Buying The Hot ETF's In The New Year?

Here is a completely different approach than the "Bargain Hunting" approach. It advocates buying the strongest indexes (Excludes Sector Funds) in the New Year.

"When it comes to investing in exchange-traded funds, buying last year's best performing ETF at the start of each and every New Year turns out to be a stellar strategy. The concept is so simple: buy whichever diversified ETF performed best in the previous year and, in the words of Bachman Turner Overdrive, 'Let it ride.'

The rewards, as demonstrated since January 2001 (where there were enough ETFs in existence to start tracking this strategy), are nothing short of eye-popping. But before I get to the strategy's details, and before I countdown to my Hot Hand ETF For 2005, let me throw a monkey wrench into my machinations.

While this strategy does reveal a healthy trend, the data only goes back four years; hardly long term. Also, I do not advocate sinking your entire stash into it. "

Jim Lowell: January surprise: A diversified ETF strategy