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2/20/2004 James:
Q: Ulli, I'm retired and always believed that investing in
bonds or bond funds is the way to invest during retirement.
With the economy recovering and higher interest rates ahead,
I'm concerned about losing principal. What is your take on
this?
A: You are absolutely correct, James. When interest rates
go up, bond prices go down. Such happened during the spike
in rates last year when bond holders saw their principal drop
by some 20% -- in one month. So much for the perceived safety
of bonds. I have used bond funds in the past, when rates were
high and bond prices low. However, we're nearing the top of
the market (in bonds) and I would not invest in them at this
time. Of course, there is always an exception and that is,
if you've been holding a bond for a while, you're happy with
the interest it is paying AND you don't need the money; so
that you can hold it till its due date. As long as you don'
t sell, you won't lose principal.
2/13/2004 Laren:
Q: Ulli, my daughter is getting married next year and my wife
and I will pay for the wedding. We have the money available
now and are wondering if we should invest it with you in the
meantime?
A: Laren, I've been asked this many times, whenever people
have a short-term need such as a wedding or saving for a down
payment for a home. Generally speaking, I'm very much opposed
to investing money which is needed in the short-term using
a long-term strategy. Why? Investing in the markets, no matter
how well the risk is managed, involves some fluctuation within
a portfolio. If the need for money arises and the portfolio
has just retreated some 5% it could be a detriment to the event
you had planned. My recommendation is to simply keep the money
in the bank and don't jeopardize it.
2/6/2004 Peter:
Q: Ulli, I've been following your recommendations since the
beginning of your Buy cycle and I'm sitting on large unrealized
gains. Thanks. Should I also be following your strict recommendation
for selling any fund which drops 7% off its high?
A: That's a great question, especially in the current market
environment. It's a personal decision, Peter. You can use any
figure that you're comfortable with. For example, you could
use a 10% sell limit on funds which have given you greater
appreciation, such as MOPIX. It's been one of the strongest
performing funds, yet it is also a little more volatile than,
say, NGUAX. However, the idea is to follow a disciplined approach
whichever number you decide on. Those investors, who have only
recently bought into the market and have no unrealized gains
to show, should definitely stick to the 7% rule, in order to
limit potential losses.
1/30/2004 Karie:
Q: Ulli, I was wondering how often your StatSheet is updated
and published?
A: I generally publish the updates on a weekly basis. If I'm
traveling I may have to skip a week occasionally. However,
you most certainly can work with the information from 2 weeks
ago, since our outlook is long-term anyway.
1/23/2004 Randy:
Q: Ulli, I'm considering becoming a new managed account client.
I understand that you will move the money into and out of the
various mutual funds as per your method. Does your company
also have direct access to my money?
A: A very good question Randy. No, we never have access to
your money. All of our managed account clients are set up at
Charles Schwab & Co., who functions as the custodian for
clients' assets. I merely have a limited power of attorney
to buy and sell mutual funds for you.
1/16/2004 Jim:
Q: Ulli, I am having trouble printing out your weekly performance
report and I am wondering if that is by design or whether there
is a problem with my computer which I need to get fixed. I
look forward to hearing from you.
A: Thanks for pointing it out Jim. When I tried to print I
realized that the text in the right margin were being cut off.
I'm having my designer look at it and, hopefully, we'll have
it fixed within a week or so.
1/9/2004 Janice:
Q: Ulli, I just found out that there is a new symbol for your
recommended Eclipse Small Cap Fund. What happened?
A: It appears that Eclipse funds merged with Mainstay Funds.
The symbol changed from EEQFX to MOPIX (Mainstay Small Cap
Opportunity). This has no bearing on the fund itself. However,
please note that as of 1/5/04 this fund was closed and no longer
accepts new investors. Those of us, who have positions in it
may purchase more. Hope most of you got in this one.
12/26/2003 Phil:
Q: Ulli, I travel quite a bit and don't always have the opportunity
to receive your current StatSheet. Do I need the latest version,
or can I use one that is 2 weeks old to make my mutual fund
choices?
A: A timely question Phil, since I was just going to address
this issue. You most certainly can use an older StatSheet,
since the rankings don't shift all that much. It's a matter
of fact, it's more crucial at the beginning of a Buy cycle
to have current information. For this reason I will start the
year 2004 issuing this StatSheet on a bi-weekly basis. If market
activity dictates differently, I will switch back to publishing
it weekly.
12/19/2003 Ted:
Q: Ulli, I'm looking to invest and follow your methodology.
Since you've been in the market since 4/29/03 (Congratulations)
and there has been a strong upside move, which momentum indicator
should I rely most on at this time, when making mutual fund
choices?
A: That is a very good question, Ted. When adding "new
money", I will look at the total performance during our
current Buy cycle, but I will look more closely at the 4wk
performance. Why? As this bull market gets more mature, different
sectors are displaying strength at this point and some funds
we originally held are getting weaker. NAMCX would be a good
example of lacking in 4wk performance and EEQFX would be an
example of a fund showing strong current performance.
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.
9/26/2003 Jeff:
Q: Ulli, I received a shareholder letter from Janus Funds
regarding the recent allegations by U.S. Attorney General Spitzer
in which Janus totally distorted the facts surrounding the
allegations. Have you followed this and would you still recommend
Janus Funds?
A: This is a pet peeve of mine. Yes, as a shareholder in Janus
Funds I received the same letter and was flabbergasted by their
denial of facts. While I still have a Janus position I will
no longer recommend them in the future because of their hostile
attitude towards the "small" investor. I will write
an article about this subject and will let you know once it
is posted at my site.
9/19/2003 Linda:
Q: Ulli, I would like to ask a more personal question, if
that is okay? With your fund recommendations having performed
very well (I was fortunate to be in from the beginning) what
do you, as an investment advisor, invest in?
A: That is a great question, Linda. I personally invest in
the same funds which I use for my managed account clients.
Out of my original 9 favorites I currently own JORNX, UMVEX,
NGUAX, NAMCX and RSPFX. I also sold MUHLX when I recommended
to do so and I follow my own Buys and Sells to the latter.
9/12/2003 Mike:
Q: Ulli, I have been following your method for a while and
wanted to place an order to buy your recommended top performing
fund NAMCX, despite it having moved up already by some 50%.
However, my broker (Schwab) informed me that this is an "advisor
only" fund and not available to the retail customer. What
can I do?
A: Mike, yes I am aware of it and this certainly varies among
brokerage firms. Sometimes, as advisors we have access to no
load funds which are not available to the retail customer.
There are several choices you have ranging from moving your
account, to having your account managed or using a different
fund. Most likely the easiest solution would be for you to
use a different fund. Another strong performer has been HENLX,
but I strongly recommend you use the incremental buying procedure
and sell, if the fund drops by 7% from its highs. Remember,
managing the risk is the key to successful investing.
9/5/2003 Cleo:
Q: Ulli, this is a more sensitive question and not meant to
offend you or your company. If I have my account managed by
you, do you have access to my money, or how will I be protected
against any possible fraud?
A: No offense taken Cleo, this is a good question. I have
an independent advisor relationship with Charles Schwab & Co.,
who acts as the custodian for all of my clients' accounts.
I merely have a limited power of attorney to move your money
into my chosen mutual funds as per our plan and back to your
account. I have no access to your money at any time.
8/29/2003 Barbara:
Q: Ulli, I have most of my money in a variable annuity. Can
your Buys and Sells be applied to annuities?
A: Yes, Barbara, it works just a well with variable annuities
(VAs). However, at this point I'm only tracking VAs at Great
Western since several of my managed account clients own these.
Most VAs have a variety of good investment choices, which can
be used with our domestic and international plans.
8/22/2003 Karl:
A note from reader Karl:
Q: As a recent Newsletter PLUS subscriber I missed your Buy
signal on 4/29/03. I understand the fund selection process,
but should I invest all of my monies now? I have about $60,000.
A: No Karl. Since we have been in a Buy mode since 4/29/03,
all of our recommended funds have moved up substantially. If
you would invest 100% of your monies right now and the markets
decline from here, you would sustain unacceptable losses. That's
why we use the incremental buying procedure. You invest 1/3
of your available funds ($20k) right now and wait till your
selected funds gain 5%. Then you move in another 1/3 and wait
again until it gains 5% before investing the final 1/3 increment.
This is a more conservative approach that has worked well for
us during past Buy cycles.
8/15/2003 Nancy:
Q: I find your newsletter valuable and easy to follow. However,
my schedule is too hectic and I'm often not in a position to
place trades when necessary. I have talked to numerous investment
advisors about managing my money. Since I'm a 'small fish'
with only about $10k no one is really interested. Most require
minimums of $75k or more. Can you help?
A: Certainly Nancy. I'm probably one of the few advisors who
accept client accounts as small as $10k. My entire business
has been build around the 'average' investor. I enjoy the educating
part as well as seeing small amounts of money grow into bigger
ones. We certainly can set up an account for you at Charles
Schwab & Co, who functions as the custodian for all of
my clients.
8/8/2003 Bill:
Q: I don't have a personal portfolio yet, but I'd like to
follow along with your Buys and Sells with monies in my 401k
plan. I've done very poorly with my selections in the past
and need to improve. How would I do that?
A: Very simple Bill. E-mail me a list of your 401k choices
and I will add the top three domestic funds to my database.
They will then be displayed with their momentum figures in
the weekly StatSheet and you can quickly see which one should
be chosen for any given Buy cycle.
8/1/2003 Joanne:
Q: Ulli, I'm a new subscriber and have an account with a deep
discount broker? While you are suggesting only no load funds,
they do have early redemption fees and ever increasing annual
management fees. I wonder if I could use Exchange Traded Funds
(ETFs) to follow along with your Buy and Sell signals.
A: That's a great question Joanne. While I have not yet featured
ETFs in my weekly StatSheet I am in the process of adding them
to the list of available fund choices. I have actually used
them in the latest Buy cycle for my international clients,
and they have done great. There are many benefits to using
ETFs and I will be writing an article about them shortly.
7/25/2003 Joe:
Q: Ulli, I noticed that in your Newsletter PLUS StatSheet
you refer to a column called "DrawDown." Could you
explain again what it means and how I can use it?
A: Certainly. DrawDown is the pull back from the recent highs
of our recommended mutual funds since the latest Buy Cycle,
which started on April 29, 2003. If you are currently adding
new money, you want to choose a fund with a low DrawDown number,
which indicates that this fund is still displaying strong upward
momentum despite the recent pullback in the market. For example,
out of 450 potential no load funds only 3 of them had a 0%
DrawDown as of yesterday, meaning they were at their highs
for the period.
7/18/2003 Jackie:
Q: Ulli, As a new subscriber I was wondering how I can apply
your trend following strategy to my 401k plan?
A: That's very simple, Jackie. If you have publicly traded
mutual funds in your 401k, you can simply e-mail the ticker
symbols to me and I will add them to the weekly StatSheet.
This will enable you to immediately see which ones are worth
using during this particular Buy cycle. More importantly, it
will keep you out of those that are showing poor performance
in this economic environment.
7/11/2003 Robert:
Q: Ulli, I followed your recommendation as a Newsletter PLUS
subscriber and purchased the MUHLX fund, when your Buy signal
was issued on 4/29/03. It is up by some 15% and I am very happy
about it. I did notice that one of your other recommendations
has gained 34% during the same time period. Should I sell the
first fund and buy the second one, since it appears to be better
performing?
A: Robert, I'm glad you got in at the time of the Buy recommendation
and are showing some nice profits. Generally speaking, I don't
recommend switching, unless of course your chosen fund is a
loser. In my investment practice I use "new money" to
invest in the better performing funds, now that I have the
benefit of hindsight. Keep it mind, however, that the market
and various sectors can rotate and that MUHLX may pick up steam
later on in the cycle.
7/3/2003 Joanie:
Q: Ulli, I am a new subscriber and I was wondering if you
only update your investment positions or Buy and Sell signals
on Fridays?
A: No, I sure don't. Friday is the regularly scheduled update.
If we have a change in investment positions, or an important
announcement to our plans, I will send out a special e-mail
bulletin on the day it occurs. That will give you the chance
to act in a timely manner.
6/27/2003 Mary:
Q: Ulli, could you briefly describe what your trend tracking
methodology accomplishes?
A: Sure Mary. Our trend tracking indicators allow us to identify
trends in mutual fund prices. Essentially, it tells us when
to buy and sell no load mutual funds. There are two objectives:
1. To maximize potential gain by investing in mutual funds
when prices are rising, and 2. To preserve principal and earn
interest by shifting our clients' accounts to safe money market
funds when mutual fund prices are falling.
6/20/2003 Raleigh:
A note from reader Raleigh:
Q: Ulli, I have been looking for an investment advisor and
read your article about how to find one using www.investortree.com.
Unfortunately, they no longer exist. Do you have another recommendation
of a source that features investment advisors?
A: Raleigh, I wasn't aware that they no longer exist. Yes,
I did find another source called www.wiseradvisor.com.
I am listed there myself along with many other investment advisors.
6/13/2003 Terri:
Q: Ulli, I have had a portfolio with a broker over the past
few years and lost about 50%. I don't need to elaborate as
to how I feel about that. I would like to have it managed by
your company following your method. What is the procedure?
A: Terri, sorry to hear about your loss, but it's the same
sad story I have heard quite frequently over the past few years.
Transferring your account is fairly simple. I will set up an
account for you at Charles Schwab & Co and they will process
the transfer request. Once your monies arrive I will then invest
your portfolio as per our methodology.
6/6/2003 George:
Q: Ulli, I subscribed to your newsletter recently after your
latest Buy cycle started. How do I go about investing now?
Do I put 100% of my portfolio in the market all at once?
A: No, George, definitely not. You would use our incremental
buying procedure. You invest 1/3 of your portfolio in our recommended
funds right now and wait until you have a gain of 5%. You then
invest another 1/3 and wait for another 5% gain before committing
the 3rd and final increment. This conservative approach lets
you participate in the current market environment without risking
all of your capital at once.
5/30/2003 Jan:
Q: Ulli, I don't have an investment account yet, but I do
have a 401k at work. I have made poor decisions in the past
and was wondering if you could help with that using your method?
A: Sure, Jan. One of our benefits of being a subscriber is
that we will track your 401k fund choices, if they are publicly
traded funds. By following our weekly newsletter as well as
special update bulletins, you will not only know which fund
to choose but also when to make a move.
5/23/2003 Maria:
Q: Ulli, over the years I have accumulated several IRA accounts
and I receive monthly statements for each of them. Can I combine
these into one?
A: Maria, you certainly can do that, as long as your IRAs
are all of the same type. For example, if you have several
'contributory' IRAs they can be combined into one at any brokerage
firm. The most I have ever done was combining a client's 12
IRAs in to one. Now he is getting one statement a month and
is in better control of his investments using my approach.
5/15/2003 John:
Q: Ulli, I like your approach and the simplicity of it. However,
I still don't have enough time to follow and execute your investment
plan myself. What is your suggestion?
A: John, you are not the only one in this position. That is
why we offer complete management services for your brokerage
account, IRA, 401k, Sep-IRA or annuity. All of our managed
account clients are set up at Charles Schwab & Co for easy
implementation of our trading plan. For more info send an e-mail
to: ulli@successful-investment.com.
5/9/2003 Lou:
Q: Ulli, how do we control risk on the downside using your
investment methodology?
A: That is the cornerstone of our approach. Right now our
main indicator would need to drop 6.32% in order for us to
sell our positions. This would translate to an approximate
loss of 6% if the markets were to go straight down from here.
Since we currently are only 1/3 invested, we would loose about
2%. That is very reasonable, and is the risk we need to take
to be in the market in the first place. I don't want to split
hairs and figure out what off-setting gains we would have in
our bond or money market position.
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