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"A changing landscape"

This simple observation serves as the basis for Sound Mind Investing's highly successful Fund Upgrading strategy: even though market conditions are always changing, fund managers rarely change their investing approach.

That explains why a manager who is hugely successful under one set of conditions can seem dreadfully inept under another. If the game the manager knows how to play (let's say he or she is an expert in small-cap growth companies) is the same game the market is playing, success occurs. But if the market changes to a different game (a preference for large value companies, for example), it's difficult for that manager's fund to compete effectively.

The always-morphing nature of the market is underscored by last week's USA Today article headlined, "Top 10 S&P 500 Stocks Change From 2007 Peak." (Because all the stocks mentioned are near the top of the S&P 500, there is a rough commonality of company size in these comparisons; but, as the article makes plain, even within the general area of large companies, relative performance is by no means static.)

Beneath the surface of the market's steady advance, a dramatic race is taking place among leaders vying to become the USA's most-valuable company.

The Standard & Poor's 500 index hangs near bull market highs, having risen 4% this year and 66% from its 2009 bear market low. Four of its most 10 most-valuable companies — Wal-Mart, Apple, JPMorgan Chase and Berkshire Hathaway — weren't among the top 10 at the market's peak in 2007, according to data from S&P's Capital IQ....

"It's a changing landscape," says Jack Ablin of Harris Private Bank. "It's amazing."...

The biggest gainer among the top ranks is Apple, which appeared close to collapse 10 years ago but is now the fourth-most-valuable company in the S&P 500, beating out Warren Buffett's Berkshire Hathaway and General Electric....

AT&T and Citigroup have consistently been among the most-valuable companies. Both were in the top 10 at the 2007 peak. Now, though, Citigroup is ranked No. 21...and AT&T is No. 14.

Time passes, things change. By leading you to funds that are performing well across several risk categories, our Upgrading strategy can help you stay on top of changing conditions. Indeed, change becomes your ally in growing the value of your holdings.

This is why Upgrading experienced a total gain of 142% over the past 11 years (1999 though 2009), while the overall market (as measured by the Wilshire 5000) gained only 21.5%.

Not an SMI subscriber yet? Today's a great day to sign up and learn more about how Upgrading can help you make the most of your investment money.

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