My latest No Load Fund/ETF Tracker has been posted at:

http://www.successful-investment.com/newsletter-archive.php

The bears overpowered the bulls this week and all major indexes ended sharply lower.

Our Trend Tracking Index (TTI) for domestic funds/ETFs has moved to +5.10% above its long-term trend line (red) as the chart below shows:

The international index inched lower to remain +2.14% above its own trend line, keeping us still on the buy side.

For more details, and the latest market commentary, as well as the updated No load Fund/ETF StatSheet, please see the above link.

I guess there is a reason that I called this blog ‘The Wall Street Bully.’ Sometimes it is very difficult for me to silently accept and go along with new ideas that are essentially a different twist simply designed as a new marketing plot with no tangible benefit to the investor; at least not to my way of thinking.

I was reminded of that when I read a story in CNNMoney.com called “Northern Trust Introduces Multi manager Large Cap Fund.” The idea behind this scheme is to set up a manager of managers who allocates “assets to four sub-advisers chosen for their distinct investment style in selecting stocks for their portion of the Fund’s portfolio. This approach is designed to offer the optimal combination of risk and return characteristics, resulting in a style-neutral diversified fund.”

A casual reader could get the impression that this type of fund will be superior and can be held without consideration to market behavior. Wrong! These funds will fluctuate and head south (translation: lose money) in a bear market just as much as any other equity fund. It does not matter how many managers you put at the helm of this undertaking, the general direction of the market is the force that determines performance – nothing else.

My weekly StatSheet tracks 6 of Northern Trust’s funds as well, with the top ones listed in the number 52 spot (NOEQX and NOMCX) out of 596. NSGRX follows closely behind, but the other 3, which shall remain nameless, have been underperformers.

My point is the same over and over again: Make sure you have a plan to protect yourself from downside risk even if you invest in multi manager funds. The current summer/fall and hopefully year-end rebound rally will not last forever.

Higher oil prices and a mixed earnings picture had the bears take charge for the last couple of days. Not helping the bulls’ cause was the realization that the housing debacle might be a drag on the economy for some time to come.

Below please find the link to the most recent ETF Master list, which has been updated with yesterday’s closing prices. This will enable you to work with more recent data. You can download the file at:

http://www.successful-investment.com/SSTables/ETFMaster101607.pdf

Our Trend Tracking Indexes (TTIs) came off their lofty levels but still remain in bullish territory with the domestic and international one sitting above their long term trend lines by +5.70% and +3.50% respectively.

MarketWatch featured a story called “Tide’s Out – Fund Investors have wisely stopped performance surfing.” It goes into detail about the “dangerous” habit of always trying to own funds that always top the short-term performance charts.

It’s media ignorance at its finest since the assumptions are flawed due to the fact that not every investor uses the brainless buy and hold philosophy. In my view, the most dangerous habit when investing is to be exposed to a fund/ETF that does ‘not’ perform. There is absolutely nothing wrong with being in top performers as long as you have an exit strategy in place via a trailing sell stop discipline.

After all, it’s only performance that propels your portfolio forward and not staying put in funds and ETFs that represent the bottom of the barrel, which includes about 80% of all offerings.

The story cites investors who loaded up on top tech funds only to get killed during the subsequent bear market. That has been my argument for some 20 years. Any investment you get into, whether it’s a high flier or an average performer, requires you to have a plan to get out. If you don’t, then this following formula will repeat itself over and over in your investment life when facing a bear market:

Buy and Hold = Investment Losses to the second power (humor attempt)

Doing the same thing over and over and expecting a different result each time is in some professions called insanity.

Many readers have expressed regret about not having ETF choices available in their 401k plans. A lot is being done to change that in the future although the mutual fund companies handling most of the custodial functions like the status quo.

SmartMoney’s article “Coming Soon: ETFs in your 401k” sheds some light on the dominant positions that the major players like Fidelity, Vanguard, T.Rowe Price and Principal have. It’s nothing but a cash cow for them with more than 2 trillion sitting in 401k type of accounts. This privilege allows them to keep collecting fees year after year without performance considerations.

In my advisor practice, I have seen my share of 401k plans from clients who left their jobs and were looking to roll over their assets into an IRA. Most of the 401k choices weren’t worth the paper they were written on or seemed to have been picked out by a low level clerk who played darts.

From my experience, about 2% of the 401k plans I have seen offered a reasonable amount of fund choices that were worthwhile and occasionally the custodian actually made an effort to offer new fund selections every few years.

Most of them, however, are the bottom of the barrel. I have a client who works for a Fortune 500 company, which shall remain nameless, and whose 401k I manage.

It’s the saddest and most incompetent of all plans I have ever seen. So, yes, new companies like BenefitStreet, Invest N Retire, Wisdom Tree and others trying to break the old established rules and offer a fresh approach along with new choices will only benefit the 401k participant who, in my view, is being taken advantage of by the old system.

For many years, when visiting Hamburg, Germany, I have stayed in a small hotel near my mother’s apartment.

The set up is unique and unlike anything you see nowadays when traveling in a world of mega hotels, poor service and employees who do not care nor do they speak your language. The Condi Hotel in Hamburg features a grand number of 35 rooms and has their own bakery and café.

Yes, you read that right; it’s a small place where you love to go because everybody knows your name. From the owner, to the waitresses in the breakfast room everyone is friendly, in good spirits and ready to help. The maids who clean up your room actually are natives and speak your language–a rarity in itself. A special request is handled quickly and efficiently by them without interaction with the front desk.

The breakfast buffet spread is something I look forward to all year. Freshly baked rolls and a variety of German meats and cheeses along with boiled eggs, juices and fruit make this a perfect way to start your day. Best of all, it’s included in the price of your stay.

Some things are still based on the honor system. Many business people frequent this hotel, usually only for a couple of nights. Despite the number of new guests passing through, you can enter the unattended lobby at any time of the night, where you may find some freshly baked cookies, a tray with clean beer and wine glasses and yes, open access to a refrigerator filled with adult beverages, mainly superb locally brewed beer and an assortment of small bottles of wine.

You take what you like up to your room and leave a note for the front desk advising them of your room number and what you took. They will then add it to your bill upon check out. It’s service at its best along with trust in the honesty and integrity of the patrons.

Too bad that in today’s society this is an exception and can’t be the rule for conducting business.