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

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

Sideways to upward bias pushed all major market indexes slightly higher.

Our Trend Tracking Index (TTI) for domestic funds moved higher as well and now sits +4.60% above its long-term trend line (red) as the chart below shows:

The international index rallied as well and has now moved to +9.37% above its own trend line, as you can see below:

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

A few days ago, I was discussing the bear market of 2000–2003 with a prospective client, when he pointed out that he actually held on to one fund profitably through the severe downturn.

Really! Even though we avoided most of the bear by being in cash on the sidelines, any fund which has the ability to hold up against the major trend is worth looking at.

Take a look at the chart of PRPFX:

This question is like a two-edged sword, and I am bound to step on somebody’s toes. I think the most important issue in answering that question is what type of investment approach you are using.

If you are one of those Buy-and-Hope followers and always in the market, then, by all means, you want a fund manager with a good track record. Because you hope that he has a way of bailing you out during times of market turmoil.

Dream on! When a bear market hits, such as we’ve seen from 2000 – 2003, all equity funds (and others) tend to go down with utter disrespect to the fund manager in charge.

If, however, you use a trend tracking approach, such as I advocate, then the fund manager is not that important. When you analyze funds based on their momentum figures, a fund manager’s strong performance will be reflected in the underlying price of the fund. It will move up in the (momentum) ranking food chain making it a candidate for a buy.

The bottom line is, whether a manager leaves a fund or not, has no effect on my decision making process. So, when I read articles in MarketWatch that report a change in fund management and ask the investors to be patient and give the new guy a chance, I have to chuckle and wonder who really wrote that piece.

As I said above, in bear markets all equity funds go down. However, that’s not entirely true. One of my readers pointed out a no load fund, which bucked the trend and put on a super performance. In tomorrow’s post, I’ll tell your more about it.

If you are following my trend tracking approach to investing in no load funds and ETfs, you know that I’m a strong advocate of using sell stops.

Obviously, you can’t place sell stops for mutual funds. You need to track them yourself and place the order after your point has been triggered.

What about ETFs?

Should you place your sell stops ahead of time?

In my advisor practice, I only work with day-end prices and ignore the intra-day fluctuations.

Why?

The reason for my sell stop is to get out of a position only if the long-term trend has reversed, which means that I don’t want to be subjected to the minute-by-minute volatility of the markets.

Here’s what reader Kurt experienced:

“I had the stop loss sell points at my broker; unfortunately I seem to be getting stopped out at the worst possible intraday prices. I think I’m just going to execute my sell points myself…No point in showing my hand.”

If you work with day-end pricing only, there is no reason to place your order ahead of time. For one, if the markets move up, the sell stop point changes and you have to change your order as well.

Two, let’s look at what happens to your pre-set sell stop. It goes to the trading floor and becomes part of a trader’s stack of orders, which he executes as per instructions.

Now remember, this trader also scalps the market for his own account. Hmm, do you think him knowing where some of the buy or sell stops will be triggered, gives him an edge? I’m not saying that anything unethical would ever happen on Wall Street’s trading floors, but it makes you think, doesn’t it?

ETFs have been one of the great additions to the investment arena over the past few years. In my advisor practice, I use them along with no load mutual funds to construct our trend tracking portfolios.

However, new ETFs are being introduced at an alarming rate. This year, almost 100 new ones have been brought to the market. It’s getting to a point where every sector gets sliced and diced into more micro sectors.

Some of these new micro ETFs are small, have low volume and are extremely volatile. In other words, investing in some of them will be no different than you placing bets in Las Vegas, except you are saving on the travel costs.

Morningstar just came out with an article on the subject called “Fund Frenzy: ETFs Out Of Control.” You can read the entire story at:

http://articles.moneycentral.msn.com/Investing/Morningstar/FundFrenzyETFsOutOfControl.aspx

Just because there are hundreds of ETFs available, which are all competing for your investment dollars, doesn’t mean they are right for you. Use common sense and the same guidelines you would when selecting a no load mutual fund.

While IRAs are important financial instruments to save and invest on a tax-deferred basis in order to grow your retirement dollars, there are many intricacies that you may not be aware of.

While most of them may not be crucial to you at this time, there are 5 myths that might help you as you travel the road to retirement.

You can read the details at the Motley Fool at:

http://www.fool.com/personal-finance/general/2007/04/07/5-ira-myths.aspx