12/12/2003 Nancy:

Q: Ulli, with the current mutual fund scandal it appears that small investors are getting the short end of the stick again by having to pay more and higher short-term redemption fees. How do you handle that?

A: Nancy that has been the unfortunate byproduct of illegal trading activities of some mutual fund families. I'm trying to either use more ETFs in the future and/or locate those no-load funds with what I consider "reasonable" redemption fees. What is reasonable? The reason behind those fees is to discourage quick in and out trading. A charge of 1% for funds redeemed within 30 days I would consider reasonable and that should not affect our methodology. A 2% charge for funds redeemed within 180 days is excessive and I would not consider such a fund. You don't think they exist? Check out MEMEX, for example.

12/5/2003 Ben:

Q: I understand that Charles Schwab & Co, is the custodian for your managed account clients. Can you tell me what their short-term redemption fees for mutual funds are?

A: Of course, Ben. Schwab, like all other brokerage firms, has a short-term redemption fee for any mutual fund which is bought and sold within a 90-day period. The fee is 0.6% of the principal amount, subject to a $39 minimum and a $199 maximum. In other words, if we were to sell a fund within 90 days the fee would be limited to $199 whether the redeemed amount is $40,000 or $800,000.  Here's a point of interest: As an advisor, buying the same funds as my clients, I'm obligated to pay the same fees. No exception.

11/28/2003 John:

Q: Can your approach also be used and an account set up for managing the assets of a Foundation?

A: Yes, John. I can manage the assets for Foundations as well, as long as the fall into these categories: Trust, Organization or tax-exempt Organization.

11/21/2003 Les:

Q: I've been following your recommendations for a while and I thank you for your quality service. Can I use your methodology also in conjunction with my variable annuity investments?

A: Sure, Les. At this point, however, I'm only tracking the variable annuities available through Charles Schwab/Great Western. I haven't published them in my weekly StatSheet yet but will do so if there is a greater demand. If you have your annuities some place else you may try to get daily pricing data directly from the company.

11/14/2003 Mike:

Q: I understand the selling of any fund which declines 7% or more to manage risk. When does your trend tracker go into effect by signaling a sell when it breaks below its trend line?

A: Mike, whichever one occurs first. If the markets were to decline from here most likely the 7% rule will apply first. However, if we stay in the market a while longer the trend tracker index (green line) and the trend line itself (red) will move closer together. In other words, the longer we stay invested the less it will take for us to sell. If that occurs we will sell our positions before the 7% level has been reached. Look at the domestic chart on the StatSheet for clarification.

11/7/2003 Scott:

Q: I live offshore in Thailand my place of birth is the UK. Can I still use your service?

A: Scott, you sure can. I have several international accounts and while there is a little more paperwork involved to set up the account, I can invest your monies as per my methodology. One difference though. International accounts are not allowed to invest in mutual funds. In order to follow my approach we simply use ETFs, which will give us the same results.

10/31/2003 Lee:

Q: I am intrigued by your approach and I want to know how you help people establish a mix of funds appropriate to their stage in life. I am 55 and 3- 4 years away from retirement. What do you advise for someone is willing to take only a moderate risk? Right now I am into ETF's but also have a number of no-load mutual funds. Suggestions?

A: Lee, if you've been following my approach you know that I advocate a disciplined method for getting into and out of the markets. That would automatically exclude the buy & hold approach, which I've written extensively about. Therefore I can't recommend a mix of funds for all times. To me it's a sure thing for financial disaster. I would suggest that, if you can, follow my approach using my weekly StatSheet and the selected funds, or you can have your portfolio managed by us. But please, don't repeat the mistake millions of investors made over the past few years by holding on to mutual funds or ETFs, which should have been sold a long time ago.

10/24/2003 Andreas:

A note from reader Andreas: Q: Thanks for preparing this great newsletter. Since I am living and investing in Europe, I would be interested to know if you are also preparing Mutual Fund Indicators for the European equity and bond markets or for other markets, such as Asia or emerging markets.

A: While most of our investments will be in U.S. domestic equity funds, I also follow International Funds, Emerging Growth and Bond Funds, International Bond Funds, Asia - excluding Japan funds as well as Diversified Pacific Funds. I will take positions in those arenas as circumstances warrant. This year all of those markets have pretty much followed the U.S. and I have preferred domestic equities over those in emerging markets.

10/17/2003 Andrew:

Q: Ulli, I'm planning on rolling over my 401k into an IRA. Should I use a 'rollover' or 'contributory' IRA?

A: In regards to your investment choices there is no difference. You should use a rollover if you believe that eventually you'd like to roll it back into a 401k with another employer. There's only one benefit to it, and that is that you can borrow against it, if your new 401k has a loan provision.

10/3/2003 Willow:

Q: Ulli, I read (somewhere - it's been a while ago and I don't remember where I read this now) that Elf's (Exchange Traded Funds) were doing much worse than mutual funds or stocks, comparatively, so I have avoided them.  I don't remember the details of this article now, but it sounded like ETFs were good things to stay away from.

A: Willow, it all depends on who wrote about it. There are no commissions involved, so most brokers and financial planners don't promote them and it wouldn't surprise me if they talk negative about them. Here's a real life comparison. During our most recent Buy cycle from 4/29/03 to 10/3/03 our top 4 mutual funds averaged a +22.54% return as compared to our 4 ETFs with +22.62%. That is a dead heat! Again, using an ETF or a mutual fund is not as important as determining the proper time to buy and sell them. See the above link to my article on ETFs.