capitalize on the change of prices.

These things are really new and were listed 11/01/02, so it's impossible to say how they are going to work. But we suggest that once people get the idea that they can "trade" treasury notes without the hassle of being in a bond fund, they are going to do quite well. We do not recommend playing with them just yet. When they have been around for a bit, we will do a thorough examination of them.

For now the symbols of the ETFS are TTE ,TFT, TFI, TOU

P.S.

The overall trend of a stock should be apparent from its price chart. It does not take long to determine if the most recent trend has been up or down and remember, most are not even, they usually follow a stair step pattern. If you see a recurring pattern of higher highs broken by recurring dips this is usually a bullish sign and if you notice ever-lower lows with lower highs on the bounces, it is usually a bearish sign. And look at the chart from different time frames, we usually start with a 3 year chart and then go to a 2 and/or 1 year, then 6 months, 3 months and then a one-month chart to get a better feel for the stock.
 
 
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