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We oughtn't try to make too much of today's action.  As in other recent
days the DJIA & NASDAQ were at odds.  Although combined that's only 130
stocks, it's a significant chunk of the S&P's 500.  Interpretations
would vary, but I'd say today, "leaving the S&P in 'no-man's land'".
Volume, you ask.  Up 26%, but that's because it was a Quadruple Witching
Day, when options and futures expire.  I suppose there's a story in
prices closing down only marginally in the face of so many positions
being squared-up, but it's hard to guess what that means about the
Street's attitude.

Back on the subject of managing my mutual funds.  One thing I certainly
could do is shift the money into a brokerage account and replace my
positions with an equivalent or wider variety of Exchange Traded Funds,
ETF's.

1) With ETF's I'd avoid trading restrictions.  Trading restrictions
aren't something I see as necessarily a bad thing!  They impose more
discipline on my decision making process.  As many of us have learned,
"doing our own thing" whenever we want isn't always a good thing!

2) With ETF's I'd avoid some mutual fund fees.  That's pure smoke!  The
mutual fund management expenses come off the top in ETF's--they've still
got 'em.  The mutual fund management expenses for my current selection
of funds runs 0.27%, not a problem.  And the company that runs my mutual
funds waives my account fees.

3) Every ETF trade comes with a brokerage transaction fee.  If Buffet's
first rule of investing is "Don't Lose Money", that's money lost off the
top.  As long as I stay conservative in my mutual fund changes, they're
free.

Whether ETF's or mutual funds are cheaper depends on several factors:
the broker's fee, the mutual fund's expense ratio, the frequency of
trades, the amount of capital gains distributions.  In general for ETF's
to be cheaper you have to be willing to hold them for a long time, and
that conflicts with the idea of flipping them to get the best current
return.

4) Selection ain't that easy!  Several studies of Newsletter advisory
portfolios have shown that if one keeps the selection of the best of
them all in any year for the following year, one's results would be a
30% LOSS!

How many newsletter portfolios are there, hundreds?  What you've got are
hundreds of essentially random predictions.  One is guaranteed to be the
best of them, but which is unpredictable.  On the other hand, most
mutual fund managers are doing the same thing, and some studies suggest
they usually have trouble besting a simple index.

The fundamental problem there's NO WAY to get around is: nobody, no
analysis of the past, can predict the future!

5) On my website, see URL below, I've got a few pages that document an
investing strategy study I did several years ago when I was rolling over
a 401K.  I recommend it to you.  I found complicated strategies
sometimes work, but just as in the previous paragraph, they're not
predictable!

If there is no answer in analysis, neither is there one in strategic
complexity.  That's what I meant about not losing our objectivity.  We
need to remember to pay attention to the forest while we maintain the
trees.

No, "allocation" isn't about chasing the best returns of the past year,
quarter, month or week.  It isn't even about trying to get ahead of the
market, being waiting there when it comes to us, so we get all the gain.
It's about being diversified in ways that provide gains and buffer
losses.  And when we get a good diversification, it's about rebalancing.

 Price    Vola-    Momen-   Volume   Oscil-   Summ.
 Change   tility   tum               lator    Index
 -__+     -__+     -__+     -__+     -__+     -__+

 __|_     __     12/12
 __|_     __     12/13
 __>_     __     12/14
 _>__          12/15
 _|__          12/16

Timing Signals:  I don't use or recommend timing signals, but they're
fun to watch.  If I did though, well, I might use something like this.
(Be warned!!  It tends to whipsaw around signal points!)

Last Signal: BUY        Date:  10/31/05 S&P:    1207
Winner or Loser:  tbd                   By:     tbd

See my market tracking charts for '03-'04 and my investment strategy
study at my website(s):
http://www.xprt.net/~pgrogers/Pers.html
http://www.geocities.com/paulgrogers/Pers.html




Paul Rogers, paulgrogers{at}yahoo.com                       -o)
http://www.angelfire.com/or/paulrogers                   /\\
Rogers' Second Law: Everything you do communicates.     _\_V

... Therefore seek not to know for whom the bell tolls...
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