My fund strategy?

I've recently discovered mutual funds, and I have a little portfolio in my
IRA. I know the usual advice like don't try to time the market, put money
away at regular intervals. And sure, that sounds good. But when I do put
money away, I was thinking of weighting the distribution to each fund by
the year's average over the current price, putting more money into an
individual fund when it's low and less when it's high. I am assuming they
will fluctuate but on average increase in value over the decades
before I use it.

Is something like that known of and used? Does it actually make any
difference versus a fixed amount in each fund? Are there better
strategies to consider?
--
"Don't try to teach a pig how to sing. You'll waste your time and annoy
the pig."

Re: My fund strategy?

"Gregory L. Hansen" <> wrote in message
news:d63noa$rsq$
>
> I've recently discovered mutual funds, and I have a little portfolio in my
> IRA. I know the usual advice like don't try to time the market, put money
> away at regular intervals. And sure, that sounds good. But when I do put
> money away, I was thinking of weighting the distribution to each fund by
> the year's average over the current price, putting more money into an
> individual fund when it's low and less when it's high. I am assuming they
> will fluctuate but on average increase in value over the decades
> before I use it.
>
> Is something like that known of and used? Does it actually make any
> difference versus a fixed amount in each fund? Are there better
> strategies to consider?


Gregory:

I'm not sure exactly what you are proposing to do. Some people pursue a
strategy called "dollar cost averaging" whereby they put the same amount in
a fund each period which causes them to buy more shares when the price is
lower and fewer shares when the price is higher. Whether or not this works
has been the subject of great debate in this group. It turns out that the
answer depends on whether the market is rising, falling or fluctuating over
the period in question.

Another strategy, which I think you might be proposing, is to use new money
to maintain a particular allocation over time. If a fund goes down, you put
more money into it, etc.

I more or less do this and it seems like it should work over the long-term
but I can't say that I have seen absolute proof that it works.

-herb

Re: My fund strategy?

On Sat, 14 May 2005 02:28:26 +0000 (UTC),
(Gregory L. Hansen) wrote:

>
>I've recently discovered mutual funds, and I have a little portfolio in my
>IRA. I know the usual advice like don't try to time the market, put money
>away at regular intervals. And sure, that sounds good. But when I do put
>money away, I was thinking of weighting the distribution to each fund by
>the year's average over the current price, putting more money into an
>individual fund when it's low and less when it's high. I am assuming they
>will fluctuate but on average increase in value over the decades
>before I use it.
>
>Is something like that known of and used? Does it actually make any
>difference versus a fixed amount in each fund? Are there better
>strategies to consider?

You might take a few days and start with reading some the articles
listed on this site. Then you'll be ready to visit the local library.
Your simple questions will take a long time answer because you have to
figure out the answers that work for you. There is not a one-size that
fits all or even some!



Good luck.

Re: My fund strategy?

Gregory L. Hansen wrote:
> I've recently discovered mutual funds, and I have a little portfolio in my
> IRA. I know the usual advice like don't try to time the market, put money
> away at regular intervals. And sure, that sounds good. But when I do put
> money away, I was thinking of weighting the distribution to each fund by
> the year's average over the current price, putting more money into an
> individual fund when it's low and less when it's high. I am assuming they
> will fluctuate but on average increase in value over the decades
> before I use it.
>
> Is something like that known of and used? Does it actually make any
> difference versus a fixed amount in each fund? Are there better
> strategies to consider?

Yes, this is a good system and there are several published ways of doing
it. These include:

The TWINVEST system given in Chapter 15 of Robert Lichello's "How to
make $1,000,000 in the stock market automatically". This book is in its
fourth edition and has been in print since 1977, a sign that its methods
are actually very good in spite of the slightly silly title. It is also
incredibly cheap at $6.99 USD from most bookshops. The main AIM part of
it is very good too.

The Value Averaging method of Michael Edleson described in a book of
that name from IPC, which I think is out of print but you can probably
turn up a summary of the method on Google somewhere.

Method 3 in Chapter 9 of "Millard on Stocks and Shares" by Brian
Millard, now in Fourth Edition from Wiley. This also does exactly what
you say, relating the amount saved each month to the current price and
average price per share paid to date.

All of these methods will beat Dollar Cost Averaging over any reasonable
time period.

Re: My fund strategy?

In article <d645sv$1e2$>,
David Wilkinson <> wrote:
>Gregory L. Hansen wrote:
>> I've recently discovered mutual funds, and I have a little portfolio in my
>> IRA. I know the usual advice like don't try to time the market, put money
>> away at regular intervals. And sure, that sounds good. But when I do put
>> money away, I was thinking of weighting the distribution to each fund by
>> the year's average over the current price, putting more money into an
>> individual fund when it's low and less when it's high. I am assuming they
>> will fluctuate but on average increase in value over the decades
>> before I use it.
>>
>> Is something like that known of and used? Does it actually make any
>> difference versus a fixed amount in each fund? Are there better
>> strategies to consider?
>
>Yes, this is a good system and there are several published ways of doing
>it. These include:
>
>The TWINVEST system given in Chapter 15 of Robert Lichello's "How to
>make $1,000,000 in the stock market automatically". This book is in its
>fourth edition and has been in print since 1977, a sign that its methods
>are actually very good in spite of the slightly silly title. It is also
>incredibly cheap at $6.99 USD from most bookshops. The main AIM part of
>it is very good too.
>
>The Value Averaging method of Michael Edleson described in a book of
>that name from IPC, which I think is out of print but you can probably
>turn up a summary of the method on Google somewhere.
>
>Method 3 in Chapter 9 of "Millard on Stocks and Shares" by Brian
>Millard, now in Fourth Edition from Wiley. This also does exactly what
>you say, relating the amount saved each month to the current price and
>average price per share paid to date.
>
>All of these methods will beat Dollar Cost Averaging over any reasonable
>time period.

Thanks. The advice I've seen so far seems to universally favor Dollar
Cost Averaging. Maybe because it's easy to follow without doing any
thinking about it-- the best investment strategy is the one that you will
do. But I thought it couldn't be hard to beat. Weighting the dollar
distribution by the yearly/current price seemed like the most
straightforward way to do it, but I can imagine other ways like
(yearly/current)^2, put everything into max(yearly/current), working the
lifelong average return into it, etc. I'd thought about rate of change
and acceleration, but decided that's only meaningful to the day trader;
the rate of the rate of change means nothing when the money is going to
stay in there for thirty years.


--
"In any case, don't stress too much--cortisol inhibits muscular
hypertrophy. " -- Eric Dodd

Re: My fund strategy?

Beware of those who sell books, give seminars, distribute newsletters, etc.
on how to invest. They try to sell ways to beat the market, but yet scant
proof is provided. The EMH cancels out just about all strategic advantages
that may temporarily exist. None exist for very long. The possibilities
going forward are a probability distribution based on thousands if not
millions of variables. The shorter the timeframe, the greater the PD's
standard deviation.


"Gregory L. Hansen" <> wrote in message
news:d651cr$8bh$
> In article <d645sv$1e2$>,
> David Wilkinson <> wrote:
>>Gregory L. Hansen wrote:
>>> I've recently discovered mutual funds, and I have a little portfolio in
>>> my
>>> IRA. I know the usual advice like don't try to time the market, put
>>> money
>>> away at regular intervals. And sure, that sounds good. But when I do
>>> put
>>> money away, I was thinking of weighting the distribution to each fund by
>>> the year's average over the current price, putting more money into an
>>> individual fund when it's low and less when it's high. I am assuming
>>> they
>>> will fluctuate but on average increase in value over the decades
>>> before I use it.
>>>
>>> Is something like that known of and used? Does it actually make any
>>> difference versus a fixed amount in each fund? Are there better
>>> strategies to consider?
>>
>>Yes, this is a good system and there are several published ways of doing
>>it. These include:
>>
>>The TWINVEST system given in Chapter 15 of Robert Lichello's "How to
>>make $1,000,000 in the stock market automatically". This book is in its
>>fourth edition and has been in print since 1977, a sign that its methods
>>are actually very good in spite of the slightly silly title. It is also
>>incredibly cheap at $6.99 USD from most bookshops. The main AIM part of
>>it is very good too.
>>
>>The Value Averaging method of Michael Edleson described in a book of
>>that name from IPC, which I think is out of print but you can probably
>>turn up a summary of the method on Google somewhere.
>>
>>Method 3 in Chapter 9 of "Millard on Stocks and Shares" by Brian
>>Millard, now in Fourth Edition from Wiley. This also does exactly what
>>you say, relating the amount saved each month to the current price and
>>average price per share paid to date.
>>
>>All of these methods will beat Dollar Cost Averaging over any reasonable
>>time period.
>
> Thanks. The advice I've seen so far seems to universally favor Dollar
> Cost Averaging. Maybe because it's easy to follow without doing any
> thinking about it-- the best investment strategy is the one that you will
> do. But I thought it couldn't be hard to beat. Weighting the dollar
> distribution by the yearly/current price seemed like the most
> straightforward way to do it, but I can imagine other ways like
> (yearly/current)^2, put everything into max(yearly/current), working the
> lifelong average return into it, etc. I'd thought about rate of change
> and acceleration, but decided that's only meaningful to the day trader;
> the rate of the rate of change means nothing when the money is going to
> stay in there for thirty years.
>
>
> --
> "In any case, don't stress too much--cortisol inhibits muscular
> hypertrophy. " -- Eric Dodd

Re: My fund strategy?

This strategy has been known and used.
It makes a difference, but in the future no one knows how much or if it
will positive or negative.
There probably are better strategies, but no one knows what they are
NOW.

You see Gregory, the truth is NO ONE KNOWS what the market is going to
do in the future. But KNOWING that no one knows, and that you don't
know either, gives you the power to invest anyway, into the unknown,
knowing that you don't know, others don't know, and it's not worth it
to pay those who don't know but want to charge you because you don't
know either.

Welcome to the stock market.

Do you know what to do now?
Neither do I.

Re: My fund strategy?

Thanks, I needed cheering up.


"NoEd" <> wrote in message
news:
> Beware of those who sell books, give seminars, distribute newsletters,
> etc. on how to invest. They try to sell ways to beat the market, but yet
> scant proof is provided. The EMH cancels out just about all strategic
> advantages that may temporarily exist. None exist for very long. The
> possibilities going forward are a probability distribution based on
> thousands if not millions of variables. The shorter the timeframe, the
> greater the PD's standard deviation.

Re: My fund strategy?

"Doug" <> wrote

> Do you know what to do now?
> Neither do I.

Raise cash. Take profits if you have them, sell your winners, energy, basic
materials, etc. I'm at 40% cash looking at 50%. Healthcare is looking
interesting though, especially pharma.

No charge, no newsletter, no website.

Re: My fund strategy?

Dollar Cost averaging is a great way to suggest "save at regular
intervals" and works not as much because one buys more of what is low
relative to "time", but works more because it creates a regular saving
pattern.

Who saves more, a person who sets aside $200/month or one who sets
aside $300/month?

How much is set aside is factor #1, factor #2 is what the money is
invested in matters, and a distant third factor is how the money gets
invested (timed, DCA, newletters, broker account).

To save lots of money I would suggest considering-

a) the amount saved at each interval
and
b) what it is invested in (we assume stocks will do better than CD's,
but if one puts twice as much into CD's as I put into stocks, there is
a reasoable chance in the end they will have more than I if I choose
Bad stocks or the economy starts favoring CASH investements...)

Re: My fund strategy?

In article
<>,
wrote:

> How much is set aside is factor #1, factor #2 is what the money is
> invested in matters, and a distant third factor is how the money gets
> invested (timed, DCA, newletters, broker account).

actually as long as we're talking DCA, right up there with #1 is
how soon in life one starts. earlier the better, of course,
because of "the magic of compounding."

--

"Did you notice that [Candaq and Gardner] never miss one of my posts and I
never read theirs, I have to wonder just who it is that's envious." -Ed, in
news:<9cn26l$6di6$>.

Re: My fund strategy?

In article <>,
<> wrote:
>Dollar Cost averaging is a great way to suggest "save at regular
>intervals" and works not as much because one buys more of what is low
>relative to "time", but works more because it creates a regular saving
>pattern.
>
>Who saves more, a person who sets aside $200/month or one who sets
>aside $300/month?
>
>How much is set aside is factor #1, factor #2 is what the money is
>invested in matters, and a distant third factor is how the money gets
>invested (timed, DCA, newletters, broker account).
>
>To save lots of money I would suggest considering-
>
>a) the amount saved at each interval
>and
>b) what it is invested in (we assume stocks will do better than CD's,
>but if one puts twice as much into CD's as I put into stocks, there is
>a reasoable chance in the end they will have more than I if I choose
>Bad stocks or the economy starts favoring CASH investements...)
>

Well, I have my monthly investment budget (it sure ain't $300/month, but
it's what I can handle), and I have my investment vehicle in the form of a
set of "growth" funds. All else is equal, so the choice is DCA or some
other way to distribute a fixed monthly sum into a set of funds. I expect
growth funds to fluctuate, and I'm assuming that over the long term
they'll grow. So given a choice, I'd just rather buy more shares instead
of fewer.


--
"Let us learn to dream, gentlemen, then perhaps we shall find the
truth... But let us beware of publishing our dreams before they have been
put to the proof by the waking understanding." -- Friedrich August Kekulé

Re: My fund strategy?

"Gregory L. Hansen" <> wrote in message
news:d651cr$8bh$
> In article <d645sv$1e2$>,
> David Wilkinson <> wrote:
> >Gregory L. Hansen wrote:
> >> I've recently discovered mutual funds, and I have a little portfolio in
my
> >> IRA. I know the usual advice like don't try to time the market, put
money
> >> away at regular intervals. And sure, that sounds good. But when I do
put
> >> money away, I was thinking of weighting the distribution to each fund
by
> >> the year's average over the current price, putting more money into an
> >> individual fund when it's low and less when it's high. I am assuming
they
> >> will fluctuate but on average increase in value over the decades
> >> before I use it.
> >>
> >> Is something like that known of and used? Does it actually make any
> >> difference versus a fixed amount in each fund? Are there better
> >> strategies to consider?
> >
> >Yes, this is a good system and there are several published ways of doing
> >it. These include:
> >
> >The TWINVEST system given in Chapter 15 of Robert Lichello's "How to
> >make $1,000,000 in the stock market automatically". This book is in its
> >fourth edition and has been in print since 1977, a sign that its methods
> >are actually very good in spite of the slightly silly title. It is also
> >incredibly cheap at $6.99 USD from most bookshops. The main AIM part of
> >it is very good too.
> >
> >The Value Averaging method of Michael Edleson described in a book of
> >that name from IPC, which I think is out of print but you can probably
> >turn up a summary of the method on Google somewhere.
> >
> >Method 3 in Chapter 9 of "Millard on Stocks and Shares" by Brian
> >Millard, now in Fourth Edition from Wiley. This also does exactly what
> >you say, relating the amount saved each month to the current price and
> >average price per share paid to date.
> >
> >All of these methods will beat Dollar Cost Averaging over any reasonable
> >time period.
>
> Thanks. The advice I've seen so far seems to universally favor Dollar
> Cost Averaging. Maybe because it's easy to follow without doing any
> thinking about it-- the best investment strategy is the one that you will
> do. But I thought it couldn't be hard to beat. Weighting the dollar
> distribution by the yearly/current price seemed like the most
> straightforward way to do it, but I can imagine other ways like
> (yearly/current)^2, put everything into max(yearly/current), working the
> lifelong average return into it, etc. I'd thought about rate of change
> and acceleration, but decided that's only meaningful to the day trader;
> the rate of the rate of change means nothing when the money is going to
> stay in there for thirty years.

I think you hit the nail on the head twice, above. What's important is that
you do it and that you stay the course. This is most of what you could
possibly do to maximize the amount of money you have at the other end.

I have a bunch of funds that I just try to keep equal (roughly). Doesn't
this capture a lot of the price action without all the calculation?

-herb

Re: My fund strategy?

"Gregory L. Hansen" <> wrote

> Well, I have my monthly investment budget (it sure ain't $300/month, but
> it's what I can handle), and I have my investment vehicle in the form of a
> set of "growth" funds. All else is equal, so the choice is DCA or some
> other way to distribute a fixed monthly sum into a set of funds. I expect
> growth funds to fluctuate, and I'm assuming that over the long term
> they'll grow. So given a choice, I'd just rather buy more shares instead
> of fewer.

Doing something is better than doing nothing. I have seen the arguments for
growth/aggreesive funds for young investors. Never really bought it though.
The theory is that if you are young and have many years of investing ahead
of you then you have time to recover from being put through hell. Maybe you
do and maybe you don't. Most people throw in the towel and go back to their
bank CD's and U.S. Savings Bonds but not until they lock in a big loss.

I remember when growth was all people spoke of, visitors to this forum where
trying to find a NASDAQ Composite Index Fund. It was 1999 and 2000. In early
2000 this index peaked at over 5,000. Five years later it's at 1,976. People
are probably happy that there was no such index fund to buy. There is now.
Five years later and you need to have the Nasdaq go up another 150% or so to
get you back to where you were in 2000.

Oak Associates was the fund family on the pedestal. Firsthand Funds were
right behind them.
If you bought these funds 5 years ago then you still don't know what hit
you. Janus Funds was another that people couldn't get enough of.

White Oak Growth, value of $10,000 investment 4/30/2000 to 4/30/2005:
$4,046.98
Firsthand Technology Value Fund, 3/31/2000 to 3/31/2005: $2,350.98

Re: My fund strategy?

Gregory L. Hansen wrote:

>I have my investment vehicle in the form of a set of
>"growth" funds. All else is equal, so the choice is DCA
>or some other way to distribute a fixed monthly sum into
>a set of funds.

How much you invest and how early you start investing will likely
matter more than whether you use invest through lump sum, dollar cost
averaging, or value averaging. The latter two have performed so
similarly that diferences are trivial, Lump sum has done slightly
better over the best decades but much worse over the worst ones.

Don't invest in overly aggressive funds since you'll probably get only
a tiny bit more profit for a lot more risk, and bear markets matter.

Re: My fund strategy?

In article <>,
Ed <> wrote:
>
>"Gregory L. Hansen" <> wrote
>
>> Well, I have my monthly investment budget (it sure ain't $300/month, but
>> it's what I can handle), and I have my investment vehicle in the form of a
>> set of "growth" funds. All else is equal, so the choice is DCA or some
>> other way to distribute a fixed monthly sum into a set of funds. I expect
>> growth funds to fluctuate, and I'm assuming that over the long term
>> they'll grow. So given a choice, I'd just rather buy more shares instead
>> of fewer.
>
>Doing something is better than doing nothing. I have seen the arguments for
>growth/aggreesive funds for young investors. Never really bought it though.
>The theory is that if you are young and have many years of investing ahead
>of you then you have time to recover from being put through hell. Maybe you
>do and maybe you don't. Most people throw in the towel and go back to their
>bank CD's and U.S. Savings Bonds but not until they lock in a big loss.

There's a fund that I'm in through my employer, it's a Fidelity Freedom
2035, or something like that. It's a fund for people that plan to retire
around the year 2035. Now it's a growth fund, but as time passes it will
be gradually converted to capital preservation and income. I think it's a
nice idea.
--
"Suppose you were an idiot... And suppose you were a member of
Congress... But I repeat myself." - Mark Twain

Re: My fund strategy?

"Gregory L. Hansen" <> wrote in message
news:d67i8f$5um$

> Fidelity Freedom 2035,

> Now it's a growth fund,

No, not exactly.

Inputting the symbol FFTHX here,

ion=toolsxray&dt=0.7055475
and inserting any dollar value, will show the most recent
composition of the fund or combination of funds.

This fund has 82.86% of every dollar invested in stocks.

26% of those stocks are value oriented.
39% of those stocks are core oriented.
And only 26% of the stock holdings are of the growth type.

Not saying this is a bad mix, just that is not a growth fund in the
classic
sense.
This diversification offers less risk than a true growth fund.
But also note that FFTHX is NOT truly diversified in the equity area,
having next to nothing in the small cap area.

Re: My fund strategy?

Gregory L. Hansen wrote:
> In article <d645sv$1e2$>,
> David Wilkinson <> wrote:
>
>>Gregory L. Hansen wrote:
>>
>>>I've recently discovered mutual funds, and I have a little portfolio in my
>>>IRA. I know the usual advice like don't try to time the market, put money
>>>away at regular intervals. And sure, that sounds good. But when I do put
>>>money away, I was thinking of weighting the distribution to each fund by
>>>the year's average over the current price, putting more money into an
>>>individual fund when it's low and less when it's high. I am assuming they
>>>will fluctuate but on average increase in value over the decades
>>>before I use it.
>>>
>>>Is something like that known of and used? Does it actually make any
>>>difference versus a fixed amount in each fund? Are there better
>>>strategies to consider?
>>
>>Yes, this is a good system and there are several published ways of doing
>>it. These include:
>>
>>The TWINVEST system given in Chapter 15 of Robert Lichello's "How to
>>make $1,000,000 in the stock market automatically". This book is in its
>>fourth edition and has been in print since 1977, a sign that its methods
>>are actually very good in spite of the slightly silly title. It is also
>>incredibly cheap at $6.99 USD from most bookshops. The main AIM part of
>>it is very good too.
>>
>>The Value Averaging method of Michael Edleson described in a book of
>>that name from IPC, which I think is out of print but you can probably
>>turn up a summary of the method on Google somewhere.
>>
>>Method 3 in Chapter 9 of "Millard on Stocks and Shares" by Brian
>>Millard, now in Fourth Edition from Wiley. This also does exactly what
>>you say, relating the amount saved each month to the current price and
>>average price per share paid to date.
>>
>>All of these methods will beat Dollar Cost Averaging over any reasonable
>>time period.
>
>
> Thanks. The advice I've seen so far seems to universally favor Dollar
> Cost Averaging. Maybe because it's easy to follow without doing any
> thinking about it-- the best investment strategy is the one that you will
> do. But I thought it couldn't be hard to beat. Weighting the dollar
> distribution by the yearly/current price seemed like the most
> straightforward way to do it, but I can imagine other ways like
> (yearly/current)^2, put everything into max(yearly/current), working the
> lifelong average return into it, etc. I'd thought about rate of change
> and acceleration, but decided that's only meaningful to the day trader;
> the rate of the rate of change means nothing when the money is going to
> stay in there for thirty years.
>
>
The "Buy & Hold" fans have a very simple model of what future market
movements will be. Based on past results averaged over the last 100
years or so they assume it will be something like exponential growth at
about 11% gain a year. A look at the last 100 years on one graph with a
log scale may suggest this is not bad but a look at a shorter period,
like the last 5, 10 or 15 years, or almost any similar period in the
past, will show this is a poor approximation.

Methods like DCA, TwinVest, Value Averaging, etc., assume a slightly
more sophisticated model, in which superimposed on the exponential
growth will be quite large swings above and below the average. They try
to take advantage of this to buy more when the price is low and less
when it is high and this gives a percent or so more gain p.a. than
simple B&H or even DCA, which builds up over the years.

However, note that it is dangerous to buy "Growth" or "Value" funds or
sector funds because these may not fit the model. Look at Nasdaq funds
over the last 10 years. Up like a rocket and down like the stick, as
they say. The ones to go for are index funds invested in the total market.

Also, don't believe these people who say they have absolutely no idea
what will happen to the market in the future. If they thought it would
go down to zero and stay there, for instance, they would not buy stocks
or funds. If they thought it would do worse than just buying CDs or
holding bonds to redemption then they would buy the CDs or bonds. The
only reason for buying funds is because you think they will do better
than CDs and Bonds, generally in the long term. So, any fund buyer has
an implicit or explicit idea of the return he expects from them in the
future, whatever they say. They are all predicting the future, based on
the past.

Re: My fund strategy?

<> wrote in message
news:

> Dollar Cost averaging is a great way to suggest "save at regular
> intervals" and works not as much because one buys more of what is low
> relative to "time", but works more because it creates a regular saving
> pattern.
>
> Who saves more, a person who sets aside $200/month or one who sets
> aside $300/month?
>
> How much is set aside is factor #1, factor #2 is what the money is
> invested in matters, and a distant third factor is how the money gets
> invested (timed, DCA, newletters, broker account).
>
> To save lots of money I would suggest considering-
>
> a) the amount saved at each interval
> and
> b) what it is invested in (we assume stocks will do better than CD's,
> but if one puts twice as much into CD's as I put into stocks, there is
> a reasoable chance in the end they will have more than I if I choose
> Bad stocks or the economy starts favoring CASH investements...)

If the truth be known, I suspect that only a small percentage of people who
start a program of dollar cost averaging actually finish it, or continue it
long enough for the benefits to work and make a difference. After a couple
of years, they get interested in other things, or need the money for
something, or get divorced, or have health problems, etc., etc. and dollars
no longer go into the plan. So, if the program actually lasts for, 2 years
or maybe 3 years, or even 4 years, whether it spans a period when the market
is rising or falling or flat is a matter of chance. So, although dollar cost
averaging sounds good in theory, in practice it comes right back to a gain
or loss being largely a matter of chance for any particular individual.

Re: My fund strategy?

On Sun, 15 May 2005 20:32:51 +0100, David Wilkinson
<> wrote:

>The "Buy & Hold" fans have a very simple model of what future market
>movements will be.

snip

This post reminds me of what you get when you ask a Capitalist to
review and critique Socialism. Or when you ask a Socialist to review
and critique Capitalism.


-HW "Skip" Weldon
Columbia, SC

Re: My fund strategy?

"HW "Skip" Weldon" <> wrote

> On Sun, 15 May 2005 20:32:51 +0100, David Wilkinson
> <> wrote:
>
>>The "Buy & Hold" fans have a very simple model of what future market
>>movements will be.
>
> snip
>
> This post reminds me of what you get when you ask a Capitalist to
> review and critique Socialism. Or when you ask a Socialist to review
> and critique Capitalism.

Maybe, but it's true. We buy stocks and stock funds because historically
they have beaten inflation over the long term.

Mary What's-her-name, Chief Market Strategist for However, was on CNBC and
said stocks were the only game in town. Money markets won't keep you ahead
of inflation and interest rates are rising so forget bonds.

I'd like to take this opportunity to remind you and Mary What's-her-name:

The 1,825 day return for:
VFINX was -14.22%
VTSMX was -9.93%
Vanguard Prime Reserves money market was +13.53%

Re: My fund strategy?

On Sun, 15 May 2005 17:46:21 -0400, "Ed" <> wrote:


>I'd like to take this opportunity to remind you and Mary What's-her-name:
>
>The 1,825 day return for:
>VFINX was -14.22%
>VTSMX was -9.93%
>Vanguard Prime Reserves money market was +13.53%

What a wonderful time to have been buying.

-HW "Skip" Weldon
Columbia, SC

Re: My fund strategy?

"HW "Skip" Weldon" <> wrote

> On Sun, 15 May 2005 17:46:21 -0400, "Ed" <> wrote:
>
>
>>I'd like to take this opportunity to remind you and Mary What's-her-name:
>>
>>The 1,825 day return for:
>>VFINX was -14.22%
>>VTSMX was -9.93%
>>Vanguard Prime Reserves money market was +13.53%
>
> What a wonderful time to have been buying.

Depends on what you were buying.
PRWCX +88.02% over the same period.
TBGVX +37.14% over the same period.
TRMCX +100.61% over the same period.
OAKBX +77.81% over the same period.
CPI, approximate, +11.00%, the Vanguard MM beat it. VFINX & VTSMX did not.

Re: My fund strategy?

The model is simple, but he forgot to explain the reason for its simplicity
or to afford alternatives. I do find it interesting his attempt to sound
mathematical: exponential growth and log scale. Also, I don't think 5-15
years of data is a "poor approximation" for a hundred years worth of data.
Obviously there is an inverse relationship between time period and expected
return. I wonder what the year sample size would need to be to find a 95%
confidence interval.

I have seen it discussed that the risk premium will be lower by about 1.5%
over the next say 25-50 years because PEs are higher than they were 50+
years ago. But that seems to be in reverse of logic. Are stocks more or
less risky with a higher PE ratio? I would say higher. If that is true,
what does the risk premium account for?



"HW "Skip" Weldon" <> wrote in message
news:
> On Sun, 15 May 2005 20:32:51 +0100, David Wilkinson
> <> wrote:
>
>>The "Buy & Hold" fans have a very simple model of what future market
>>movements will be.
>
> snip
>
> This post reminds me of what you get when you ask a Capitalist to
> review and critique Socialism. Or when you ask a Socialist to review
> and critique Capitalism.
>
>
> -HW "Skip" Weldon
> Columbia, SC

Re: My fund strategy?

In article <PCIhe.365$>,
Gary C <> wrote:
>
>"Gregory L. Hansen" <> wrote in message
>news:d67i8f$5um$
>
>> Fidelity Freedom 2035,
>
>> Now it's a growth fund,
>
>No, not exactly.
>
>Inputting the symbol FFTHX here,
>
>ion=toolsxray&dt=0.7055475
>and inserting any dollar value, will show the most recent
>composition of the fund or combination of funds.
>
>This fund has 82.86% of every dollar invested in stocks.
>
>26% of those stocks are value oriented.
>39% of those stocks are core oriented.
>And only 26% of the stock holdings are of the growth type.
>
>Not saying this is a bad mix, just that is not a growth fund in the
>classic
>sense.
>This diversification offers less risk than a true growth fund.
>But also note that FFTHX is NOT truly diversified in the equity area,
>having next to nothing in the small cap area.

I didn't look closely at it. I was actually sort of surprised to find
that I have it, so it was like a freebie. But the investment strategy is
time dependent, so it might have been more growthy a few years ago.

--
"Things should be made as simple as possible -- but no simpler."
-- Albert Einstein

Re: My fund strategy?

as I suggested, the dollar cost averaging system works in part because
it creates a regular pattern of investing. if the pattern of investing
stops, it is no longer working.

DCA is about patience. Starting early, trying to increase how much one
contributes, and trying to pick good investments to contribute to.

Re: My fund strategy?

<> wrote in message
news:

> as I suggested, the dollar cost averaging system works in part because
> it creates a regular pattern of investing. if the pattern of investing
> stops, it is no longer working.
>
> DCA is about patience. Starting early, trying to increase how much one
> contributes, and trying to pick good investments to contribute to.

Yes, agreed, that is how it should work, but in practice I would question
whether many people have enough patience to make it work. And even if
someone starts with high hopes, but the patience extends over a period of
just a few years (or even six or seven years), until some event interrupts
the regular pattern of investing, the gain or loss will depend greatly on
the starting and ending times of that limited period.

Re: My fund strategy?

as a previous poster suggested, if someone stops DCA'ing after 2 years,
they really didn't "DCA".

Re: My fund strategy?

<> wrote in message
news:

> as a previous poster suggested, if someone stops DCA'ing after 2 years,
> they really didn't "DCA".

Quite true. There is another reason why DCAing sounds good in theory but
breaks down in practice. Typically one's income rises steadily over a long
period of time, and if one invests regularly, the amount invested increases
over time. E.g., one starts by DCAing $100 per month for a while, then $200
per month after several years, perhaps $500 per month in later years, etc.
So, more money will go into the plan later in life when income is higher,
that is, the greater part of the investment will be made in a relatively
shorter period of time. This means that again we are back to the chance
factor of what the market will be doing during that period when the most
money is being invested. I would suspect precious few people DCA a fixed
$200 per month over 30 years, which is the kind of program the theory
assumes.

Re: My fund strategy?

Okay, my strategy of weighting contributions to funds by current/year
average price depends on knowing the current price and yearly average.
But all of the information I can find is current price and average percent
changes. And that's nice to know, but where can I find averages on
absolute price?


--
"Things should be made as simple as possible -- but no simpler."
-- Albert Einstein

Re: My fund strategy?

Gregory L. Hansen wrote:
> Okay, my strategy of weighting contributions to funds by current/year
> average price depends on knowing the current price and yearly average.
> But all of the information I can find is current price and average percent
> changes. And that's nice to know, but where can I find averages on
> absolute price?
>
>
Just use a simple moving average with a period of 250 trading days. Its
current value will be the average of the last year's prices.

Re: My fund strategy?

In article <d6dunf$2ia$>,
David Wilkinson <> wrote:
>Gregory L. Hansen wrote:
>> Okay, my strategy of weighting contributions to funds by current/year
>> average price depends on knowing the current price and yearly average.
>> But all of the information I can find is current price and average percent
>> changes. And that's nice to know, but where can I find averages on
>> absolute price?
>>
>>
>Just use a simple moving average with a period of 250 trading days. Its
>current value will be the average of the last year's prices.

Well, that's sort of what I want, but what I've found so far is an
average percent return. I've only found NAVs for one day at a time.

--
"We've all heard that a million monkeys banging on a million typewriters
will eventually reproduce the entire works of Shakespeare. Now, thanks to
the Internet, we know this is not true." -- Robert Wilensky

Re: My fund strategy?

On Wed, 18 May 2005 01:32:14 +0000 (UTC),
(Gregory L. Hansen) wrote:

>In article <d6dunf$2ia$>,
>David Wilkinson <> wrote:
>>Gregory L. Hansen wrote:
>>> Okay, my strategy of weighting contributions to funds by current/year
>>> average price depends on knowing the current price and yearly average.
>>> But all of the information I can find is current price and average percent
>>> changes. And that's nice to know, but where can I find averages on
>>> absolute price?
>>>
>>>
>>Just use a simple moving average with a period of 250 trading days. Its
>>current value will be the average of the last year's prices.
>
>Well, that's sort of what I want, but what I've found so far is an
>average percent return. I've only found NAVs for one day at a time.

Here is an example of a 200 day MA

Re: My fund strategy?

David B. Redmond wrote:
>
> On Wed, 18 May 2005 01:32:14 +0000 (UTC),
> (Gregory L. Hansen) wrote:
>
> >In article <d6dunf$2ia$>,
> >David Wilkinson <> wrote:
> >>Gregory L. Hansen wrote:
> >>> Okay, my strategy of weighting contributions to funds by
> >>> current/year average price depends on knowing the current
> >>> price and yearly average. But all of the information I
> >>> can find is current price and average percent changes.
> >>> And that's nice to know, but where can I find averages on
> >>> absolute price?
> >>>
> >>>
> >>Just use a simple moving average with a period of 250 trading days.
> >>Its current value will be the average of the last year's prices.
> >
> >Well, that's sort of what I want, but what I've found so far is an
> >average percent return. I've only found NAVs for one day at a time.
>
> Here is an example of a 200 day MA
>

That's okay for a fund like the S&P index fund you chose, which like a
stock distributes little in the way of dividends. But with funds in
general, one should be a little careful in looking only at NAVs.

As an example, consider SunAmerica Value A:


Following Gregory's heuristic (invest more in funds whose current NAV is
under its trailing year's average), he would overweight any investment
made after mid March.

But if one considered the value of a dollar invested in this fund a year
ago vs. the average value of that investment over the past year, one
would come up with a different result. This is because the fund had a
sizeable distribution at the end of last year - roughly $2 on a $19
share, or over 10%. That's the drop you see in the graph.

One can compute the "true" moving averages by downloading the NAVs from
yahoo, and averaging the "adj close" column over whatever window (say,
one year) that one chooses.

For the past year of this fund, you can download the data:


The average of the last column over the past year is $16.42, while the
current NAV is $17.17. Or, the average over the past 200 trading days
is $16.70, still well under the current NAV. Rather different from what
one sees on the graph.

--
Mark Freeland

Re: My fund strategy?

In article <>,
David B. Redmond <> wrote:
>On Wed, 18 May 2005 01:32:14 +0000 (UTC),
> (Gregory L. Hansen) wrote:
>
>>In article <d6dunf$2ia$>,
>>David Wilkinson <> wrote:
>>>Gregory L. Hansen wrote:
>>>> Okay, my strategy of weighting contributions to funds by current/year
>>>> average price depends on knowing the current price and yearly average.
>>>> But all of the information I can find is current price and average percent
>>>> changes. And that's nice to know, but where can I find averages on
>>>> absolute price?
>>>>
>>>>
>>>Just use a simple moving average with a period of 250 trading days. Its
>>>current value will be the average of the last year's prices.
>>
>>Well, that's sort of what I want, but what I've found so far is an
>>average percent return. I've only found NAVs for one day at a time.
>
>Here is an example of a 200 day MA
>

I'd actually drifted through that site, but not that part of it. That's
just the sort of thing I wanted. I would have liked running averages
covering a longer period.
--
"The polhode rolls without slipping on the herpolhode lying in the
invariable plane." -- Goldstein, Classical Mechanics 2nd. ed., p207.

Re: My fund strategy?

In article <>,
Mark Freeland <> wrote:
>David B. Redmond wrote:
>>
>> On Wed, 18 May 2005 01:32:14 +0000 (UTC),
>> (Gregory L. Hansen) wrote:
>>
>> >In article <d6dunf$2ia$>,
>> >David Wilkinson <> wrote:
>> >>Gregory L. Hansen wrote:
>> >>> Okay, my strategy of weighting contributions to funds by
>> >>> current/year average price depends on knowing the current
>> >>> price and yearly average. But all of the information I
>> >>> can find is current price and average percent changes.
>> >>> And that's nice to know, but where can I find averages on
>> >>> absolute price?
>> >>>
>> >>>
>> >>Just use a simple moving average with a period of 250 trading days.
>> >>Its current value will be the average of the last year's prices.
>> >
>> >Well, that's sort of what I want, but what I've found so far is an
>> >average percent return. I've only found NAVs for one day at a time.
>>
>> Here is an example of a 200 day MA
>>
>
>That's okay for a fund like the S&P index fund you chose, which like a
>stock distributes little in the way of dividends. But with funds in
>general, one should be a little careful in looking only at NAVs.
>
>As an example, consider SunAmerica Value A:
>
>
>Following Gregory's heuristic (invest more in funds whose current NAV is
>under its trailing year's average), he would overweight any investment
>made after mid March.

Wow, that's an interesting drop in late Dec05.

>
>But if one considered the value of a dollar invested in this fund a year
>ago vs. the average value of that investment over the past year, one
>would come up with a different result. This is because the fund had a
>sizeable distribution at the end of last year - roughly $2 on a $19
>share, or over 10%. That's the drop you see in the graph.

So... what about a fund where the dividends are reinvested? I'm not quite
sure what the lesson is.

Here's a fund I actually have,



And from eyeballing it, I think now might not be the time to focus
contributions in it. But the 200 day average closely tracks the current
price at these time scales. You can see the dip in 2003-2004 where I
might have wanted to sink money into it, but my formula would have reduced
contributions during the second half of the sweet spot. Not that I would
have chosen to simply not invest, but I would have wanted to try to put
more of the money to funds with lower current/average prices. Same total
contribution, I just want to make that clear to avoid sermons.

Okay, then, I wanted a formula to reduce subjectivity, but use the
eyeballs to check it.

>
>One can compute the "true" moving averages by downloading the NAVs from
>yahoo, and averaging the "adj close" column over whatever window (say,
>one year) that one chooses.
>
>For the past year of this fund, you can download the data:
>
>
>The average of the last column over the past year is $16.42, while the
>current NAV is $17.17. Or, the average over the past 200 trading days
>is $16.70, still well under the current NAV. Rather different from what
>one sees on the graph.

I'll have to keep that one in mind. I can crunch data, but I was sort of
hoping it was already done.

--
"Experiments are the only means of knowledge at our disposal. The rest is
poetry, imagination." -- Max Planck

Re: My fund strategy?

"Gregory L. Hansen" <> wrote

> Wow, that's an interesting drop in late Dec05.
>
>>
>>But if one considered the value of a dollar invested in this fund a year
>>ago vs. the average value of that investment over the past year, one
>>would come up with a different result. This is because the fund had a
>>sizeable distribution at the end of last year - roughly $2 on a $19
>>share, or over 10%. That's the drop you see in the graph.
>
> So... what about a fund where the dividends are reinvested? I'm not quite
> sure what the lesson is.

The lesson, as I see it, is that using these graphs to track the 200 day
moving average is unreliable at best. If the graph showed the effect of
reinvesting the distribution the drop wouldn't be represented. Since this is
an nav graph and not a total return graph it is not worthy of influencing
investment decisions based on moving averages.

Re: My fund strategy?

"Ed" <> wrote in message
news:
>
> "Gregory L. Hansen" <> wrote
>
> > Wow, that's an interesting drop in late Dec05.
> >
> >>
> >>But if one considered the value of a dollar invested in this fund a year
> >>ago vs. the average value of that investment over the past year, one
> >>would come up with a different result. This is because the fund had a
> >>sizeable distribution at the end of last year - roughly $2 on a $19
> >>share, or over 10%. That's the drop you see in the graph.
> >
> > So... what about a fund where the dividends are reinvested? I'm not
> > quite sure what the lesson is.
>
> The lesson, as I see it, is that using these graphs to track the 200 day
> moving average is unreliable at best. If the graph showed the effect of
> reinvesting the distribution the drop wouldn't be represented. Since this
> is an nav graph and not a total return graph it is not worthy of
influencing
> investment decisions based on moving averages.

Well stated, thanks.

Gregory also wrote:
> Here's a fund I actually have,
>
>

If one looks at this NAV chart, one sees that
(current NAV)/(200 day MA NAV) < 1

But if one uses total value (including reinvested distributions), one gets:
current value: $31.14
200 day MA: $30.71
ratio = 1.014 > 1

Eyeballing shows distributions totalling around 1-2% in Aug, December and
Feb, accounting for the difference. Some years, funds may have large
distributions, heavily distorting the picture given by NAVs, while other
years the distributions may be small - then NAV approximately tracks
investment value.

Computing these numbers took literally less than a minute of my time (this
post took much longer to write), so I don't find it takes significantly more
effort to calculate a meaningful custom window moving average than to look
up an NAV moving average with a fixed window size. YMMV.

--
Mark Freeland

Re: My fund strategy?

In article <>,
Ed <> wrote:
>
>"Gregory L. Hansen" <> wrote
>
>> Wow, that's an interesting drop in late Dec05.
>>
>>>
>>>But if one considered the value of a dollar invested in this fund a year
>>>ago vs. the average value of that investment over the past year, one
>>>would come up with a different result. This is because the fund had a
>>>sizeable distribution at the end of last year - roughly $2 on a $19
>>>share, or over 10%. That's the drop you see in the graph.
>>
>> So... what about a fund where the dividends are reinvested? I'm not quite
>> sure what the lesson is.
>
>The lesson, as I see it, is that using these graphs to track the 200 day
>moving average is unreliable at best. If the graph showed the effect of
>reinvesting the distribution the drop wouldn't be represented. Since this is
>an nav graph and not a total return graph it is not worthy of influencing
>investment decisions based on moving averages.

Is the effect of reinvesting shown anywhere? In the data Mark gave an URL
to,


005&g=d&ignore=.csv

what is the Adj. Close?



--
"The probability of anything happening is in inverse ratio to its
desirability." -- Gumperson's Law

Re: My fund strategy?

"Gregory L. Hansen" <> wrote

> what is the Adj. Close?

Adjusted for distributions:
On 12/17/04 SSVAX had a distribution of $2.068, the NAV on 12/16/04 was
$19.31, the adjusted NAV on 12/16/04 was $17.07

Re: My fund strategy?

In article <>,
Ed <> wrote:
>
>"Gregory L. Hansen" <> wrote
>
>> what is the Adj. Close?
>
>Adjusted for distributions:
>On 12/17/04 SSVAX had a distribution of $2.068, the NAV on 12/16/04 was
>$19.31, the adjusted NAV on 12/16/04 was $17.07

Okay, but I don't understand the direction of those numbers. The NAV was
$19.31, and the adjusted price was lower because of the distribution the
next day?

Um... people will pay $2 more the day before the distribution because they
know they're going to get the distribution, and people want to make up
that $2 if they're going to sell the day before, right?

And the adjusted NAV gives the distribution-free price. When I buy shares
in a fund for the long haul, and the distributions are reinvested, I might
pay $19.31, but then $2.068 will be distributed which will immediately be
used to buy more shares, so it's as if I had bought the shares for $17.07.
So it's the adjusted NAV that I want to watch in that case.

How'd I do?

--
"Is that plutonium on your gums?"
"Shut up and kiss me!"
-- Marge and Homer Simpson

Re: My fund strategy?

Gregory L. Hansen wrote:
>
> In article <>,
> Ed <> wrote:
> >
> >Adjusted for distributions:
> >On 12/17/04 SSVAX had a distribution of $2.068, the NAV on 12/16/04
> >was $19.31, the adjusted NAV on 12/16/04 was $17.07
> [...]
> When I buy shares in a fund for the
> long haul, and the distributions are reinvested, I might pay $19.31,
> but then $2.068 will be distributed which will immediately be used
> to buy more shares, so it's as if I had bought the shares for $17.07.
> So it's the adjusted NAV that I want to watch in that case.
>
> How'd I do?

That's pretty much it. Just to be clear - the reinvestment bought more
shares (roughly 0.1 shares), so it is as if you paid $17.07 per share
(for a total of $19.31) for the ~1.1 shares you have after reinvestment.

--
Mark Freeland

Re: My fund strategy?

"Gregory L. Hansen" <> wrote in message
news:d6graf$2tn$

[snip]

> How'd I do?
>

Not badly. You should remember, though, open ended mutual funds do not have
prices. They have net asset value. The NAV drops after a distribution
because the distribution has been taken out of the fund. Whether you put it
back or not is a separate question and doesn't effect the NAV since new
shares will be issued.

People misuse analysis meant for prices with NAVs. A price is for one
security, determined by supply and demand in a relatively free, open market.
An NAV is the average of many prices all munged together. They behave
differently.

-herb

Re: My fund strategy?

"Herb" <> wrote

> People misuse analysis meant for prices with NAVs. A price is for one
> security, determined by supply and demand in a relatively free, open
> market.
> An NAV is the average of many prices all munged together. They behave
> differently.

NAV is still the price. It is the price you pay for one share when you buy
and the amount you get for one share when you sell.

Re: My fund strategy?

Herb wrote:
> "Gregory L. Hansen" <> wrote in message
> news:d6graf$2tn$
>
> [snip]
>
>
>>How'd I do?
>>
>
>
> Not badly. You should remember, though, open ended mutual funds do not have
> prices. They have net asset value. The NAV drops after a distribution
> because the distribution has been taken out of the fund. Whether you put it
> back or not is a separate question and doesn't effect the NAV since new
> shares will be issued.
>
> People misuse analysis meant for prices with NAVs. A price is for one
> security, determined by supply and demand in a relatively free, open market.
> An NAV is the average of many prices all munged together. They behave
> differently.
>
> -herb
>
>
"munged"? Is this a technical word used by economists?

Re: My fund strategy?

"David Wilkinson" <> wrote in message
news:d6hpd4$p2$
>>
>>
> "munged"? Is this a technical word used by economists?

Typo. Must mean Hmong.

Re: My fund strategy?

"Gary C" <> wrote in message
news:9o_ie.2694$
>
> "David Wilkinson" <> wrote in message
> news:d6hpd4$p2$
> >>
> >>
> > "munged"? Is this a technical word used by economists?
>
> Typo. Must mean Hmong.
>
>
>
No, I meant "munged." It sounds so much friendlier than "aggregated."

-herb

Re: My fund strategy?

"Herb" <> wrote

> No, I meant "munged." It sounds so much friendlier than "aggregated."

Your point is off the wall and meaningless anyway. It doesn't matter.

Re: My fund strategy?

In article <d6hpd4$p2$>,
David Wilkinson <> wrote:

> "munged"? Is this a technical word used by economists?

very common word here, used in my experience by computer-literate
people. for example, "I have a text file here but it's all
munged."

--

"Did you notice that [Candaq and Gardner] never miss one of my posts and I
never read theirs, I have to wonder just who it is that's envious." -Ed, in
news:<9cn26l$6di6$>.

Re: My fund strategy?

"sam grey" <> wrote in message
news:
> In article <d6hpd4$p2$>,
> David Wilkinson <> wrote:
>
> > "munged"? Is this a technical word used by economists?
>
> very common word here, used in my experience by computer-literate
> people. for example, "I have a text file here but it's all
> munged."

From Dictionary.com:


/muhnj/ vt. 1. [derogatory] To imperfectly transform
information. 2. A comprehensive rewrite of a routine, data
structure or the whole program. 3. To modify data in some way the
speaker doesn't need to go into right now or cannot describe
succinctly (compare mumble). 4. To add spamblock to an email
address.

This term is often confused with mung, which probably was
derived from it. However, it also appears the word `munge' was in
common use in Scotland in the 1940s, and in Yorkshire in the 1950s,
as a verb, meaning to munch up into a masticated mess, and as a
noun, meaning the result of munging something up (the parallel with
the kluge/kludge pair is amusing).

I think I was using sense 3 above though I don't mind "munch up into a
masticated mess."

-herb

Re: My fund strategy?

"Herb" <> wrote

> 3. (compare mumble).

> I think I was using sense 3 above

Typical for you.

Re: My fund strategy?

In article <>,
Mark Freeland <> wrote:

>For the past year of this fund, you can download the data:
>

I've been poking around Yahoo and I can't find this service. I can find
historical data in an HTML table, click button for next page, not really
suitable for downloading. Where did you find it?


--
"A nice adaptation of conditions will make almost any hypothesis agree
with the phenomena. This will please the imagination but does not advance
our knowledge." -- J. Black, 1803.

Re: My fund strategy?

"Herb" <> wrote in message
news:gAVie.788624$
>
> People misuse analysis meant for prices with NAVs. A price is for one
> security, determined by supply and demand in a relatively free, open
market.
> An NAV is the average of many prices all munged together. They behave
> differently.

Expounding on this point:

When one buys shares of an open end fund (like buying shares of a secondary
offering of a company), the fund (investment company) receives cash. The
immediate effect is that the percentage of cash in the fund goes up, until
and unless the manager does something with that cash. The manager may buy
more of the same holdings, the manager may buy different securities, or keep
the cash, or use the cash to pay dividends, redemptions, etc. Thus, there
is no direct impact on the prices of the underlying assets, and the NAV does
not move merely as a result of shares being purchased.

In contrast, when one buys shares of a closed end fund or other fixed
quantity security, one moves the price of the security by increasing the
demand for that security. (This does not, however, affect the NAV of the
CEF - it only affects the premium/discount to NAV.)

I'm sure someone will raise the question of open end ETFs (as contrasted
with traditional exchange-traded CEFs
). There, the coupling is tighter
between the underlying securities and "purchase" of creation units. When
people purchase shares of an ETF above NAV, this entices arbitrageurs to buy
the underlying securities (increasing demand for these securities and
consequently affecting their price), and exchange them for creation units -
thus, demand for an ETF can, indirectly, impact the price of the underlying
securities, and thus the ETF's NAV. This impact is more theoretical than
real - the bigger impact is usually that the arbitrageur will sell the newly
created, overpriced ETF shares on the open market, reducing or eliminating
the premium. (That is, the ETF price will come down to meet NAV, rather than
the NAV rising to meet the ETF price.)

--
Mark Freeland

Re: My fund strategy?

"Gregory L. Hansen" <> wrote in message
news:d6kujo$ciq$
> In article <>,
> Mark Freeland <> wrote:
>
> >For the past year of this fund, you can download the data:
>
>
8&f=2005&g=d&ignore=.csv
>
> I've been poking around Yahoo and I can't find this service. I can find
> historical data in an HTML table, click button for next page, not really
> suitable for downloading. Where did you find it?

Look at the bottom of the historical data page, just below the data and the
links labeled "First", "Prev", "Next", and "Last". You'll see a link
labeled "Download to Spreadsheet".

If the range of data you selected when you got the HTML page was the window
you wanted to average (say, May 19, 2004 to May 19, 2005), then the
spreadsheet you download will have just this range of data, so you can
easily average the entire "Adj Close" column without having to find the
right dates to average.

--
Mark Freeland

Re: My fund strategy?

In article <_roje.1209$>,
Mark Freeland <> wrote:
>"Gregory L. Hansen" <> wrote in message
>news:d6kujo$ciq$
>> In article <>,
>> Mark Freeland <> wrote:
>>
>> >For the past year of this fund, you can download the data:
>>
>>
>8&f=2005&g=d&ignore=.csv
>>
>> I've been poking around Yahoo and I can't find this service. I can find
>> historical data in an HTML table, click button for next page, not really
>> suitable for downloading. Where did you find it?
>
>Look at the bottom of the historical data page, just below the data and the
>links labeled "First", "Prev", "Next", and "Last". You'll see a link
>labeled "Download to Spreadsheet".
>
>If the range of data you selected when you got the HTML page was the window
>you wanted to average (say, May 19, 2004 to May 19, 2005), then the
>spreadsheet you download will have just this range of data, so you can
>easily average the entire "Adj Close" column without having to find the
>right dates to average.

Ah, there it was, staring right at me. Silly me. Thanks.


--
"A good plan executed right now is far better than a perfect plan
executed next week."
-Gen. George S. Patton

Re: My fund strategy?

Probably as good as anything. They say when in doubt, 50% in the Total
Stock Market and 50% in the Total Bond Market. Rebalance yearly.
Simple, and as good as anything.