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Frequently Asked Questions

Dr K VIX Volatility Model
Could you please point me towards learning how to use the timing models? And a list of suggested ETFs? Basically, everything I need to know.

The VIX Volatility Model uses price/volume action of leading stocks, a dynamic list that is updated as needed, and major averages to capitalize on changes in volatility in the market. It uses regression to the mean as well as trending strategies depending on market conditions. That said, it does not require an uptrending or downtrending market to be profitable.

1) Read through the Market Timing Results page if you plan to put part of your investment portfolio into market timing: http://www.virtueofselfishinvesting.com/market-timing-results which covers both the VIX Volatility Model (VVM) and Market Direction Model (MDM).There are links that will guide you to understanding the strengths and weaknesses of the strategies.

2) Read through any of our VIX Volatility Model and Market Direction Model FAQs that may be of interest to you. You can also read up on various topics by typing in keywords into the search bar: https://www.virtueofselfishinvesting.com/faqs 

3) In the archived reports section https://www.virtueofselfishinvesting.com/reports, you will notice a list of suggested ETFs is given whenever either model switches to a buy or sell signal.

In the case of the VVM, your choice of ETF depends on how much leverage you wish to take. For sell signals, you can choose between 0.5x and 1x ETFs. For buy signals, you can choose between 1x and 2x ETFs.

In the case of MDM, we typically provide 1x, 2x, and 3x ETF choices. The types of ETFs can vary though we usually focus on the tallest standing midget which has been the US market these past many years (as of this writing 3-17-17). Thus our ETF selection has typically been focused on S&P 500, NASDAQ Composite, and sometimes technology-related ETFs such as S&P Technology Select. That said, there is nothing wrong with stepping outside our ETF suggestions and buying something different provided you can see that your choice of ETF correlates to a high degree with our choice.

Always understand the risks involved in your choice of ETF so you can position size appropriately. You may also wish to take partial profits at certain points. Your risk tolerance level may be greater or less than that of either model thus you may wish to adjust your position size accordingly.

Published: Mar 17 2017, Modified: Mar 18 2017