FundzTrader

We sometimes get requests for some color or commentary on our trades. Why don't we include that?

The systems we use are exclusively price driven, and could be best described as trend following systems. That means we spend zero time looking at fundamentals of different sectors, the economy here in the United States or the rest of the world, or any other major market indicators when it comes time to make our fund selections. We have price based rules that help us improve the odds that a selected fund is in a trend, and select the top rated funds based on those rules.

That's not to say that we think those things are unimportant, but candidly we have no edge relative to the rest of the investment world when it comes to judging the impact of those things. There are no sure things in investing, but you have to stick to those things that can give you a statistical edge.

If you're interested in learning more about the successful implementation of trend following, one of the major proponents of trend following strategies is Michael Covel. He has a web site that you may find interesting at

http://www.trendfollowing.com

He's also written a book on the topic, you can order it through Amazon at the following link:

http://fundztrader.com/trendfollowing

We don't mean to imply that fundamental analysis can't be successfully used to build an investment strategy. It's just that we haven't found an edge in that arena. In fact, a small cap value strategy is one of the few that has been shown to have a long term sustainable advantage. A good summary of some successful studies (e.g. ???) are available in the last few chapter of ìBulls Eye Investingî, by John Mauldin. You can get it from Amazon at

http://fundztrader.com/bullseye


So, when we signal a trade in our systems, we don't include any commentary simply because the commentary doesn't change. We've set up the rules in our systems to trade by, and we trade consistently within that framework. It's 100% driven by the price action. To say anything more than that would simply be posturing on our part.