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Old 04-06-2008, 05:16 AM   #21
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I didn't bother to read their literature... But as a few others stated... it looks like the big Mo' style of investing.

I once invested in single funds that manage with a mo investment style. I am not a fan of momentum investing. Some claim it works.... But I have a more conservative POV.
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Old 04-06-2008, 06:47 PM   #22
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So are you saying that the fund is the same as the newsletter strategy?
No. I can do a quick check on a fund much easier than on a newsletter. If they're based on the same methodology, why should their results look widely different?
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Old 04-06-2008, 06:53 PM   #23
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TickTock - I think this was the same (IMO - faulty) reasoning being used in some of the other posts on these funds.
It quite possibly is faulty. I scanned quickly through their current holdings, plus looked at the Yahoo analysis, and Total US / Total International looked reasonably close to me, but I could be wrong.

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I think it is a mistake to try to match the fund to an index by simply using the mix of domestic/foreign. There are many, many choices and levels of risk within the broad category of 'domestic' and 'foreign'. A better way (and what MorningStar appears to do), is to match performance to an index with a similar volatility profile. To me, that is a 'rubber meets the road' comparison.
I agree, 'domestic' and 'foreign' are too broad. I'd like to chop it up like Morningstar - small/medium/large against value/blend/growth for nine categories. Plus REITS and other sectors.

FUNDX's literature states that their objective is to beat the S&P500 index with similar volatility. The thing is, over the past six years anyone could have beaten th S&P500 by investing in Total Foreign. Shrug.
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Old 04-06-2008, 09:07 PM   #24
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I beat the S&P 500 every year since 1994. Kicked its ass pretty good from 1998-current.

Anyone wanna buy my newsletter?
Maybe. Tell me more.
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Old 04-06-2008, 09:11 PM   #25
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Better still, look at vanguards REIT fund kicking fundx's ass...

Now why wouldnt you just make a big bet on that to continue for the next 10 years at a much lower cost?

Hmmmmm....?
You would have to know in advance that the REIT fund would perform like it has. FundX has been changing funds over the years according to its strategy.
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Old 04-06-2008, 09:14 PM   #26
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FUNDX's literature states that their objective is to beat the S&P500 index with similar volatility. The thing is, over the past six years anyone could have beaten th S&P500 by investing in Total Foreign. Shrug.
How do you know in advance to invest in Total Foreign?
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Old 04-06-2008, 10:38 PM   #27
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I think the point here is that fundx appears to lower the risk by attempting to be in the funds that are performing the best at the time regardless of sector. It is not trying to guess at which sector is going to be the right one. Yes, if you guess right, you may make more money than fundx but with much greater risk that you may be wrong if you try to target a narrow sector and hope for the best. The way I look at it is to get a decent return (greater than the S & P average) while keeping my over all risk as low as possible.
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Old 04-07-2008, 08:20 AM   #28
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You would have to know in advance that the REIT fund would perform like it has. FundX has been changing funds over the years according to its strategy.
How do you know in advance that the things fundx buys are going to perform as well as the things fundx has picked in the past, especially when its past is primarily a bull market where almost everything went up almost all the time?

What exactly is the measured benefit of "the strategy" vs the measured benefit of that bull market?

Most distributed asset allocation plans using 4-5 different asset classes composed of cheap passive index funds produced a similar or better return with less volatility, no need to change funds and incur huge capital gains ( or losses ) and much more tax efficiency.

To pick a funds pure bull market record, compare it to an index it doesnt mirror, and claim a successful strategy isnt good investing.

But then again, neither is the idea of momentum investing. You're betting that you know what the short to medium term mass psychological reaction of the market investors is going to be for a set of asset classes. Good luck with that when they turn fickle.

Its gambling, not investing.
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Old 04-07-2008, 08:32 AM   #29
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Compare fundx to vanguards global equity fund...something with a little more variety and a closer risk profile than the s&p500. Hint: the difference causing the advantage is the expense ratio and tax efficiency. Otherwise they move in near lockstep.
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File Type: jpg global equity fundx.JPG (105.1 KB, 7 views)
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Old 04-07-2008, 08:47 AM   #30
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I think the point here is that fundx appears to lower the risk by attempting to be in the funds that are performing the best at the time regardless of sector. It is not trying to guess at which sector is going to be the right one.

Personally, I don't care so much what their strategy is - I care about results.

Quote:
The way I look at it is to get a decent return (greater than the S & P average) while keeping my over all risk as low as possible.
Problem is, FUNDX does not meet that criteria. It is more volatile than the S&P, so it makes no sense to compare performance to the S&P.

As I pointed out above, Morningstar says that it's volatility more closely matched the MCSI EAFE. And FUNDX underperforms that index.

Here you go - on a one year period, FUNDX underperformed BOTH the S&P and the MSCI EAFE. Higher highs AND lower lows. IOTW, higher volatility.

EFA: Basic Chart for ISHARES MSCI EAFE FD - Yahoo! Finance



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Old 04-07-2008, 08:55 AM   #31
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What do you think of the following discussion of fundx performance from their web site:

NoLoad FundX | Mutual Fund Perfomance | Mutual Fund Investment Strategy
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Old 04-07-2008, 08:57 AM   #32
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Another thing those yahoo charts don't reflect - yields. Those are graphs of NAV, and a little extra yield will make a diff over a longer time period.

EFA (iShares MSCI EAFE Index) - Yield:2.75%
FUNDX - Yield:2.07%

And, in a taxable account, there is this:


EFA (iShares MSCI EAFE Index) - Annual Holdings Turnover 5%
FUNDX - Annual Holdings Turnover 84.00%

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Old 04-07-2008, 09:00 AM   #33
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To pick a funds pure bull market record . . .
I think the fund's record included the end of the dotcom bear market. The reason that time frame is used is that the fund's inception date was 11/02/2001.

Anyway, here are some stats on the newsletter from 1980 to 2006. It has a few bear markets in it.

Welcome to NoLoad Fund*X
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Old 04-07-2008, 09:08 AM   #34
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And, in a taxable account, there is this:

FUNDX - Annual Holdings Turnover 84.00%

-ERD50
So are there any tax strategies to get around this, other than doing the trading in a tax-deferred account?

Does it make a difference at the other end when we have to pay taxes on deferred money anyway? :confused:
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Old 04-07-2008, 09:12 AM   #35
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Here you go - on a one year period, FUNDX underperformed BOTH the S&P and the MSCI EAFE.

-ERD50
If you're buying the individual mutual funds yourself as recommended by the newsletter, you will do better by the percentage of the management fees charged by FundX, since you're no longer paying them, correct?
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Old 04-07-2008, 09:15 AM   #36
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Actually, the strategy is a momentum play - you invest in funds that have done well in the recent past on the assumption that they will continue to do well in the near future. When they stop performing well, you switch to other funds that are doing better at that time.
How is that not "Buying high, and selling low"
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Old 04-07-2008, 09:22 AM   #37
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How is that not "Buying high, and selling low"
Well, I think the idea is to "buy medium and sell higher than that."
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Old 04-07-2008, 09:33 AM   #38
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Seems your mind is made up Patrick. I guess the lure of beating the market is just too hard to avoid even when faced with superior performing, lower risk, cheaper alternatives that require no special skills or newsletters.

Thus, I recommend sinking as much of your money as you see fit into it and let us all know how it works out for you.

Kombat...its about buying into irrational exuberance and riding it for just the right time. Somehow someone thinks they know the right time to get in and get out. With tens of thousands of mutual funds having been unable to do that successfully over a hundred year period. But this time its going to be different.
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Old 04-07-2008, 09:54 AM   #39
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What do you think of the following discussion of fundx performance from their web site:

NoLoad FundX | Mutual Fund Perfomance | Mutual Fund Investment Strategy
Two things:

1) Why can't they duplicate this performance in a mutual fund, so I can just buy it and not need to trade and follow a bunch of funds?

2) They did very well in some years. Great - how do you know which years to be in this fund? Even their star Class 3 has underperformed the EAFE since 2002. If I got in in 2002, I would not be such a happy camper.

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Old 04-07-2008, 11:24 AM   #40
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Seems your mind is made up Patrick. I guess the lure of beating the market is just too hard to avoid even when faced with superior performing, lower risk, cheaper alternatives that require no special skills or newsletters.
No, my mind is not made up, which is why I started this thread. I want to explore the possibility that this may work. Your mind, though, apparently is made up. Please tell me what the superior performing, lower risk, cheaper alternative is and I will consider that also. In addition, I'm interested in your newsletter - please provide additional info. Thanks.
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