9/10/2004 Brij:

Q: Ulli, I have an account with Ameritrade and I would like to buy and sell myself. Can you suggest funds/ETFs that I can buy and forget for long period of time rather than have to buy and sell?

A: Brij, absolutely not! There is no such investment you can 'buy and forget' with maybe the exception of your home. This is what my site is all about; to get people away from the mindless buy & hold proposition, which has ruined a lot of portfolios over the past few years. I know that this is not what you wanted to hear, but it's my opinion.

9/3/2004 Judy:

Q: You refer to the "Trend Tracking Index" in your newsletter. Is this an index that I can view online?

A: Judy, I designed the Trend Tracking Index (TTI) back in the 80s and its composition is proprietary. It has been my major guide to determine market direction.

The TTI has been invaluable in getting us into the market and, more importantly, helped us sidestep most of the devastating bear market of 2000. The only way you can track it is via my publications.

8/27/2004 Steve:

Q: Ulli, the Charles Schwab & Co website states there is a redemption fee for any fund held for less than 180 days from their Mutual Fund OneSource service (no-load, no transaction fee funds). Does this apply to your managed accounts as well?

A: Steve, retails investors have a 180 day redemption period, while managed accounts via advisors have only 90 days.

With our long-term approach to investing we get charged very rarely, but the possibility exists. Those fees range from a min. of $39 to a max. of $199. For my personal account, I'm being charged those fees as well.

8/20/2004 John:

Q: Ulli, I noticed that out of all the potential funds on your Buy list last week, only 5 would be available and free through Fidelity. Half of the rest would cost a flat $75 a piece to buy and sell. Any thoughts?

A: John, do not worry about the current fund choices on my list. They will change dramatically by the time we receive the actual next Buy. The reason for listing them now is that I want my readers to see how market behavior affects those funds. Some are holding steady while others are losing steam and moving off the top 25 list. However, be advised that these are the ones which are available to me as 'no fee' and 'no load'
through my custodian.

When the time comes, and you still need to have more choices, I will most likely enlarge the list just prior to the Buy signal becoming effective.

8/13/2004 Marco:

Q: Ulli, you indicated that you currently are 100% in Money Market Funds. Are there really no better alternatives, e.g. Municipal Bonds or other alternatives?

A: Marco, once we are in money market we don't want to have any "market risk." It doesn't pay to chase pennies and miss out on dollars. It is not sensible to me to possibly have to sell a bond fund after a few weeks at a loss simply because we get a Buy signal in equities.

We're better off being safely on the sidelines knowing that our time will come. How long will we stay out? Depends on market behavior. Usually the markets are in an up trend 80% of the time, although this certainly hasn't been the case in the past 5 years.

Bottom line, we will stay out as long as it takes to safely take a position again. These days this could very well be on the short side. I'll advise my readers in my weekly updates.

8/6/2004 Alicia:

Q: This maybe a silly question, but when following your recommendations, would you say that your Buy signals are as important as your Sell signals, or do you see one as more crucial than the other? I appreciate your comment and thank you for your great free weekly newsletter.

A: Alicia, that is actually a very good question. From my experience, I have seen that the Sell signals are actually more important to your financial health than the Buy signals. Why? Let's say your portfolio is in money market and you decide not to follow through on a given Buy recommendation. Well, you really haven't lost anything, you're just maintaining your status quo.

On the other hand, if you decide to hold your positions after we give a Sell signal, you may actually lose money, if the markets continue their downward trend. We are selling in the first place because our indicators are heading south after a big run-up. Odds are that this new down trend will continue, even though it may be interrupted by some rally attempts.

This very thing happened after our Sell on 5/18/04. The markets attempted to rally for a while before slipping lower during July and making new lows for the year today. Unfortunately, not everybody takes the Sell signal as serious as they should, even though it is designed to protect your portfolio from eroding during a bear market.

7/30/2004 Darren:

Q: I am an Australian citizen, with passport, of course, issued by Australia.

I am currently living/working in Dubai, United Arab Emirates - with a residency and work permit for this country.

You have confirmed what I believe, that it is NOT possible for non-US citizens to buy mutual funds but they can purchase ETFs - this is what you are saying? I fail to understand why a person can't buy into the fund, but can buy the ETF of that fund.

A: Darren, when mutual funds were originally set up (the Act of 1940) it was established by law that they were only to be sold here and prospectuses were only allowed to be sent within the U.S. In addition, some countries have restrictions as to what financial information can be mailed to them. Anyway, that's why I use ETFs for international clients.

7/23/2004 Robert:

Q: In reviewing your chart for TOP 25 FUNDS last week you list only 21 that qualify as of now.

From this list the following are loaded with min of 5% or higher: DIAMX DHLAX DHSCX FRBSX VEIAX FMAAX KDSAX GCMAX

Fund FLMVX is institutional with min of 3 million bucks.

Fund FRBSX and PRSVX are closed.

You may have access because of your status, but regular investors may preclude above funds. Maybe a remark about which funds are loaded, closed and large minimum investments should be considered next to each fund.

A: Robert, I'm only listing funds which are available through my custodian (Charles Schwab) as no load, no transaction fee or load waived funds.

The ones you mentioned are available to me as 'load waived' funds. There is a wide variety of brokerage houses where subscribers keep their portfolios. That makes it impossible for me to track as to who offers what type of funds.

The most common discounters like Scottrade, Ameritrade or TD Waterhouse should have similar set ups like Schwab. However, be aware that as an advisor I have sometimes access to funds which are not available to retail investors.

An example would be the NAMCX fund, which I used last year and which gave us a 47% gain in 3 months. However, it was an advisor only fund with high minimums

You are right; it would be helpful to add these various items you mention to the fund listing. However, keep in mind that this is a FREE newsletter and there is only so much I can do at that price. ;)

That's why I offer managed account service, so my clients don't have to bother with those details.

7/16/04 Bala:

Q: Is there a way to see previous newsletters on your website?

A: Sure, Bala. You can look at previous issues by changing the date in the link. For example, the current issue is:

http://www.successful-investment.com/StatSheet/SS071504.htm

If you look closely, you can see that SS071504 reflects last Thursday's date. You can change that to prior Thursday's date, or any within the past 6 months, and you will be able to read the StatSheet for those dates.

7/9/2004 Mike:

Q: Ulli: Over the past 4 years I have mis-managed approximately $25,000 of IRA funds down to $5,800, that is sitting in cash at Scottrade. I have tried stocks, mutual funds, and ETF's all with the same end...I get frustrated with their performance and I sell out and buy something else! Usually for less than I paid!

I need a disciplined approach to investing. I am 57 years old (I am running out of time!). I have approximately $25,000 in my 401(K) at work, split between an equity fund, small cap fund and a total stock market fund, also a little in the international fund. I appreciate any suggestions you may have.

A: Thanks for sharing your frustrating investment experience, Mike. I appreciate that honesty. Since you've been a reader of my newsletter/StatSheet for a while, there are a few things you can do on your own, if you wish.

Your IRA is in cash right now, which is great, since it matches our current position of being out of the market. At Scottrade you'll have access to most all of the no load funds I feature on a weekly basis. Once my Trend Tracking Index (TTI) signals a Buy, make your fund selection and buy into the market in accordance with our methodology.

Above all, you have to be patient. To make your account grow you need to have a consistent long-term approach. Don't force it, like you seem to have done in the past.

In regards to you 401k, you should check if your investments choices include mutual funds, which are publicly traded and have a ticker symbol. If so, I can add them to my 401k section of the StatSheet and upon receiving a Buy or Sell you can follow along as well. Your current position there should be cash as well.

7/2/2004 George:

Q: Hi Ulli. I started following your StatSheet recommendations with my IRA the end of January this year. Good thing I only invested 1/3 as per your suggestion (thanks), because the market topped shortly thereafter and declined. I sold out in May as well and my portfolio is down some 4%, in line with the S&P 500, which is acceptable. I'm the type of person who logs on to his account every day to see how my funds are performing, and I'm comparing my results with those of the Dow, S&P 500 and Nasdaq on a quarterly basis. I'm wondering if I'm too concerned with the short term and should look more at the big picture?

A: Absolutely, George. I have had the same experience with some of my managed accounts clients, who do similar things every quarter. Our methodology, as should any investment approach, focuses on the long term. While we are generally invested 80% of the time, it's the other 20% most people are struggling with. The markets go nowhere or sideways, rallies are followed by declines and most investors get frustrated after a few months. These are the circumstances we have been in since March of this year. If you take a longer perspective, you will know that these difficult times will pass and a trend will again become apparent and offer us profitable opportunities. In the meantime, don't log on to your account every day and, especially, forget following Wall Street's 'quarter-to-quarter' comparison mentality and focus on your long-term goals.

6/26/2004 Nick:

Q: Ulli, it looks like we may be close to a Buy signal again. Will you mention the funds you are using for your managed accounts, or should I just pick them from the lists in the StatSheet?

A: Thanks for writing, Nick. While I listed the funds which I have personally used, before our last Buy cycle (4/29/03), I will not do that again. This newsletter has grown to a point where a lot of subscribers might jump on a few funds which may cause the fund company to close to new investors. I believe that happened with MOPIX last year. There are a lot of great fund selections in the StatSheet and you can use any of the top 25.

6/18/2004 Dominick:

Q: Ulli, How do you get around trading out of mutual funds in Schwab accounts without paying for short term trading fee? Example, buy a new fund and things change within 60 days. I know this is not a short term trading plan, but I have found myself caught up in not getting out of a fund because of a 90 day trading penalty when the fund is reversing to a down trend. Please need some help, always losing money!!!

A: Dominick, the short-term redemption fees you mentioned can't be avoided. While our methodology attempts to keep us in the market for longer periods, occasionally it happens that we sell within a 90-day period and get stuck with the early redemption fee. It's a fact of life, but I'd rather pay it and sell when our indicators tell us to do so, as opposed to trying to save pennies and lose big if the markets turn down sharply.

The funny thing is, that I personally invest my own money the same way as I do for my clients, and I as well get charged a short-term fee, if I sell within 90 days. By the way, for "retail" investors the short term redemption period is 180 days.

6/11/2004 Caroline:

Q: Hi Ulli, I am sorry for taking any of your precious time, but I have a question and it is a little complicated. I inherited a small amount of money when my father passed away in 1996, and put that money into three mutual funds and bought some individual stocks throughout these past years.

I am 42 years young and don't know anything about investing so I went to see a CFP last week who told me to liquidate ALL the assets in my account and he would set me up in a variable annuity (not really sure what this is). Now I have been reading on the Smart Money web site about variable annuities and this doesn't sound like very good advice.

We are only talking about $20,000, but I may need this money for emergencies in the near future as my husband is going to be entering the training tower for the Fire Department in September and will be taking a temporary cut in pay and also paying for an apartment while in training (an extra expense we have not been paying). I have approx. $7,000 in emergency funds, but now I'm not sure what to do with the $20,000 in the meantime. Any advice will greatly be appreciated.

A: Thanks for your e-mail Caroline. I personally don't think much of CFPs, especially those who work strictly on commission and recommend products not suitable to clients. While there is a place for variable annuities in some people's portfolio it doesn't seem to be applicable to you.

If you buy an annuity and need emergency money, you'll be stuck with paying a hefty surrender charge of around 7% the first year. To me, most of these products are being sold because of their high commission pay out to the sales person, since you're being locked in for usually 7 years, before you can withdraw without penalty. Even if you buy the product, the challenge still remains for you as to how to invest wisely.

Given your circumstances, your best bet is to keep your money liquid using investments via a discount brokerage account, probably like you're doing right now. This enables you, at anytime, to liquidate some of your holdings should the need for cash arise.

If you prefer doing your own mutual fund investing you can follow along using my weekly StatSheet, which gives you all the tools you need to make proper decisions. Or, if you prefer, you may consider my managed account service where I can do it for you.

6/4/2004 Robert:

Q: Hi Ulli, greetings again. Regarding your 7% sell rule: If you buy at $10 and the price is now $40, is the 7%rule based on which price?

I use a trailing stop loss (mental with funds) for selling funds. Thank you!

A: Thanks for writing Robert. My 7% Sell rule is always based on the highest price your investment reaches from the time you bought it. So it acts as a trailing stop loss and will lock in your profits, or limit your losses. In your example, you should sell if the price drops from $40 to about $37.

This applies to mutual funds. Your example almost sounds like you are talking about an individual stock investment. Due to their higher volatility you should use a higher percentage for stocks, such as 10 -15%, or whatever you're comfortable with. You don't want to keep it so tight that you get stopped out quickly and then watch your stock soar to new highs.

5/28/3004 Mike:

Q: Ulli, I have never been real keen on funds that invest outside of the USA. The losses that I have had can be attributed to investing offshore (anywhere but USA). My feeling, right or wrong, is that many (most?) US companies are multi-national anyway and reflect the world-wide market in their industry. If I am invested in the total US market, I am pretty much covered. Or am I? I have about 3% of my total holdings in what may be considered International, Euro, and Pacific Index funds but I'm in those funds because I have read and listened to others who have tried to convince me that I "must" be invested internationally. I still do not feel that this exposure is necessary and am looking for a reason to expand my international exposure. Looking for a reason that I feel comfortable with. Any ideas, or am I a lost cause for this international exposure?

A: Mike, there is probably no right or wrong answer for this one. If you've had losses in the international arena they can possibly also be attributed to the fact that you may not have used a disciplined approach. Not knowing your situation I can't be sure of that, of course.

I have to agree with you in that most of our profits using our trend following approach have always come from the domestic market. If I were to get 2 Buy signals at the same time, domestic and international, I'd use the bulk of my portfolio for domestic funds. The bottom line really is to make your portfolio grow and not to fall in love with any one region, or the myth one 'must' be diversified internationally.

I myself prefer the good old U.S. market, but during those times when we have been in cash I have used international bond funds and others to bridge the gap, so to speak. Again, if I get a Buy internationally I'll take a hard look at it, but historically, a domestic Buy has always preceded the International Buy. Last year, we got into domestic funds on 4/29/03 and into the international ones on 6/3/03.

5/21/2004 Rob:

Q: Ulli, I am new to your update and after reviewing the last four I feel like I finally found something that will help me preserve capital and undo some of the damage from brokers that I have used in the past.

Question: Do you include the status of the International Bond Funds every week?

In looking at the Bear Market Funds it looks like great 4 week, 8 week and 12 week numbers. What am I missing? I know this is a new feature but the indicator is confusing me.

A: Thanks for your e-mail Rob. I can sympathize with you about having sustained financial damage by brokers. It's a story I have heard a lot over the past few years.

I have removed the International Bond Funds section, since we've been out of this market for quite a while and it is not even close to becoming a recommendation at this time. As market behavior dictates, I will delete certain sections and replace them with more timely information.

Of course, the bear market fund stats are looking great right now. However, we need to approach it systematically, so that we control the risk as much as possible.

First, our main indicator, the Trend Tracking Index (TTI), has to break 'below' its long-term trend line signaling a Sell for all domestic equity mutual funds.

Second, the Short Fund Composite (SFC) has to break 'above' its own long-term trend line confirming a trend reversal and a Buy into bear market funds. Then we will look at the stats for the individual bear funds and select those with strong momentum figures. Again, when selecting be sure to choose only those which are suitable with your investing style. For example, if you are very conservative, don't pick a fund which is 200% leveraged.

5/14/2004 Ted:

Q: Ulli, I enjoy reading your newsletter every week and agree with you on many issues especially the demise of buy and hold. I was curious if there is a way to use mutual funds to take advantage of the declining dollar, the increased demand for commodities worldwide and non-U.S. currencies in countries like Australia and South Africa.

A: Thanks for writing Ted. Yes, there are mutual funds and Exchange Traded Funds that deal with the specific areas that you mentioned. Some of them are sector funds and extremely volatile, which is why I don't use them.

Others are workable. For example, RYJUX is a fund that benefits when interest rates rise. It's just crossed its long-term trend line on the upside. A very aggressive one is RRPIX which also rises as interest rates go up, but at 125%.

Another one that goes up in value as the dollar goes down and gold rises is PSAFX. I currently don't use any of them, but may do so in the future. I try to stay away from country specific funds and prefer funds which cover an entire region because of better diversification, such as emerging markets. Unfortunately, many of those in the emerging arena and Asia Pacific all went into a Buy mode around the time when we received our domestic Buy on 4/29/2003. This is why I'm not invested in them.

5/7/2004 Robert:

Q: Will interest rates keep going up for a long time and would it be safe to invest most of my money in RYJUX?

A: No, you never want to invest all of your money in any one fund at once. Use our incremental buying procedure and buy into the fund with 1/3 of your assets. Wait till the invested portion has gone up by 5%, then invest another 1/3. Do that again until you are 100% invested. This approach avoids you possibly buying in at market tops with your entire portfolio.

Managing risk is always the key issue. If the markets go down after you have invested 1/3 of your money and you use our recommended 7% sell stop, your losses would be very moderate. Remember, the surest way to the investing poor house is by not using any stops.

While I believe that based on current economic growth we may be entering a period of rising interest rates there is no assurance that rates will rise rapidly and/or stay higher. That's why we always have to protect our downside.

4/30/2004 Robert:

Q: How much longer do you think the stocks will rise before they start to go down?

A: How long will stocks rise? They may have already started their trend reversal. Seriously, I have no clue Robert, and I don't even want to guess. That's the beauty about my approach to investing. I don't have to concern myself with that, but let my indicators be my guide. They will tell me when it's time to get out, meaning that the chances have increased that a trend reversal has occurred.

In the meantime I just follow the trend.

4/23/2004 Linda:

Q: Ulli, You list many of the funds that were mixed up in the mutual fund scandal! I refuse to buy them.

A: Linda, I don't blame you if you're upset about the mutual fund scandal; I'm just as furious with those companies as you are. I am just putting the finishing touches on my next article "How to beat the mutual fund companies at their own game," which will be posted at my site upon completion.

I use no load funds to my clients' advantage by choosing only those which have the greatest probability of making us money. We only stay in them during strong up trends and get out of them during downtrends. If some of them have been involved with illegal after-hours trading, I can't change that. While I try not to use the worst offenders, like Janus, I still have a money making position in it. That's the only reason I'm keeping them around for the time being, I have no allegiance to them.

As an alternative you can use those funds which are "clean" or use ETF's.

4/16/2004 Warren:

Q: Thank you for all of the great information I've been reading on your site. I was hoping to find a larger selection of large cap funds in your recommended list of funds. Are you planning on enlarging that list anytime soon? Again, thanks for rendering a great service with your newsletter.

A: Warren, you maybe still misunderstanding my approach a little bit. When we get a Buy signal based on our Trend Tracker (TTI) we choose funds with strong momentum figures in the area of 4wk, 8wk, 12wk and YTD. It is immaterial as to whether the funds listed in our top 25 are Large Cap, Small Cap or Mid-Cap. If the markets correct and we get stopped out based on our short-term sell stop of 7%, it is an indication of weakness in that sector in which we get stopped out.

For example, after our Buy on 4/29/03 one of our strong performers was NAMCX, a small growth fund. We got stopped out 3 months later with a 47% gain. Since our TTI was still in a Buy mode, this gave us the opportunity to "rotate up" into stronger sectors at the time, such as small value.

When I list the top 25 funds based on 4wk and 12wk momentum in my newsletter, those are the funds which should be used given the current economic environment. Again, it's immaterial what orientation they have. Why? Because we have an exit strategy and are not invested with a Buy & Hope mentality.

4/9/2004 Ted:

Q: Ulli, I enjoy reading your newsletter every week and agree with you on many issues especially the demise of buy and hold. I was curious if there is a way to use mutual funds to take advantage of the declining dollar, the increased demand for commodities worldwide and non-U.S. currencies in countries like Australia and South Africa.

A: Thanks for writing Ted. Yes, there are mutual funds and Exchange Traded Funds that deal with the specific areas that you mentioned. Some of them are sector funds and extremely volatile, which is why I don't use them.

Others are workable. For example, RYJUX is a fund that benefits when interest rates rise. It's very close to reaching its long-term trend line on the upside. A very aggressive one is RRPIX which also rises as interest rates go up, but at 150%.

Another one that goes up in value as the dollar goes down and gold rises is PSAFX. I currently don't use any of them, but may do so in the future. I try to stay away from country specific funds and prefer funds which cover an entire region because of better diversification, such as Emerging Markets. Unfortunately, many of those in the Emerging arena and Asia Pacific all went into a Buy mode around the time when we received our domestic Buy on 4/29/2003. This is why I'm not invested in them.

4/2/2004 Ron:

Q: Ulli, I've been following your weekly stats now for about 6 weeks. I'm watching the trends and noting your recommendations as they develop. I'm still confused on some of the tracking fundamentals. You say that you will sell if a fund drops 7% Below the draw down (DD) on the chart. This weeks (Mar 25, 2004) stat shows NAMCX at -10.23% down. Why hasn't it been sold?

Secondly, last week (Mar 19, 2004) in your Q&A section, a question from Lester (written Mar 12, 2004) was "Which one fund in the top 25 would you recommend? You said SMCDX and you gave your reasons why. Well, here it is only one week later and this fund is not even on the chart. If Lester bought it, how does he track it now?

A: Ron, since you are fairly new to my newsletter you may have missed some of the information discussed earlier in this Buy cycle. We sold NAMCX on 8/6/03 for a 47% gain, when the market corrected the first time. This is stated in section 1 (Domestic Equity Mutual Funds) right below the Indicator chart. Regarding the fund recommendation SMCDX, I have to point out that I only feature the top ranked 25 funds out of over 700, sorted by 12wk performance. This obviously changes from week to week and SMCDX may have slipped out of that ranking, which is no reflection on the fund itself. How can reader Lester track this? He is the only one who knows how much he paid for the fund and he will have to use the 7% rule based on his purchase price. While this may be slightly different than the 7% I use, the point is to always establish an exit price when you enter into any investment position. I am considering featuring the top ranked 25 funds by 12wk performance, as I am doing right now and also show 4wk performance to cover more ground. See the changes in this week's StatSheet.

Remember Ron, this is a FREE newsletter and I'm trying to provide as many tools as I can. The investor following my methodology must track his own stop losses. Those who want the total package, and not be bothered with any details, should consider using my managed account service.

3/26/2004 Keith:

Q: This is a follow up to last week's question. Ulli, I have been following your approach successfully using ETF's (Exchange Traded Funds) and I prefer them over no-load funds. What possibilities, if any, do I have to short the market should the need arise?

A: You may not know it Keith, but the answer is very simple. You can sell short any ETF you like! There is a benefit ETF's provide the average investor, which is ease of entry. These products do not have up-tick rules, so you can decide to short the shares even if the market is on a down trend. What this means is that, rather than waiting for a stock to trade above its last executed price (called up-tick), you can short sell the shares at the next available bid and immediately enter into the short position. This is important if you wish to enter quickly in order to capitalize upon the market's downward momentum. With regular stocks you would not be able to enter into the position if the downward pressure was great.

3/19/2004 Monica:

Q: Ulli, this maybe a premature question, but when the trend turns around (eventually) and you receive a Sell signal to move out of mutual funds you move your money back to the safety of the money market account, right? Is there any way, during a down trend, to use bear market funds?

A: Yes Monica, generally in the past when the markets reverse course we have moved to the safety of money market. However, I have developed a bear market trend indicator which will tell us when to purchase a no-load bear market fund. This, of course, only applies once a clear down trend has been established. I will publish this indicator at the appropriate time in the weekly StatSheet.

3/12/2004 Lester:

Q: With the sell off this week a lot of red numbers have appeared on your 4wk and 8wk momentum numbers in your top 25. I am a new subscriber and still overwhelmed by all of your information. May I ask, if you had to pick only one fund for a small portfolio, which one would it be in this environment?

A: Lester, here's how I would look at it given the current situation. With this week's sell off I want to see first which fund has held up fairly well and I do that by visiting the DrawDown column (DD%) in the above StatSheet. The fund with the lowest DrawDown is SMCDX with -2.25%. As you can see, this fund also happens to be positive in all momentum categories and has a current Buy cycle performance of an outstanding +41.06%. A view at a technical chart confirms that this fund has been climbing steadily and consistent during our entire cycle. If you plan on buying this fund be sure to use our incremental buying procedure and always be prepared to exit should this fund drop by 7%.

(Disclaimer: This conclusion is based on our method of analysis and does not constitute a recommendation to buy, sell or hold any security. At the time of publication we did not own the fund mentioned in the above response).

3/5/2004 Ben:

Q: Ulli, I am a new subscriber and, unfortunately, I just found out about your approach to sensible investing. I used to be a Buy and Holder, on broker recommendation, and lost big during the market meltdown of the past few years. I have stayed on the sidelines for the past year not knowing if I could "trust" this rally. I am left with $250k in money market and I was curious as to what my return would have been during your current Buy cycle?

A: Sorry to hear about your bad experience Ben, but, unfortunately, I have heard similar stories many times. Your size portfolio would have grown by 35.30% (as of 3/3/04), after fees, if we had managed it during the current Buy cycle.

2/27/2004 Jay:

Q: Ulli, as a new subscriber I have been following your recommendation and bought into a few mutual funds 4 weeks ago. Wouldn't you know it, the market hasn't moved much but I think I now understand much better your reasoning for using the incremental buying procedure. It avoids buying in with 100% of your money at potential market tops, right?

A: That is very true, Jay. Even though our trend tracking index is still above its long-term trend line, you never know when a market reversal may occur. Since we have had such a tremendous run over the past 10 months, it is absolutely crucial to use a disciplined strategy not only for entering the market, but also for exiting it, either to limit losses or to maximize accumulated gains.

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