Confused about which Mutual Funds to buy? 
Are you using Morningstar Star Ratings?
What kind of performance edge you can expect from Morningstar?


Please read this before you invest another dollar using Morninstar's rating systems!


With literally tens of thousand of mutual funds to choose from, it’s hard to know where to begin.  But, it seem that everywhere you look in the investment world, when discussing mutual fund options, people want to give you the Morningstar rating on the fund.  These ratings are in magazine articles, on brokerage sites, and sometimes on the fund web sites themselves.  Since everyone seems to use them, you probably assume they must give you some big edge.

We've seen some articles in the past that were not very complimentary of the Morningstar system.  But, giving them the benefit of the doubt, we though we'd take a look around Morningstar’s own web site, and just see how useful these ratings are. If anyone could paint a rosy picture, it would seem they could.


Let's start with the article “Getting the Most Out of Star Ratings and Analyst Picks.”  Here you find this quote:

“How Not to Use It

Although the star rating can be a handy tool for monitoring your funds' performance, you shouldn't construe it as a buy and sell signal. Because we recalculate funds' star ratings every month, funds frequently gain or lose a star, and that action can best be described as "noise" that you should tune out. Moreover, a fund isn't automatically worth buying just because it earns a 5-star rating. .... ”



Of course, that’s what everyone wants to do with them, so why say that? It appears they say that because it's true!

Well, here's how well the star ratings really work (at least according to Morningstar).  In” Rating the Star Rating” on the Morningstar site, the predictive performance of the star ratings was measured over the 2 years ending June 2005.  Here are the average returns over that period:

5 Star Funds   15.53 %
4 Star Funds   14.19 %
3 Star Funds   13.92 %
2 Star Funds   13.81 %
1 Star Funds   13.24 %


All this fuss over star ratings and the spread from high to low is just over 2% in return! 

But they also look at other fund categories.  The 3 year returns for international equity funds broke down like this:

5 Star Funds   15.3 %
4 Star Funds   15.1 %
3 Star Funds   14.1 %
2 Star Funds   12.5 %
1 Star Funds   16.7 %

The 1 star funds had the best returns of all!  I'll bet that's not quite the edge you were looking for. The article sums it up, “Investing is much too complex for any single measure to sum up the entire merit of a security.”  OK, then why have them at all?

So, what funds should I invest in? 





 That’s where we can help!


Here’s what we offer.  We currently publish two model portfolios for Fidelity funds, one for Select funds (we’ve published it since February 2002).  The other for Fidelity's total equity fund family (published since July 2005).  Simple to follow --  The Select system trades about twice a month, and the Equity fund system trades 4 times a year.  Simple enough for anyone to follow.

How have they done? 

In the first 4 years that we’ve published the Select system (remember this includes 2002, which was a very BAD year for the market), the S&P 500 was up a paltry 21% (about 4.9%/yr), while our Select Fund system was up 83% (over 16%/yr), or 4 TIMES AS MUCH TOTAL RETURN.  And our Equity fund system backtests even higher.  That kind of difference worth paying for!




So how much do I charge for these systems?  Here’s the great news.  THEY ARE FREE.  That’s right, FREE. 


So start investing today.  You get the system for free. You can start making money with these systems now.
So, click the link below to sign up.  All we ask is your name and email address.  And no, I hate spam as much as you do.  We may occasionally send out updates and other information, but we will not ever sell, rent, loan, or otherwise give out your email address to anyone else.  So, do it now and start making some real money in the market today!


Click here to create a FREE user account now!


When you sign up, you get web access to:

  1. ETF System Trades
  2. ETF Fund Rankings (Pick your own trades)
  3. Fidelity Equity Fund System Trades
  4. Fidelity Select Fund System Trades
  5. Fidelity Seasonal System Trades
  6. Fidelity Select Fund rankings (You can time your own trades)
  7. Fidelity Equity Fund rankings (You can use these to trade the funds available in your account)

Important note: As trading systems become popular, they start to lose their edge as more people trade them. So to guard against that, we are going to limit these free systems to the first 1000 users that sign up. These are the systems we trade ourselves, so we want them to continue working. Too many people trading them will break them, so we really are going to limit the number of users. Sign up today before we close them down!

Signing up is simple. Just HERE, fill out the form with your name and email information, pick a user name and password, and you're done. We will email you more information on using the system, and it really is free.



By the way, we hate spam as much as you do. We promise we won't rent, sell, or trade your email address when you sign up. And if you change your mind you can easily remove your email address from our database.