The second approach uses equal investments in selected ETFs for repeated bounces in their stock prices. One buys a certain amount of an ETF and then picks a review interval, for instance weekly or monthly, and when the asset in question has gone down more than 5% since the last transaction, the investor buys more, continuing in this way, whether once, ten times, or whatever, till the ETF has gone up by more than 5% above the initial purchase price, at which point all shares of that asset are sold. In the interim, one just waits till the next time the asset is down over 5% from the last transaction price, buys it again, etc.
The greater the frequency of the security's swings, the better, so long as there is reason for confidence that it will sooner or later, preferably sooner, be up enough to be sold once again. In most cases, there can be more confidence of this sort with exchange traded funds than is true for individual stocks (for which bad news can be ruinous). With the ETFs cited above, this strategy seems likely to be especially efficacious for IJH and QQQ, since they have tended to trade up and down multiple times in a year. With QQQ, for instance, there is often a quarterly drop after the asset is ex-dividend. Then the price rises more than 5% before the next such regular drop. (While that happy pattern has been true for awhile, there is no guarantee it will persist in future.)
If one gets an average net 5% gain four times a year, that works out to about a 21% return, not counting any dividends. More so than not, though, when an asset's price is noticed to be up enough to sell, it averages a little higher than the over 5% minimum for a sale. If that average net gain per round trip (a buy followed by a sale of the same shares) is, say, 7%, and occurs four or more times a year, the annualized performance works out to over 31%.
This is potentially the riskiest of the three approaches considered here, however, for one can never tell in advance how long the asset may go down before it heads back up enough to sell. Thus, it is helpful to keep one's investment amounts relatively low and one's initial cash reserves high. Later, once profitable sales have increased cash reserves further, it is possible to more safely raise per investment amounts.