Has Anyone Tried NoLoadFundX?

[Patrick]

Have any of you tried the NoLoad FundX strategy? If so, how were your returns? They show that since 2000 their portfolio would have returned 103% vs. VFINX's (Vanguard's S&P 500 Index Fund) 20% (buy and hold) on a cumulative basis. That's a big difference that's worth considering.

Here's the link to their website: NoLoad FundX | Mutual Fund Perfomance | Mutual Fund Investment Strategy

 

[cute fuzzy bunny]

The fun part is figuring out which fund, 8 years hence, will do 103%. And if Noload FundX will return -103% or not during the same time period.

 

[samclem]

No direct experience on my part, just a well-developed sense of skepticism about newsletters.
-- Hmm. Top results of the newsletters ranked by Hulbert. I suppose one of the chimps had to have the best results after 20 throws--is that the most skilled chimp?
--If thse guys could really outperform the market, would they be selling a newsletter or making mega-billions by executing their strategy for others for a share of the take. Maybe on high margin or using options for a real boost (hey--they trust their strategy, right?)
-- Is the big money (state pension funds, private retirement funds, etc) buying/selling off the NoLoadFundX tip sheet? Why not?

Patrick! Hear us, lad! Don't go over to the dark side!

 

[DblDoc]

Reading the fine print one finds:

"Although fund imposed redemption fees are factored into the results, brokerage fees, taxes and any outside management fees such as those imposed by DAL Investment Company are not. If applicable, these additional costs would have a negative impact on one's actual returns."

Translation: In your real world portfolio YMMV...

DD

 

[ERD50]

Try searching the term. IIRC, we discussed this a while back, and the funds did no better than a comparably volatile index fund.

-ERD50

 

[Patrick]

The fun part is figuring out which fund, 8 years hence, will do 103%. And if Noload FundX will return -103% or not during the same time period.

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.

 

[Patrick]

Try searching the term. IIRC, we discussed this a while back, and the funds did no better than a comparably volatile index fund.

-ERD50

OK, I found the one where you guys annihilated the new poster. I'll read through it. Thanks.

 

[cute fuzzy bunny]

Yeah I know what it is. I was momentum investing decades ago.

In short, these work great providing the momentum keeps going, that you know exactly when its going to stop, and when you shift your money into funds that actually proceed to do better.

There were a lot of geniuses in the late 90's playing with momentum who quite quickly became idiots.

If it was easy or even doable to know when the ride was going to stop or which other ride was about to start, we wouldnt have 100 years of data demonstrating that only a few active managers ever beat a simple market index, over a period of time. Random chance would have better numbers than the reality.

So in short, putting your newsletter advised hands or employing an expert to manage your funds produces worse results (historically) than throwing darts at the WSJ.

See: http://www.early-retirement.org/forums/f28/book-report-four-pillars-investing-14508.html

Which is not to say that a little money cant be met by preying on peoples emotions and buying things that are beaten up that nobody wants and the reasoning is more emotional than financial...or jumping on a train thats about to go off the tracks. Just dont go to the same well too many times and do get off the train before it derails.

 

[TickTock]

Have any of you tried the NoLoad FundX strategy? If so, how were your returns? They show that since 2000 their portfolio would have returned 103% vs. VFINX's (Vanguard's S&P 500 Index Fund) 20% (buy and hold) on a cumulative basis. That's a big difference that's worth considering.

Okay, I haven't gone back and tried to track how their investments have shifted, but for FUNDX Upgrader Fund since it's inception in 11/01, the current mix in domestic/foreign is about 25%/75% - taking Vanguard's Total Stock Market Index and Total Intenational Stock Market Index at the same ratio over that period would have given you about a 2% better annualized return.

What that doesn't tell you is if FUNDX will shift more towards US stocks when they outperform international funds. I'm sceptical, but it is possible.

 

[ERD50]

Okay, I haven't gone back and tried to track how their investments have shifted, but for FUNDX Upgrader Fund since it's inception in 11/01, the current mix in domestic/foreign is about 25%/75% -

TickTock - I think this was the same (IMO - faulty) reasoning being used in some of the other posts on these funds.

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.

When you do that (at least at the time of that previous thread), these momentum funds didn't look so great. You would be getting better returns with the indexes, and the same (or slightly less) volatility.

-ERD50

 

[Patrick]

Okay, I haven't gone back and tried to track how their investments have shifted, but for FUNDX Upgrader Fund since it's inception in 11/01, the current mix in domestic/foreign is about 25%/75% - taking Vanguard's Total Stock Market Index and Total Intenational Stock Market Index at the same ratio over that period would have given you about a 2% better annualized return.

What that doesn't tell you is if FUNDX will shift more towards US stocks when they outperform international funds. I'm sceptical, but it is possible.

So are you saying that the fund is the same as the newsletter strategy?

 

[twaddle]

More fuel for the fire here:

Raddr's Early Retirement and Financial Strategy Board :: View topic - 'Ignore momentum at your peril'

And here:

Millionaire Mommy Next Door: How I Make Money Following the Herd: The Trend is My Friend

 

[lightwaves]

I signed up the the fundx newsletter in January based on a recommendation from a friend who has used it for over 10 years. He told me that he has beaten the S&P routinely during that time. I plan to test it out for a year by purchasing top performing funds in the newsletter to see how it goes. I think there is validity to momentum investing but the proof will be in the results I obtain.

 

[ERD50]

I signed up the the fundx newsletter in January based on a recommendation from a friend who has used it for over 10 years. He told me that he has beaten the S&P routinely during that time. I plan to test it out for a year by purchasing top performing funds in the newsletter to see how it goes. I think there is validity to momentum investing but the proof will be in the results I obtain.

It may beat the S&P, but you could do that w/o the newsletter. Just buy a no-load index:

FundX Upgrader Report (FUNDX) | Snapshot

As you can see here, FUNDX is *more* volatile than the S&P500. So the S&P500 is not an appropriate benchmark.

FUNDX: Basic Chart for FUND X UPGRADER FUND - Yahoo! Finance

-ERD50

 

[cute fuzzy bunny]

I beat the S&P 500 every year since 1994. Kicked its ass pretty good from 1998-current.

Anyone wanna buy my newsletter?

 

[lightwaves]

My friend, using the newsletter, got a return of 18% last year (2007) versus the S&P returned in the neighborhood of 5+%. There are mutual fund managers who beat the S&P for periods of time and I hope to take advantage of that.

 

[cute fuzzy bunny]

Me too!

Tell me which ones are going to beat the indexes for the next 5 years!

 

[Maurice]

No direct experience on my part, just a --If thse guys could really outperform the market, would they be selling a newsletter or making mega-billions by executing their strategy for others for a share of the take.

I would think '2 and 20' outperforms newsletter subscription fees...

 

[DblDoc]

My friend, using the newsletter, got a return of 18% last year (2007) versus the S&P returned in the neighborhood of 5+%. There are mutual fund managers who beat the S&P for periods of time and I hope to take advantage of that.

All of you who have an entire portfolio made up of the S&P 500 raise your hand...

DD

 

[cute fuzzy bunny]

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....?

 

[chinaco]

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.

 

[TickTock]

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?

 

[TickTock]

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.

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.

 

[Patrick]

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.

 

[Patrick]

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.