Ever since the subprime debacle started in 2007 I have been using the following strategy with VWEHX: when the NAV goes down five consecutive days I get out. If it goes up five consecutive days I get back in. If Frisdon says it is going down to $4.27 why stay in and lose the principal? I don't like playing a bond fund this way but the market is nuts right now.
Let's all keep in mind that if you look at 1, 6, 12 month charts comparing this funds performance with the Dow Jones you will see that we are actually faring extremely well. This not a good flipping play, it is a buy and hold. There are plenty of flipping opportunities out there. Not buy and hold forever and never look at it but as long as the dividends are being paid regularly it is a better place to park money than a CD or a money market. Don't be lured into selling becuase a few people are panicking. At least that is my strategy.
Yes, as niterunner says, HY is a very "trend persistent asset class" so perhaps trading is the way to go especially in this environment. But you may never get your buy signal and yet the fund may do modestly well. For example, if we end the year at 4.27 but we never have a series of up days those holding the fund will actually make about 5% from here while you are on the sideline. And what about a case where the Fed announces a program to buy corporate debt to lower risk spreads and dampen down BKs? (A very real possibility). We could jump 2-5% in a day.
I guess I am in both camps: holding a core position and trading around it.