MUTUAL FUND ARTICLES BY ULLI G. NIEMANN
Articles for Free publication in your Newsletter or on your
Website
No Load Mutual Funds: Investment
Hype vs. Investment Help
By Ulli G. Niemann
With the internet such a huge part of our daily lives,
many investors have access to a wide range of instant investment
information.
Whether you're into stocks, bonds, mutual funds, futures
or options, there are tons of electronic investment newsletters
offering to turn your small stake into a giant fortune. All
you need to do is subscribe and watch your portfolio soar.
Yeah, right!
As a practicing investment advisor specializing in no load
mutual funds, I have received my share of e-mails from disillusioned
subscribers wanting to know how to better evaluate newsletter
services.
While there are no absolutes, I can give you a few pointers
that might help you make a better decision:
1. Stay away from the most obvious hype. Ads promising to
turn your $10,000 into $1 million in 2 years by buying this
incredible stock or hot commodity are not promoting investing - they
are selling gambling. Follow the "If it sounds too good
to be true, it usually is" rule.
2. Most mutual fund newsletters won't make those outlandish
claims, but some of them are still pushing the truth as far
as they can. So try to get a free issue or two to examine.
If you can't get a sample, check if they have a trial period?
How about a money back guarantee? If not, pay with your credit
card. These days you're pretty well protected by this payment
method even if the newsletter doesn't offer a satisfaction
guarantee.
3. Consider the editor as well as the disclaimer notes.
Is he or she only publishing a newsletter? Or is he also
an investment advisor with a practice?
Why would that last point matter? I may be biased, but I
believe that you get far better advice from a writer who
also is in the trenches every day investing their own as
well as their clients' portfolios. They would have far better
insights as to what works and what doesn't than someone who
has the theory down but no practical experience.
4. Look at the investment recommendations. Are they suggesting
you buy into a certain orientation such as mid cap, small
cap or large value? Or are they picking specific investments
based on a variety of technical indicators?
In my no-load mutual fund practice I use specific recommendations,
even for my free newsletter subscribers. They are first based
on my trend tracking indicator giving us the green light
and secondarily on the selection of mutual funds based on
momentum analysis.
The more specific the recommendations, the better, because
that allows you to follow along either just on paper (which
you should do at first) or with your actual portfolio.
5. Are they recommending when to sell a mutual fund either
because of gains or to limit your losses? This to me is the
most important issue. If there is no plan in place for getting
out, how will you ever know when to sell? This has been the
greatest downfall of most publishers (and investors!) since
the bear market of 2000 - not selling even if market conditions
dictate it would be in your best interest to do so.
The advice of most newsletter services can make you money
in bull markets. However, with the continuation of the bear
market still a distinct possibility, be sure to look at any
newsletter's investment advice record since 2000.
For many people investing is an emotional issue. The pendulum
swings between fear of loss and greed for greater returns.
If a complete methodology for buying and selling is offered
in a newsletter, such as one I advocate, be sure that it
fits your emotional make up.
There is no sense in following an investment approach, which
may have merits, if it means sleepless nights for you. You
won't stick with it for the long term - and long-term investing
is essential for making your portfolio grow and prosper.
So, the bottom line is to look for a newsletter that:
