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Mutual Funds

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    “Mutual Funds offer Diversification and Low Trading Costs.”
 
Beginning in 2000, corrections to the stock market decreased the average value of Mutual Funds by 30% or more while some Index Mutual Funds decreased by more than 50%.
 
The Performance Section shows when using actual and historical data how you could have realized a substantial profit during this time-frame with the Fund Trading System. Active investing with Mutual Funds supported by Fund Trading can be a superior investment strategy.
 
 
 
Today, the average Mutual Fund turns over (Buys or Sells) all of their stock holdings once a year and some turn their holdings two or three times a year.
 
However, it is hard for the Mutual Funds to profit due to the large size of their portfolios. This is where the size of an individual portfolio traded with the Fund Trading System has a real advantage.
                                                                                                              
Many Mutual Funds discourage active investing because it drives up their cost and
they believe you should be pleased with average returns or losses.
 
However, taking control of your investments is necessary, since 2000, almost 90% of the Mutual Funds have performed worse than their corresponding Indexes, which have had very low or negative returns since 2000.  

The Index Funds listed below track the three U.S. market Indexes that we use with our Model Portfolios, the Nasdaq 100, Russell 2000 and S&P 500. Indexing was developed in the 1970’s and due to its low cost and tax efficiency has been increasingly used by institutional and individual investors.

Mutual Funds provide you with diversification and very low trading cost, especially if you are a member of their family of funds.
 
When using leveraged Mutual Funds you will not be charged margin. But even with their low trading costs, Exchange Traded Funds will offer slightly better returns due to less slippage. Slippage is the change in price between the time a signal is received and the purchase is completed.
 
 
 
                 “Mutual Funds are easy to use and they offer leverage.”
             
Mutual Funds trade at the end of the trading day and usually require orders to be placed two hours before the market closes.
 
Rydex does however offer their Dynamic Funds which trade twice a day. Mutual Funds do not allow stop orders, but the Fund Trading System will send an e-mail alert if a stop point is hit on the Model Portfolios.
 
Rydex Funds has been joined by two other fund companies that encourage an Active Investing Strategy. The three multi-billion dollar fund companies are:
    
Rydex Funds 
 
 (800) 820-0888 www.rydexfunds.com
ProFunds  (888) 776-3637
www.profunds.com 
Direxion Funds  (800) 851-0511
www.direxionfunds.com
 
Mutual Funds are simple to use and suitable for all of the Fund Trading Strategies. Unlike Exchange Traded Funds which allow you to go Long or Short with the same fund, with Mutual Funds you would switch between the two types.
 
Buy Long when the market is going up and Short called Inverse or Bear Funds when the market is declining. This allows you to profit in up or down markets. This may feel uncomfortable at first, but this is one of the secrets of the professional trader.
 
We will help you through the process in the How To Trade section.   
 
 
 
                "Leveraged Mutual Funds do Not charge you for Margin!"
   
        
A conservative investor would trade Mutual Funds without using leverage. But for more aggressive traders Mutual Funds offer the advantage of leveraged returns of 150%, 200% or 250%, without having to pay margin.
 
This means their returns will be greater than the return of the Index Fund they benchmark. For example, if the Index it tracks increases 20% your 200% return Long type fund would increase 40%.
 
The Inverse or Bear Fund would move in the opposite direction when used to profit from a declining market. A 10% decrease in the Index would result in a 10% increase in the fund. Bear Funds offer leverage too.
 
 
 
                 Recommended Mutual Funds
    

The following list of Mutual Funds can be used to implement the U.S. Fund Trading Strategies. We recommend investing as much as 60% of your portfolio in U.S. funds.
 
Visit the "Exchange Traded Fund" section for recommended International Funds. We recommend investing as much as 40% of your portfolio in International Funds.
 
 
After receiving a new Signal your Mutual Fund order should be placed at least two hours before the next market close. This gives you the flexibility to place the order the night before or first thing in the morning.
 
 
  

 Recommended Mutual Funds used for Buy (long) Signals 

                      
The Fund Trading System is designed to split your investment funds 50% / 50% between the Nasdaq 100 and Russell 2000. An alternative would consist of investing one third each in the Nasdaq 100, Russell 2000 and S&P 500.
  
Benchmark Index
Index 
Symbol
Fund 
Company
Fund Symbol Return Ratio
Nasdaq 100 NDX ProFunds OTPIX 100%
Nasdaq 100 NDX Direxion n/a  n/a
Nasdaq 100 NDX ProFunds UOPIX 200% 
Russell 2000 RUT ProFunds SLPIX 100%
Russell 2000 RUT Rydex RYMKX 150%
Russell 2000 RUT ProFunds UAPIX 200%
S&P 500 SPX ProFunds BLPIX 100%
S&P 500 SPX Rydex RYNVX 150%
S&P 500 SPX ProFunds ULPIX 200%
     
  
 

 Recommended Mutual Funds used for Sell (short) Signals

                                                
The Fund Trading System is designed to split your investment funds 50% / 50% between the Nasdaq 100 and Russell 2000. An alternative would consist of investing one third each in the Nasdaq 100, Russell 2000 and S&P 500.
    
Benchmark Index
Index
Symbol
Fund 
Company
Fund Symbol Return Ratio
Nasdaq 100 NDX ProFunds SOPIX 100% Inverse
Nasdaq 100 NDX ProFunds  USPIX  200% Inverse
Russell 2000 RUT ProFunds SHPIX 100% Inverse
Russell 2000 RUT ProFunds  UCPIX 200% Inverse
S&P 500 SPX ProFunds BRPIX 100% Inverse
S&P 500 SPX ProFunds  URPIX 200% Inverse
     
    
 
          Mutual Fund Model Portfolio Trading Strategies
                                      
                                (also used for IRA Accounts)
 
 Fund Trading provides Step-By-Step
Instruction in the "How To Trade" section.
 
           
Fund Trading includes (4) Trading Strategies to provide you
the right level of Return and Risk.
 
  Strategy A   Conservative   Long Only
  Strategy B   Growth   Long and Short
  Strategy C   Aggressive   Long with Margin
  Strategy D   Speculative   Long & Short w/ Margin
                        

Trading Strategy A is the most conservative, your are only in the market when the Trading System indicates a Buy Signal. You protect your principle in down markets by moving it into a secure interest bearing Money Market Fund or Government Bond Fund.
Trading Strategy B is designed for Growth by profiting when the market is going up or down. Over time profits have been shown to increase about 30% over Strategy A with a manageable increase in risk.
Trading Strategy C is more Aggressive. It is similar to Strategy A, you are only in the market when the Trading System indicates a Buy Signal, but with a leveraged Fund. You protect your principal in down markets by moving it into a secure interest bearing Money Market Fund or Government Bond Fund. Our performance results are based on 200% leveraged Funds, which doubles your potential for gains and losses. Leveraged Funds, like using margin, increases the risk of this strategy over strategy B. Using a smaller percentage of leverage can greatly reduce your risk.
Trading Strategy D is considered Speculative. It is similar to Strategy B, you are in the market when it is going up or down, but with leveraged Funds. Our performance results are based on 200% leveraged Funds, which doubles your potential for gains and losses. Using leveraged Funds in up and down markets increases the risk over Strategy C. Using a smaller percentage of leverage can greatly reduces your risk.  

 
Below is an expanded list of suitable Mutual Funds that can be used with the Fund Trading System.  
   
     Mutual Funds Grouped By Company Used for Buy (long) Signals
                              
         
Benchmark Index
Index 
Symbol
Fund 
Company
Fund Symbol Return Ratio
Nasdaq 100 NDX Rydex RYOCX 100%
Nasdaq 100 NDX Rydex  RYVYX  200%
Russell 2000 RUT Rydex RYMKX   150% 
S&P 500 SPX Rydex RYNVX 150%
Nasdaq 100 NDX  ProFunds  OTPIX 100%
Nasdaq 100 NDX  ProFunds UOPIX 200%
Russell 2000 RUT ProFunds SLPIX 100%
Russell 2000 RUT ProFunds  UAPIX 200%
S&P 500 SPX ProFunds BLPIX 100%
S&P 500  SPX ProFunds ULPIX  200%
Nasdaq 100 NDX Direxion n/a n/a
Nasdaq 100 NDX Direxion DXQLX 250%
Russell 2000 RUT Direxion DXRLX 250%
S&P 500 SPX Direxion DXSLX 250%
     
  
       
    Mutual Funds Grouped By Company Used for Sell (short) Signals
                                               
         
Benchmark Index
Index 
Symbol
Fund 
Company
Fund Symbol Return Ratio
Nasdaq 100 NDX Rydex RYAIX 100% Inverse
Nasdaq 100 NDX Rydex  RYVNX 
200% Inverse
Russell 2000 RUT Rydex RYSHX   100% Inverse
S&P 500 SPX Rydex RYURX 100% Inverse
S&P 500 SPX  Rydex  RYTPX 
200% Inverse
Nasdaq 100 NDX  ProFunds SOPIX  100% Inverse
Nasdaq 100 NDX ProFunds USPIX 200% Inverse
Russell 2000 RUT ProFunds  SHPIX 100% Inverse
Russell 2000  RUT ProFunds UCPIX  200% Inverse
S&P 500  SPX ProFunds BRPIX  100% Inverse
S&P 500 SPX ProFunds URPIX 200% Inverse
Nasdaq 100  NDX Direxion DXQSX 250% Inverse
Russell 2000  RUT Direxion DXRSX 250% Inverse
S&P 500 SPX Direxion PSPSX 100% Inverse
S&P 500 SPX Direxion DXSSX 250% Inverse
                                 
                      
Please visit the "How to Trade" section for step by step instruction for Trading the Mutual Fund Trading Strategies.
 
 
 
 
 
 
 
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