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5 Aggressive ETF Trades to Make Before 2014

Let the bull loose on financials, Big Tech and more

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As we approach the end of the year, I found myself with some discretionary investing funds. I decided to try to an experiment, based on three factors that I believe will bias the market higher over the next 45 days or so.

  1. 20132014YearEnd185Most major indices are at all-time highs (the Nasdaq being one exception, though it’s making its own headway into multiyear highs). Stocks and indices that hit all-time highs on decent volume, such as we’ve seen, often continue to make new highs. They’ll retrace here and there, but overall the bias is higher.
  2. Second, the market traditionally moves higher in November and December. November and April share dibs as the year’s second-best month, performance-wise; the S&P 500 has gained 1.5% on average since 1950. December is the best month, adding 1.7%.
  3. Third, quantitative easing continues unabated. That means money will continue to flow out of the bond market and into stocks.

So I purchased five aggressive ETFs with the intent to sell sometime in January, maybe as late as Jan. 31, and I suggest you do the same.

However — and this is a big “however” — I also set a 6% stop-loss on the entire basket. I want to make it clear that this stop loss is essential with this strategy. The volatile nature of these leveraged ETFs means there is a lot of risk, and stop-losses should always be used in these circumstances (and even when you buy other stocks).

But if you’re willing to be aggressive, take a closer look at these five trades to make before the year is out:

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