Lobbying for more options in your 401(k)

"My company retirement plan has a lousy set of fund offerings. How do I convince my employer to offer more (and better) options?"

One of our readers e-mailed with this question recently. For the benefit of other readers in the same boat, I thought I'd publish my response here on the Weblog:

The best possible outcome would be for your employer to add a "brokerage window" or "self-directed" option to your 401(k) plan (or your 403(b), if you work for a not-for-profit). Such an option would allow you to invest in funds offered by a brokerage firm selected by your plan administrator.

A couple of years ago, my wife's employer (a small college) added a brokerage window. The number of funds from which we could choose grew, literally overnight, from about 20 to hundreds. (And, of course, I immediately moved her retirement money from some slow performers into SMI's Upgrading recommendations!)

Getting your employer to make positive changes to your 401(k) will require convincing the benefits decision-maker that such a change is in the company's best interest. The folks at The Motley Fool offer a helpful guide on how to build a persuasive case. (They even include a sample letter to send to your company-benefits director!)

Fodder for your letter will come from your plan's Summary Annual Report, Summary Plan Description, and/or Fee Arrangement. Request a copy from your company's 401(k) plan point person. (It may be someone in your human resources department, or even the company CEO or CFO if you work for a smaller outfit.)

Buried in these documents is the dirt on the fees your plan charges — both the investment expenses and the plan expenses — and whether your boss covers administrative costs or if they are passed through to plan participants (that's you)....

"In a half hour, you can figure out what your expenses are," says Stop the 401(k) Rip-off! author [Google Books preview] and retirement-plan industry veteran Dave Loeper. "If you find out that you are getting ripped off, the next step is to complain to your employer without sounding like a complainer."

Since this topic can be touchy, your aim is to inform, not complain, Loeper says. Don't focus on the needlessly high expenses you're paying. Instead, note that you have calculated the expenses you're paying and are wondering if there are some lower-cost alternatives available. Judiciousness should be your default mode. You've got to convince your company that, in dollars-and-cents terms as well as employee-satisfaction terms, something needs to change.

This Morningstar article (free registration required) covers some of the same territory as The Motley Fool piece, but lays out additional options.

If adding a brokerage window is "a bridge too far" for your employer, you need a fallback position — namely, requesting the addition of several low-cost index funds. The Wall Street Journal reported a few weeks ago that more employers are adding index funds to their plans, so there might be a trend here your employer would be willing to follow.

But, as the WSJ notes, getting indexes added presents its own challenges.

The stodgy 401(k) world won't change strategies overnight. Fund companies won't easily relinquish their active-management fees, which tend to be higher than those charged on index-tracking products, especially at a time when rocky markets are pinching profits. And actively managed funds tend to do more "revenue sharing," which involves fund companies making payments to plan administrators.... (emphasis added).

Still, some big players are betting that the stars will begin realigning....

In a recent survey of about 150 employers by consulting firm Hewitt Associates, 17% of them said they are likely this year to replace some or all of their plan's actively managed investment options with index funds. That is up from 8% a year earlier....

Some smaller plans that don't have the purchasing power to access the lowest-cost index funds on their own are banding together in multiple-employer plans that take a passive approach.

(The WSJ also takes note of "a spate of recent lawsuits [in which] workers have claimed their 401(k) plans charged excessive fees and offered actively managed funds that failed to beat cheaper index-tracking alternatives." For an example, see here. This is probably not something you want to bring up in a confrontational way — you don't want to come across as adversarial — but the fact that some employees are willing to go to court reinforces that this is an important issue to workers and one employers need to be aware of as well.)

If you can get your employer to add even just a handful of index funds representing the major market categories (large companies, small-medium companies, international stocks), you could put together something similar to our Just-the-Basics strategy. Such an approach is likely to offer superior results to being invested in not-too-stellar pre-chosen funds.

Workers with limited fund options within their retirement plan will likely benefit from reading our research on how to choose funds in your 401(k) when your options are few (SMI web membership required). When we tested this simple approach a few years ago, its returns more than tripled the broad market's over the 8-year test period!

Posted by Joseph at 4:02 PM | Comments (0) | TrackBack
Category(s): Family Finances, Retirement

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Paper vs. physical gold

In our September cover story, A Road Map For Investing in Gold (web membership required, sign up here), Austin tackled the issue of buying paper gold (like an ETF based on the gold price) vs. owning real, physical gold. Basically, his view was that paper gold is fine to trade if all you're trying to do is make a profit on the increase in gold's price over the short-term. But for those who envision a long-term move in gold based on an accelerating devaluation of the dollar, being an accumulator of the physical metal itself seems like a better idea.

With that in mind, I found this warning from the World Gold Council (via the Uncommon Wisdom blog) to be very interesting:

There is approximately 78 times more "paper-gold" being held by investors than physical gold in existence on this planet that has ever been mined, according to the World Gold Council.

As this clearly implies that un-backed "paper-gold" accounts may be subject to the risk of default, investors should stay clear of buying paper-metal accounts from banks and make sure that any precious metal investment vehicle used does actually store the metals in a fully unencumbered, "un-leased" and physical form.

Not surprisingly then, the author comes to a similar conclusion as Austin at the end of this similar blog post on the dangers of paper silver:

My point is that while I prefer to hold physical gold and silver, I think there’s nothing wrong with using the SLV (or the GLD or DGP, for that matter) for a trade. It's much easier than shlepping down to a precious metals dealer and buying physical gold and silver with the intention of selling it later.

Physical gold and silver you buy and HOLD. Paper gold is fine for trading.

If you're thinking at all about investing in precious metals, it would be time well spent to read our recent two-part cover article: A Dollar in Danger Leads Many to Gold, and A Road Map for Investing in Gold. Web members will also find links to our specific primers on gold coins, gold bars, and gold funds at the bottom of that second article.

Posted by Mark at 3:49 PM | Comments (0) | TrackBack
Category(s): Inflation Watch

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Don't fight the Fed

The first stock market saying I ever remember learning was "Don't fight the Fed." The professor in my first college investments course was explaining the importance of the Federal Reserve's monetary policy decisions on the stock market's direction. He walked us through some prominent patterns (each with it's own pithy saying) like "three steps and a stumble" — the tendency for the market to fall after the Fed raises interest rates for a third consecutive time — and why those relationships existed. Some of these specific patterns aren't as widely known anymore (perhaps because the Fed started changing its Fed Funds interest rate more often over the past two decades?). But the main idea was that if you wanted to succeed in the stock market, you had to know what the Fed was doing and position yourself accordingly.

This came to mind today while reading Jon Markman's latest article. In it, he describes the impact that he expects the massive stimulus efforts of the US government (along with virtually every other world government) to have on the stock market. In his view, this massive unloading of the monetary cannons trumps every other factor when evaluating the likely direction of stocks for the next few years. His opinion is we're witnessing a replay of 1991. Terrible economy, significant financial duress (S&L crisis), and the birthing of a massive bull market in equities. In other words, don't fight the Fed.

Picture this: At least $10 trillion has been created and poured into the world's financial arteries in a process that will take at least three years to seep out through various government spending programs. And if bearish skeptics don't understand the impact that money will have, it's mostly because they've never seen something that big before and it's frankly almost unimaginable. "People don't see it because monetary infusion cycles don't happen very often, and certainly not on this scale," [veteran money manager Robert] Drach said. ...

"The main thing is not to be frightened of the market," Drach said. "People who get hurt will be ravaged by low returns in Treasurys. They will be annihilated. It will look to them as if the whole episode is a money-transfer system from senior citizens and foreign investors buying U.S. government bonds to young people buying stocks. But it won't have to be that way for anyone. Everyone should participate in equities if they can. It will be a rare opportunity to grow wealth."

So get ready to party like it's 1991. If sector rotation becomes key, then the game will be played at the level where we must figure out which groups are faltering and which ones are about to take their place.

It's an interesting premise, and worth a quick read of the whole thing to see how he draws the parallels between the early 90s and today.

Is it plausible? Hard to know. But it is surprising to me that so few people seem to have focused on the potentially positive implications this huge wave of liquidity has for the market. Those that mention it at all seem to view it in exclusively negative terms, as in "this market rebound has been artificially inflated by all the stimulus...just wait until that runs out and the market crashes again."

Ultimately, the insane borrowing and spending the government is doing has to come home to roost, or else the government would just do this every time the market needed a boost (some would argue that's pretty much exactly has happened during the past 25 years). But the timing of those cause-and-effect relationships can be much more protracted than anyone would expect.

A final thought: if this does turn out to be remotely accurate, note the last comment I excerpted above. "If sector rotation becomes key, then the game will be played at the level where we must figure out which groups are faltering and which ones are about to take their place." That's a pretty good explanation of what SMI's Upgrading strategy does. Good to know we'll be well prepared...

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Category(s): Current Market Events

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My experience with Restaurant.com

If you're unfamiliar with Restaurant.com, it's a site dedicated to helping you save money when you eat out (their slogan: "Eat. Drink. Save. Money"). They do this primarily by helping you locate restaurants (by city, state, or zip) that offer discounted gift certificates.

A popular option is the $25 gift certificate that costs only $10. The certificates are added to your Restaurant.com account and then are available to be printed. Sounds like a no-brainer — if it weren't for the fine print.

These certificates have conditions, such as a requirement to spend X dollars over the amount of the certificate, a gratuity that's calculated on the full price (i.e. the certificate value plus the out-of-pocket), and, of course, certain menu items are excluded. So maybe not a guaranteed good deal, right?

But what if you could get that $10 gift certificate for $1? That was the case a few weeks ago (if you follow us on Facebook or Twitter, you would have seen us spread the word). For a limited time (if you used a certain promo code), you could get a $25 certificate for only $1.

Being the bargain hunter I am, I loaded up: spent $11 for 11 gift certificates (eight to restaurants we frequent during basketball season and three we go to on special occasions). But given the aforementioned conditions, was this really a good deal? This past Saturday, we found out.

My wife and I, along with our two little ones, joined one of my brothers and his family (I told them about the deal, so they had the same certificate) at a family-oriented sports restaurant called Beef 'O' Bradys. The certificate was for $25 off — but to meet the conditions for use, we had to spend $35, plus a required 18% gratuity would be added to the full amount.

So my goal was to spend right at $35 (not including the tip). The kids' meals were only $4 each. My wife and each ordered something was about $8 each. Hmm. Even after adding in (over-priced) soda and tea, we were still going to be short by 8 bucks. So we got an appetizer to share around the table to meet the $35 mark.

When the bill came, it was $36.14 with tax (but not including gratuity). Pretty close. At the time, I wasn't sure if tax would be allowed to be included (if not, we would have had to buy something else), but the fine print also gives the restaurant owner/manager some discretion. My fingers were crossed and, voilà, discount accepted, giving us an on-site obligation of $15.95.

So how much did we "save"? Interestingly, if we had ordered like we normally would have, we would have spent about $35 (two adults, two kids, two drinks, no appetizer, tax and tip). Instead, we spent $16.95 (the on-site bill + $1 for the gift certificate). So we spent $18 less and got an appetizer to boot. All and all it worked out well (my brother had a similar experience in savings).

But suppose we had purchased the Restaurant.com gift certificate at the regular $10 price? Would that be a good deal? In that situation, we would have spent $25.95 ($15.95 on-site + $10 for the gift certificate). So we would have spent about $9 less than normal. Not bad, but nothing to write home (or blog) about.

So it worked out quite well for us in this situation (we could have saved even more money if I thought to link our purchase through a rewards program such as Upromise.com or Ebates.com). Sure, it would have been cheaper just to eat at home, but there are going to be times when we eat out, so we might as well save some money when we do.

If you use Restaurant.com, keep in mind that (1) each restaurant may different requirements; (2) you'll likely pay a set gratuity no matter the level of service received (our service was lacking); and 3) you may have to order something you wouldn't normally to meet the dollar-amount requirement.

On the flip side, if you can score a 90% discount on an already 60%-off gift certificate, you'll leave the restaurant with more money in your pocket and perhaps a bag of leftovers too.

Posted by Matthew at 12:21 PM | Comments (0) | TrackBack
Category(s): Family Finances

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October issue of SMI just released

The October 2009 issue of the SMI newsletter has just been posted to the website.

This month, we continue our exploration of the inflation/deflation quandary and weigh in with some important potential consequences for bond investors. We also delve into the details of holding gold or other precious metals in an IRA account.

With students of all ages now back in school, we also turn our attention this month to the college issue — a financial challenge of increasing proportions. Our cover article examines whether a college education is still worth the investment. We also take a look at the new Income-Based Repayment program for graduates trying to figure out the best way to repay their student loan debt.

All of this, and much more, is available now for SMI web members.

Becoming a member is also the only way to gain access to SMI's Fund Upgrading recommendations...the same strategy that has helped SMI readers earn 7.4% per year over the past 10 years (thru 8/31/09) during a decade when the stock market overall has returned just 0.3% per year.

So what are you waiting for? Become an SMI web member today!

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Category(s): SMI General Announcements

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MMF guarantee program ends

On September 16, 2008 the Reserve Primary Fund "broke the buck" and closed the day with a value of less than $1 per share, a huge no-no for money market funds. Over the next two days, 22% of all assets in institutional prime money-market funds were pulled by investors, and overall roughly 7% of all assets held by the money-market fund industry were redeemed during those 48 hours. It was, as we've referred to it here recently, a largely invisible (because it mostly happened electronically) — but still very real — modern day run on the banking system.

As a response to this rapidly developing crisis, the federal government stepped in on September 19 and guaranteed all money market fund deposits, subject to some modest restrictions. That largely stopped the panic.

A year has now passed since that program was put in place, and the Treasury Department has decided the system is healthy enough now to let the guarantee program expire.

While that's certainly a good thing — both in terms of the crisis dying down to where it's no longer necessary and the general principle of getting the government out of the normal functioning of the markets — it does make me wonder how much of a lingering presence these programs will have going forward. Specifically, while the government backstop is being formally eliminated today, is there any real question what would happen if the same conditions emerged again next month, or next year? Does that implicit guarantee make market participants behave differently than they would have before? I'd have to think it does.

Solving that problem is going to be a difficult task, for sure.

Posted by Mark at 3:37 PM | Comments (0) | TrackBack
Category(s): Current Market Events

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Meet James Turk

In my August cover article, "A Dollar in Danger Leads Many to Gold," I explained why higher inflation seems likely, why having some exposure to gold in one's portfolio is reasonable, and briefly looked at how much of one's assets might be allocated to gold.

In September, I followed with "A Road Map for Investing in Gold," where I discussed five ways to invest in gold should one wish — the first three involve owning gold bullion directly, the last two represent indirect avenues of ownership. I explain why I recommend direct ownership for those who want to start adding gold to their other investments.

One of the organizations I recommended was GoldMoney.com. It is a low-cost vehicle for those who wish to accumulate gold bullion via dollar-cost-averaging. James Turk is the founder of that organization.

In these four brief videos, James addresses the UK Silver Investment Summit on the topic "Factors That Will Drive Precious Metals' Bull Market."

The videos are from last year and so are slightly dated, but they do a good job of introducing you to James and his views on the gold and silver markets. In Part 4, he answers a question concerning ETFs and why he feels they are more suitable for traders than for long-term accumulators.

Posted by Austin at 5:14 PM | Comments (0) | TrackBack
Category(s): Inflation Watch

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A year ago today...

Today marks the unhappy anniversary of the slide into financial panic. While the financial landscape may not be in great shape today, I think most would agree that things could be a whole lot worse. In fact, I'd guess that if we had taken a reader survey 50 weeks ago, many/most probably would have expected conditions to be worse today than they actually are.

Going into last September 15, conditions had been rocky for a while, and obviously the big-picture issues (like falling housing prices, bad subprime debt, leverage and derivatives) had been festering for quite some time. But it was the government's decision to allow Lehman Brothers to file for bankruptcy a year ago today that marked the turning of the corner into a full-fledged financial panic. In the few days that followed, AIG would be taken over by the government, Merrill Lynch would be forcibly folded into Bank of America, and a money market fund breaking the buck would start an invisible, but very real, run on the banking system. (It's also pretty easy to make at least a reasonable argument that the Presidential election turned on the events of that fateful day/week as well.)

We've talked about many of these events and their implications over the past year, and while part of me would like to stop and revisit them, we've got a newsletter deadline staring at us at the end of this week. So our energies are required elsewhere for the next few days.

Still, I couldn't let the anniversary of this momentous shift in the financial system pass without a word. There are so many lessons to tease out of the events of the past year, but one stands out from the rest in my view. And that is simply the importance of investing with a long-term plan in mind.

If ever a case could have been made for chucking your long-term plan and reacting in the face of seemingly game-changing events, it would have been so this past year. And in fact, for the next several months after last September 15, staying the course looked like a decidedly bad move. But as we kept reminding readers, the key question wasn't where would stock prices be in a month, but where would they be in five to ten years?

Six months after last September, when stocks were bottoming in early March, it was hard to believe they could recover even within that time frame. Yet here we are, a year later, and our losses no longer look insurmountable. While the market itself is still off by double digits, Upgraders who stayed the course through thick and thin are back to "mild loss" levels. Morningstar shows the SMI Fund (SMIFX), which is also a useful proxy for newsletter upgrading, down just -7.30% over the past year (through last night's close; note the performance reported at this Morningstar page changes daily). Morningstar shows the more conservatively-run SMI Managed Volatility fund (SMIVX) down just -6.69% over the past year, with significantly less volatility along the way.

If an investor didn't know how those particular 6.7%-7.3% losses were realized, they likely wouldn't even blink at one-year losses in that range.

And that's exactly the point. Losses like we saw last winter can materialize faster and cut further than anyone expects. And rallies like we've experienced the past six months can do the same thing, just in the opposite direction. Trying to time those moves is an exceedingly difficult exercise. Just ask the countless investors today with money sitting on the sidelines that was pulled out of stocks at some point during the past year.

It's been a wild ride for investors, enough to reveal to some investors that they really can't stomach the level of stock market exposure they had previously planned on. That's a reasonable lesson to take away from the events of the past year. With our losses back to levels that no longer seem so threatening, it's worth revisiting the events and accompanying emotions of the past year, in an effort to learn how we can better prepare for and handle future periods of extreme market volatility.

An SMI subscription or web membership can help you work through that process and emerge with a rock-solid long-term investing plan in place. To take the first step of that journey, sign up today.

Posted by Mark at 2:48 PM | Comments (0) | TrackBack
Category(s): Current Market Events

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WSJ quotes one of our own

Congratulations to Jenny Migdal, long-time SMI subscriber (perhaps a charter member?) and recent guest author of our May article on Women and Social Security. Jenny was quoted in the Wall Street Journal's "Practice Management" column last week:

Jenny Migdal, a CFP with Forthright Financial Planning in Albuquerque, N.M., tells clients she shops regularly at discount and warehouse stores. One client also started purchasing printer ink from Amazon.com after Migdal mentioned the discounts she has found there.

This summer, Migdal tried an experiment she called "My closet isn't getting any bigger!" She wore a different outfit each day and didn't run out of combinations until mid-August, though she did wash and wear the same pair of trousers a couple times. Unworn clothes in good condition went to organizations that provide professional wear for women.

Migdal plans to discuss the take-away lessons with clients, including: don't shop because you're bored.

Jenny posted this follow-up about the interview on the SMI message boards:

When asked to provide comments about whether I share anything personal with clients, I said I share my whole life — teaching kids about money, wanting a new car (cars), but keeping the old ones that work well, bad investments that my husband wanted to make and how we laugh about those.

Sadly, the part where I said that we try to live on half of our income in order to save aggressively and give generously didn't make it. I think that's because she wanted to know how much money my husband made, with the implication being that if one is "rich enough," one can live on half of anything. I told her we had been living that way for 20 years, but it didn't make the cut.

Great job Jenny!

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Category(s): Family Finances

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Weak recovery = strong stock gains?

According to columnist Jon Markman, up is down and down is up:

Investors who are worried that the economy won't advance fast enough or far enough to justify a 15% rise in the stock market this year have it all wrong. Stocks have actually been rising because the coming recovery from last year's wipeout is expected to be slow and weak, rather than fast and furious.

If that seems backwards to you, I encourage you to read his full explanation. In a nutshell, he argues that corporate earnings and global economic growth aren't the primary market movers over the short term. Instead, interest rates, inflation, and sentiment are the keys, with government policy also playing an important role. When those factors align as they have, and continue to, the market can advance much faster and further than most expect, even in the face of a sluggish economic recovery.

Because the economic recovery continues to be so tepid, Markman thinks the market could stay in this "sweet spot" for some time yet. Quoting from another article he wrote recently:

Every time that a 12-month-average buy signal has been given after a bear market of a year or more, the ensuing up move has itself lasted at least a year — and more often three or four.

The primary reason: The government and central bank response to a calamity like the Lehman Bros. collapse and panic is typically so powerful and over the top that the monetary infusion cycle — fiscal stimulus and superlow interest rates — that ensues is much more persistent than anyone expects.

Perma-bull? Hardly. Unrealistic stock promoter? I don't think so. Markman actually believes we're in a secular bear market — have been for almost 10 years now. But within that long-term bear market, he says we should continue to expect big cycles. 2000-2002 was a big bearish cycle, followed by the 2003-2007 bullish cycle. We had a huge bearish move over the next 18 months, and now he thinks we're primed for another significant leg up, much more significant than most are allowing for.

And he thinks the very fact that many investors are having so much trouble accepting that possibility makes it that much more likely to happen. Bull markets love to climb a wall of worry, and there's plenty of worry still out there to climb. Read his full article(s) and see what you think.

Posted by Austin at 3:59 PM | Comments (0) | TrackBack
Category(s): Current Market Events

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Gov't up 40% on Citi share conversion

Here's a random bit of good news from the Wall Street Journal.

Citigroup Shares: Treasury is up Almost $10 Billion Since Conversion:

UBS analysts figure that Geithner & Co. are currently in the money to the tune of some $10 billion, since they converted $25 billion dollars in preferred shares — out of a $52 billion preferred stake — at a price of $3.25. "Each penny increase in the stock price produces a $76 [million] unrealized gain," wrote UBS' Glenn Schorr in a note out early Friday. Citi shares are currently trading around $4.70, since the end of July they’re up roughly 48%. ...

Oh, and besides the cool $10 billion Treasury stands to net, Schorr points out that the government still has some has $27 billion in preferred shares that Citi needs to repay at some point, which could represent another $2 billion or so in annual return.

You may recall that back in July we noted the government had done quite well when Goldman Sachs repaid its TARP money also, so at least in some cases the taxpayers are earning some solid returns on these bailout/loans.

Posted by Mark at 3:24 PM | Comments (0) | TrackBack
Category(s): Economy

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September is here — should you be nervous?

We're just two days into September, but already two mutually-reinforcing things have happened:

1. A plethora of "September is the worst month for the market" news items have been generated; and
2. The market took a dive on the first day of the month, as if to announce its arrival!

Here's the background: September does in fact have a well-earned reputation as the worst month for the stock market.

And it's not just the long-term averages providing reason to get antsy. Some would wonder if the long-term averages are skewed by a handful of really bad years. If so, that would seem to imply that maybe years when stocks are rallying are immune to this mysterious September effect, right?

Wrong. As this article points out, years when stocks were up year-to-date, up from June-August, and up in August by itself actually produced worse than usual Septembers. In fact, September saw losses in all but 3 of the 17 instances that met that "markets have been rallying" description (though in fairness, the average September loss was just 1.73%, hardly devastating).

What's behind this September trend? No one really has put forth a compelling explanation as to why stocks tend to struggle so much in September. One plausible explanation has to do with institutional investors selling in order to take losses before their year-ends, most of which occur either Sept 30 or Oct 31.

Others argue that as the pattern has become more widely known, it has become something of a self-fulfilling prophecy.

While stocks have tended to perform poorly in Septembers past, another market has fared very well in that month: Gold. In fact, over the past two decades, September has been the strongest month for gold, rising an average of 3.4% for the month and finishing with gains in 16 of the past 20 years.

What should you make of all this? Probably very little. Valid historical pattern or not, the losses we suffered yesterday on Sept 1 already exceed the average loss for past Septembers. So you could just as easily argue that on average, we should expect the rest of the month to be flat to slightly positive.

Better yet, don't sweat what's likely to happen over the next four weeks. Keep your investment gaze appropriately fixed on the distant horizon (at least five years). When you do that, the performance of the next 30 days looks like a tiny blip.

If anything, those who have been surprised at the rally's strength might look to any September weakness as a potential buying opportunity. The market has been going up for six months now without experiencing any type of significant pullback. Market sentiment has gotten quite bullish. Several factors seem to be aligned for a pause or pullback.

So if you've had money on the sidelines that you've been itching to get back into the market as you watched this rally go up, up, and away, September could well provide a decent entry point. If that's you, thinking through what that looks like in advance will help you be more likely to actually pull the trigger should the opportunity present itself.

For everyone else, sit tight and don't get spooked by all the "September is bad for the markets" hype blowing around this week. It is in statistical terms. But the reality is that these average losses for the month are pretty small numbers — smaller than what we've already had delivered in the first two days of the month. So stick with your plan and ignore the headlines. Maybe this September the market will be up, maybe it'll be down, but five years from now you're not likely to remember one way or the other.

Posted by Mark at 5:06 PM | Comments (0) | TrackBack
Category(s): Current Market Events

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SMI makes new sector recommendation after 19.3% gain

We're making a change today within one of SMI's most successful Advanced Strategies. The current holding in our Sector Rotation strategy has done well for us over the four months we've owned it, gaining a total of 19.3%. But over the past month, the fund has slipped a little, at a time when some other sectors have continued to advance rapidly. As a result, the fund has fallen below the quartile and is being replaced this month.

To learn all the details of SMI's Sector Rotation strategy, which has averaged gains of 24.2% per year over the past 19 years (1990-2008), as well as to learn what today's new fund recommendation is, become a Web Member today!

Posted by Mark at 11:08 AM | Comments (0) | TrackBack
Category(s): SMI Advanced Strategies

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