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WEEKLY STATISTICS

FOR OUR NO-LOAD MUTUAL FUND AND ETF INVESTMENT PLANS

As of Thursday, July 23, 2009

By Ulli G. Niemann

 

 

 

 

IN THIS ISSUE:

 

1. General Domestic Equity Mutual Funds/ETFs — BUY BUY

2. Domestic Equity Funds by Family — BUY

3. Exchange Traded Funds Master List

4. Domestic Exchange Traded Funds (ETFs) —  BUY

5. International Equity Mutual Funds/ETFs —  BUY

6. Country ETFs —  SELECTIVE BUY

7. The SimpleHedge Strategy  BUY

8. Sector Fund Investing (ETFs)    SELECTIVE BUY

9. Sector Fund Investing (Mutual Funds)     SELECTIVE BUY

10. Bond & Dividend paying ETFs —  SELECTIVE BUY

11. Bear Market Funds — SELL

12. 401(k) Funds (domestic) —  BUY

13. New Subscriber Info

 

 

Weekly Market Comment:


Up, up and away; the bulls feasted on good news and less than expected bad news to drive the major indexes higher.      

 

 

Are you interested in reading my possibly politically incorrect ruminations about the market?

 

I have set up a blog, aptly named “The Wall Street Bully,” which will be updated during the week. It gives you the opportunity to post comments and continue the dialog. Take a look at it:

 

http://thewallstreetbully.blogspot.com/

 

If you have a newsreader, you can subscribe to it and new updates will be delivered to you automatically. Alternatively, you can set this link up in your ‘Favorites’ folder and check at your convenience. This is a free service, so please tell some of your friends.

 

 

GLOSSARY OF TERMS USED:

 

1. 4Wk, 8Wk, 12Wk and YTD refer to how these funds have performed or “appreciated” during these various time periods.

 

2. %M/A (39-week Simple Moving Average) shows how far above or below its long-term trend line a fund/ETF is currently positioned.

 

3. “From 6/3/09” shows a fund’s performance since the date a new domestic Buy Cycle started. “From 5/11/09” shows a fund’s performance since the date we bought our International positions.

 

4. DD% (DrawDown percentage) measures the drop from a fund’s high to its current price during the past year. A fund that shows

0.00% has just made a new high. That’s good news because it confirms that it is moving up given current economic conditions.

It is therefore in tune with market momentum.

 

Conversely, a fund with a large negative DD% number is a lagging performer and should not be purchased at this time.

 

5. MaxDD% (Maximum DrawDown percentage) is not shown in these tables, but you will find me mention it quite frequently.

 

If you were to go back 365 days and measure DD% for a given fund every trading day, and then select the worst (largest) DrawDown

number, you would have the information that I call MaxDD% (Maximum DrawDown Percentage).

 

This allows me to look back at anytime and see which funds have held up best and never hit our 7% sell stop. Those are the ones with

a low MaxDD% (low volatility) number and may be among my primary selections for the next Buy cycle.

 

6. M-Index (Momentum Index) shows the average non-weighted momentum ranking of a fund or ETF. The average is calculated from the existing 4wk, 8wk, 12wk and YTD momentum numbers. The higher the number, the more upside momentum a fund has. However, volatility is increased at the same time. If you’re conservative, drop down a few numbers from the top of the ranking food chain.

 

The use of the M-Index was announced in my blog post at:

 

http://thewallstreetbully.blogspot.com/2007/08/introducing-m-index-major-upgrade-to-no.html

 

 

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY— since 6/3/2009

                                                                                        

 

 

 

 

As announced via a blog post, on 6/2/2009, the TTI triggered a buy signal with an effective date of 6/3/2009. We have increased various hedge and outright long positions for this cycle. Due to the close proximity of the TTI to its trend line, we will use the 7% trailing stop loss of our positions as an exit point and not the crossing of the trend line to the downside. Once the TTI has crossed further to the upside, I will adjust the exit strategy.

 

As of today, our Trend Tracking Index (TTI—green line in above chart) has broken above its long term trend line (red) by +4.70%.

 

Please note the addition of the blue short-term trend line, which will be used in section 7 for my hedge strategy.

 

 

The link below shows the top 100 domestic funds (out of 674) and the sorting order is by M-Index ranking. Prices in all linked tables are updated through 7/23/2009, unless otherwise noted. Price data not yet available at publication is indicated with 00.00% or -100.00%.

 

Please note, that I only track no-load, no transaction fee or ‘load waived’ funds, which are available to me through my custodian Charles Schwab & Co. Since all brokers and custodians have different policies you need to check with yours first, before placing any trades, as to no load availability and any charges or fees involved. 

 

I have identified those funds, which are available to me as “load waived” funds or “advisor only” funds, with an asterisk before their names. While this may not apply to all brokerage firms, it should allow you to quickly locate those which are truly no load.

 

Once the next Buy signal is generated, you can use the tables in the links below to make your selections:

                       

http://www.successful-investment.com/SSTables/DomFundsTop100_072309.pdf

 

 

TIP: Don’t forget to check the 401k funds in section 12 as well, since many of them are available for all types of investment accounts at different brokerage houses.

 

 

2. DOMESTIC FUNDS BY FAMILY: American Century, Fidelity, Vanguard, ProFunds, Rydex, T. Rowe Price — BUY

 

http://www.successful-investment.com/SSTables/DomFFs072309.pdf

 

 

3. EXCHANGE TRADED FUNDS MASTER LIST

 

As per request, I have added this ETF Master list so that you can quickly compare various ETFs without having to reference other tables. The ETFs listed in the table (476) consist of the following orientations: Domestic, International, Country, Sector and Specialty. Momentum figures for all ETFs are not adjusted for dividends.

 

Please note that I have moved all bear market ETFs to section 11, where they are listed alongside the bear market mutual funds.

 

http://www.successful-investment.com/SSTables/ETFMaster072309.pdf

 

 

4. DOMESTIC EXCHANGE TRADED FUNDS (ETFs): BUY

 

ETFs are an excellent alternative to No Load Mutual Funds. They are a valid choice to high mutual fund management fees, restrictive trading and redemption charges, which have been a problem for years.

 

If you’re not sure how to use ETFs please read my FREE article about their pros and cons, which you may view anytime at:

 

http://www.successful-investment.com/articles24.htm

 

 

All the same Buy and Sell rules apply for domestic ETFs as they do for domestic equity mutual funds in section 1.

 

http://www.successful-investment.com/SSTables/DomETFs072309.pdf

 

 

5. INTERNATIONAL EQUITY MUTUAL FUNDS/ETFs: BUY — since 5/11/2009

 

Last Cycle from 9/5/2007 – 11/13/2007

                                                                                                                                                 

 

 

 

On May 8, 2009, the International Index broke clearly above its trend line generating a Buy signal effective Monday, May 11, 2009. Since we can never be sure if this push above the trend line has legs or not, we will use our 7% trailing stop loss discipline as our exit point, should the markets head lower again. Currently, the international TTI is positioned +14.48% above its trend line.

 

The listings in the link below represent some of my choices of the international funds I track to be used when the next Buy signal occurs. Please note that I have added Vanguard, Fidelity, T. Rowe Price, Rydex/ProFunds and American Century Funds. They are sorted by M-Index ranking:

 

http://www.successful-investment.com/SSTables/InternFunds072309.pdf

 

 

Be advised that many international funds may not be available to you since they carry a load. However, while I am able to purchase these for my managed account clients as ‘load waived’ funds, this doesn’t help you much, if you do your own investing. This is why I have included some appropriate ETFs in the above list.

 

 

6. COUNTRY ETFs: SELECTIVE BUY

 

While I believe that the United States is the greatest country in the world to live in, it is not necessarily always the best, or only one, to invest in.

 

This addition to my newsletter will allow us to also invest selectively in countries with better performing stock markets. With the proliferation of ETFs over the past years, we are now able to invest in a variety of countries using low cost index ETFs.

 

The chart shows the China Index as an example:

 

 

 

 

The link contains a list of various countries/regions, which I am tracking weekly. Please note that data in this table does not include adjustments due to distributions.

 

http://www.successful-investment.com/SSTables/CountryETFs072309.pdf

 

As you witnessed during the last couple of years, country funds can be volatile and the use of a trailing stop loss (I use 10%) is imperative to protect your portfolio from severe downside moves.

 

 

7. THE SimpleHedge STRATEGY: BUY

 

This section is a continuation of my recently published e-book on hedging for the mutual fund/ETF investor. If you have not read it, please download your copy at: http://www.successful-investment.com/SimpleHedge-v1.pdf

 

One of the first rules for putting on a hedge is that the domestic TTI (green) crosses the short-term trend line (blue) to the upside. This happened on March 19, 2009. Please see chart in section 1.

 

As announced, I have added a hedge position for clients using about 20% of portfolio value. My existing hedge, which was set up on 12/31/2008 is now showing the following performance updated through 3/3/2009:

 

 

 

 

As you can see, the unrealized gain was +3.91%. On 3/3/2009, I had to rebalance (as described in my e-book) since, due to market conditions, the hedge had become lopsided in favor of the short position by 61% to 39%.

 

After rebalancing, the performance from 3/3/2009 to 4/6/2009 now looks as follows:

 

 

 

 

For that period, the hedge shows a total unrealized gain of +1.84%. I will continue to update this table every week.

 

After rebalancing, the performance from 4/6/2009 to 7/23/2009 now looks as follows:

 

 

 

 

 

8. SECTOR FUND INVESTING (ETFs): SELECTIVE BUY

 

To diversify our portfolios, we always need to look for different opportunities to invest our money. The table of sector fund listings (ETFs) in the following link covers a broad spectrum of possibilities. The sorting order is by M-Index:

 

http://www.successful-investment.com/SSTables/SectorETFs072309.pdf

 

I personally invest no more than 10% of portfolio value in any one sector and use a 10% trailing stop loss to minimize the risk.

 

 

9. SECTOR FUND INVESTING (Mutual Funds): SELECTIVE BUY

 

If you prefer using Fidelity’s wide variety of excellent sector funds, you will like this new addition. Here as well, sectors can be volatile, and I advise the use of a sell stop just as we do with ETFs.

 

The sorting order is by M-Index:

 

http://www.successful-investment.com/SSTables/SectorMFs072309.pdf

 

 

10. BOND & DIVIDEND ETFs: SELECTIVE BUY

 

If you prefer using ETFs for the generation of income, here’s a list of bond and dividend paying ETFs. It’s important to first look at how theses instruments have held up in terms of momentum figures. Then you should visit your favorite financial web site to examine yield and other details.

 

http://www.successful-investment.com/SSTables/Bond_DivETFs072309.pdf

 

 

11. BEAR MARKET FUNDS: SELL

   

 

                         

 

 

 

The above indicator represents our Short Fund Composite (SFC) to be used as a trend indicator for Bear Market Funds.

 

The SFC has broken below its long-term trend line by -29.70%, which means a Buy will not occur until the trend line is broken to the upside again.

 

Below are the most commonly available bear market funds/ETFs and their momentum figures:

 

http://www.successful-investment.com/SSTables/BearFunds072309.pdf

 

Please note that some of the above funds try to outperform the index they are tied to by the percentage stated. While this can enhance your returns it can certainly accelerate your losses as well. No matter which way you choose, be sure to work with a trailing sell stop and be aware that volatility will be your constant companion.

 

 

12. 401(k) FUNDS (domestic): BUY

 

The list (featured in the link below) displays commonly held 401(k) domestic equity mutual funds showing their latest momentum figures to go along with the Buy and Sell signals of the TTI in section 1. The same stop loss rules apply here as well.

 

Since fund choices are limited in any 401k plan, be sure to roll your assets into an IRA if you leave your job. Let me know if you need help with that.

 

In the meantime, however, you can benefit greatly by at least not buying the worst fund at the wrong time. If you follow our plan, you will never again buy one of those highly volatile sector funds, when you really should be out of the market altogether.

 

The sorting order is now also by M-Index.

 

http://www.successful-investment.com/SSTables/401k072309.pdf

 

 

13. New Subscriber Information

 

To get you a head start on more successful investing, please click on:

 

http://www.successful-investment.com/newsletter/How_to_use.pdf

 

and download our “How to use” information sheet and last year’s “Buy Signal” information:

 

http://www.successful-investment.com/weekly/BuySignal042803.pdf

 

Also, my daily blog posts at http://thewallstreetbully.blogspot.com/ should help you to become more familiar with my approach as well as our Investment Policy Statement at: http://www.successful-investment.com/InvPolicyStatement.pdf

                                                                                                                                                                   

If you still need some guidance, feel free to contact me.

 

 

 

 

Special Notes:

 

1. I have taken great care in selecting only mutual funds with no loads and no redemption fees. However, policies vary from one brokerage house to another. Before placing any trade, make sure to verify with your broker or custodian as to any charges and fees involved.

 

2. Be aware that, because of the mutual fund scandals, some fund families have added early redemption fees. While some are reasonable (30 days), others are ridiculous by trying to tie up the individual investor for 180 days, or you’re being charged a 2% fee to opt out early. Be sure to check first before placing any order.

 

3. Should there be a sudden change in investment positions, I will post a notice at my blog.

 

If you are interested in having your portfolio professionally managed using our methodology, feel free to contact me directly or visit our website http://www.successful-investment.com/money_management.htm for more information.

 

My e-mail is ulli@successful-investment.com and my phone is 714.841.5804

 

Until next week.

 

Ulli…

 

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Ulli G. Niemann

Registered Investment Advisor

714.841.5804

18685 A-Main Street #606

Huntington Beach, CA 92648

www.successful-investment.com

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Ulli G. Niemann is a registered investment advisor pursuant to the California Department of Corporations. The information presented herein is for informational purposes only and does not constitute an offer to sell securities or investment advisory services. Such an offer can only be made in those states we have established a "notice-filing" status or where an exemption from notification is currently available under the de minimis exemption rule.

The investment advisor is an independent advisor and receives no compensation from any corporations, brokerage houses, organizations or special interest groups by making recommendations to purchase any of the investment products used. The advisor is a fee-only advisor and receives no commissions for client trades.