Conference nyoss1::market_investing

    Starting last week, the Wall Street Journal has started putting in
    information (from Lipper Analytical Services) which shows the
    performance of funds over different periods. For example, onone day,
    you wmay get 26-week and 3-year performance of all funds, and on
    another, you may get 39-week and 4-year performance, and you may get
    52-week and 5-year performance on a third day. This may it very
    convenient to get a lot of information about funds over a period of
    time from just a few issues of the Wall Street Journal.
    
    ... Kris Chandrasekhar

    Here's a question:
    
    There are certain funds which require a rather hefty investment.(one,I
    read about recently wants $25K minimum) Do these funds generally return
    higher dividends? There must be some reason for the high minimum right?
    No,I'm not rich and considering such a fund right now,but,someday when
    I retire (God willing) and take my lump-sum,such a fund might be
    tempting.
    
    Ken

    re: .2
    
    A fund with a high minimum, when compared to an otherwise identical
    fund with a lower minimum, will probably have a lower expense ratio. 
    It costs the same amount to mail a statement/proxy/whatever to somebody
    with $25K invested as to somebody with $1K invested.
    

    re .3
    
    I used to think there was a relationship between high minimums and
    relatively lower expenses until I actually looked close; there SHOULD
    be, but examination did not support that.  Kilpinger (and others)
    frequently publishes summaries of the jillion or so funds.  Of course,
    the next summary will cause this comment to be wrong. :-)
    
    FWIW
    
    Dave

    Maybe this has been asked before (it probably has)...if it has,a
    pointer is all I need...
    
    Concerning mutual funds (or stocks I guess): Exactly how is the "yield"
    calculated? I mean,what relationship does that number have with the
    other figures you always see concerning mutual funds? (one,five and ten
    year returns) Is this "yield" figure (which is *always* lower than the
    return numbers) the number you should be using in your retirement
    calculations? (you know,when they ask for a figure describing how much
    you expect your investments to return over the next twenty years or so)
    
    Ken

    geez...I guess I really threw a "curve ball" in -1
    
    Ken

    Well, not really a curve, perhaps just a shot at trivia...:-)
    
    Seriously, I seem to remember that each Fund Prospectus has a quicky
    explanation of how THEY measure yield; I'll presume it is a standard
    calculation.  
    
    Dave

    
    
    
    I have a question and it seemed to fit under a Mutual Funds general
    topic. My wife and I are WAY too invested in CD's and Savings, and 
    are looking into higher earnings. I recently had an 8% CD that expired
    and split the money between short term bond funds and an
    international stock fund. We can tolerate a some risk with this 
    money , as it is less than 20% of our total savings. When a correction
    in the U.S. market takes place (6 months? a year? who knows...) 
    then we'll also invest in a couple of good U.S. stock funds.
    Anyway, (my question) when do you decide that a mutual fund is not 
    performing, and get out? I understand the existence of business cycles
    and have a LONG time to go in the market (I'm 32), but when do you 
    decide that a particular mutual fund just isn't cutting it?
    Some funds can obviously go for one or two years and not make anything,
    and then turn a 30% gain the next year. Do most people just set an 
    arbitrary time limit or loss limit before they bail out?
    
    Doug
    
    
    BTW... It's really interesting reading some of the notes from last
    year at this time questioning if the U.S. Stock market has "topped out".
    In retrospect, it wasn't even close. Now (a year later) I am asking 
    myself these same things. All the charts and all the historic data seem
    to lead to a 15% correction sometime within the next year. As one who 
    is ready to get in, I'd like it to crash sometime soon!
    
     

    
    You have to look at funds in relation to other funds in the same
    general categories, and/or in relation to various indexes.
    
    If a blue-chip mutual fund loses 10% in a year, and the S&P500 loses 15%,
    then the fund is doing well - likely, if the fund returns 10% and the
    S&P500 gains 20%, then the fund isn't doing particularly well.
    
     

    
    
        >You have to look at funds in relation to other funds in the same
        >general categories, and/or in relation to various indexes.
        >
        >If a blue-chip mutual fund loses 10% in a year, and the S&P500
        >loses 15%,
    
        Is there a complete listing somewhere ( a magazine/paper/etc) 
        that breaks the funds out into specific categories of similar funds?
        I look in Kiplingers (Mutual Fund monitor) and other magazines
        (Forbes, Money, Smart Money) and generally get very broad fund 
        categories (Aggressive Growth/Long-Term Growth/
        International&Global/ etc). It sounds like I will need to compare 
        apples-to-apples to truly measure a fund, and that I will need 
        more than broad category descriptions of funds. 
    
    
        doug
    

    re: .10
    
    Go into a larger library and get the Morningstar book on mutual funds
    (don't know the 'official' name).  It has comparative rankings of tons
    and tons of funds...
    

    
    
    Thanks!
    
    
    doug
    

I find that the Mutual Fund Performance Guide published by C. Schwab is a great
place to get comparison information on MFs.  They break the funds down by such
categories as Agressive Growth, Growth, Growth and Income, Equity Income,
International, Index etc and they have several categories for bond funds as
well.  I find that this is a sufficient number of categories, but it sounds like
you may want a finer breakdown.

For each fund there is a (very) brief description of the investment strategy,
minimum investment amounts, loads (if any) extensive historical data, Beta,
turnover rate, total fund assets, risk adjusted return rating, rank within the
category and probably some other stuff.  

It does not provide an in-depth analysis of the fund or level of detail one
finds in the Mornigstar report, but it does put many funds on the same page for
quick comparison.  I find that with the Schwab guide I can narrow my choices
down to 2 or 3 funds within a category and then go to the library for more
detail on those few via Morningstar.

The guide is free and is published quarterly (the next one is due out next week).

I just stop by the Burlington office to pick up the latest issue from time to 
time.  It is located at 5 Burlington Woods off of Mall Road (toward the Rt. 3A 
end) in suite 200.  Their phone number is (617)229-2992.  Schwab also has 
offices in Chestnut Hill (on the east-bound side of Rt. 9 across from the mall) 
and in Boston.  Schwab has a national toll-free number for their mutual fund 
operation as well: 1-800-2NO-LOAD (ext. 15) {cute, eh?}

    
    
    
    I checked out Morningstar at my local library... it was just what
    I was looking for. 
    
    
    
    doug
    

    I requested and got a prospectus on Scudder's Global Fund. It looks
    good. Thinking about diversifying into that fund. Anybody got anything
    good or bad to say about that?
    
    Ken

re >                    <<< Note 376.17 by CSC32::K_BOUCHARD >>>
>                            -< Scudder Global Fund >-

Ken,

Scudder Global is only about average in performance; actually, quite
unimpressive.  If you really feel the urge to go global, you might want to
check out "Merrill Lynch Global Allocation A".  It has consistenly shown
superior Global Fund performance - net fees -, particularly in "up" market
scenarios (the only good reason to get into global markets is if you believe
they are about to go up); unfortunately MLGLAA charges a 6.5% sales charge. 

If the 6.5% bothers you, look into USAA Cornerstone, Janus Worldwide, and 
Fidelity Worldwide.  All are doing very well compared to other Global funds and 
have no fees.

FWIW, if I were ready to move into a global fund, I would probably go with the 
6.5% bribe and pick up the MLGAA. NET ROI would overcome my aversion to fees; 
greed overcomes other emotions.

As always, For What It's Worth,

Dave

    Re. .17
    
    I have been in Scudder Global for about 2 years now, but consistently
    DCA'ing into it for 18 mnths. My return to date is over 20%. I am 
    quite happy with it. 

    
    re: 6.5% load
    
    say what??
    
    re: Global
    
    the only thing I'll add is that the Global fund invests in both U.S.
    and international securities.  if you're using this for international
    diversification of an existing U.S. portfolio, you might consider the
    Scudder International fund, also no load, which is purely non-U.S. and
    has been a top performer.  The only advantage is that it may help you
    allocate U.S. vs non-U.S. assets a little easier.
    
    /jim

    RE .17
    
    I've been in Janus Worldwide for about 2 years and Fidelity International 
    Growth and Income for about 3 months. I'm happy with both.
    
    BTW, Donoghue's Advisory letter (I forget the title of his newsletter)
    has a SELL on Janus WW and a BUY on Fidelity Int'l Growth & Income. I'm
    keeping my Janus WW temporarily,at least,in spite of the advice. 
    

    I'm reconsidering my moves. At first,I was going to put some of the
    kid's college money from Scudder Cap. Growth into Global. Then,someone
    said it's only average and to look into International fund. So,I called
    Scudder and got some info on that. Know what? That too (International)
    falls far short of what I'd been expecting. (for some crazy reason,I'd
    been expecting phenominal growth) I think I'll keep the kids in Capital
    Growth (which is around 18% over ten years) and maybe put some of my
    IRA in International. (after all,my IRA is much longer term than the
    college funds which will have to be tapped into in six years)
    
    Ken

	Re. .22

	What about 20th Century Giftrust or Ultra? I believe their 10 year
	record is better than 18% p.a. 

	Unless, of course you are "married" to Scudder. Even in that case, you
	must be considering moving to Charles Schwab for a 1-stop shop, 
	no :-?

    Re: .22
    
    Its true that most Int'l funds have lagged the US market the last few
    years (particularly the ones that have had more exposure to Japan &
    Europe). But I think, these Int'l equity funds will do well in the next
    few years (my opinion, of course) due to falling rates aboard and
    europe coming out of reccession. I have been in Scudder Int'l equity
    fund for over 3 years now. This is the first year that it has been
    doing decently and my feeling is that this should go on for a while.
    
    My $0.2 worth
    
    raja

    Just put half my IRA in International fund. No,I'm not MARRIED to
    Scudder but they *have* done well for me and I hope that will continue.
    I learned my lesson last time I got out of one family of funds and into
    another just because of apparently higher earnings. My strategy now is
    a simple one: Find a reputable fund and stick with it through highs and
    lows. (pretty simplistic,huh?) You'll come out well in the long run. Of
    course,that strategy only works for the long haul,but hey,I'm
    definitely not out to make a million bucks tomorrow.
    
    Ken

I have been looking at some (new) mutual funds offered by Gabelli Funds.  
They have an intial period (4-6 months or so) where there is no load 
and a reasonable minimum investment ($1000).  Then at a certain date
(either when they have X number of shareholders or $Y), they raise the 
minimum investment to $25K and impose a load.  I assume the initial no 
load offering and low minimum investment is to build up the fund to 
some critical mass -- but I can't figure out what would later motivate 
a new investor to put down $25K plus a load !!??  Any thoughts??

    Only a guess but I think they might be trying to convince people that
    the fund is *really* good. There *are* alot of people who believe that
    "loaded" funds are better by definition!
    
    Ken

    
    re: .-1
    
    	ayup.  There's still a lot of people that believe that you get
    	what you pay for.  To be sure, you pay for what you get, and
    	you don't get what you don't pay for, but it doesn't seem to 
    	be the case that you don't pay for what you don't get.
    

What about the significant increase in minimum investment from $1000 
to $25,000??  Any thoughts?? thanks. Barb

    I've been over and over and over it and I'm still not sure about the 
    ACTUAL GAIN (minus taxes) on Mutual funds. In Money Magazine they show
    1 year, 3 year, and 5 year returns....most of which are double digit
    returns.
    Ok ,,,now,,,these quotes are the amount each share has gained. Step in
    and correct me anytime now...If it's a loaded fund,,there's 3-5% you
    have to subtract,,management fees of .75%,,,,12b sometimes of .22%.
    Then there's the little foot note saying other additional fees like
    consultant fees,,lawyer costs could be charged also.
    When they publish the 1 year 3 year 5 year,,,why don't you ever see a
    column that says "ACTUAL GAIN AFTER ALL FEES ARE CHARGED". Is there
    something they are trying to hide??
    
    So on average in a good mutual fund,,if I see a report of 21% gain,,
    what would I really get??
    
                                  -Very Confused
    

You might try going to library and reading the User's
Guide section of Morningstar Reports.  They do a fairly
decent job of explaining their numbers.  They provide
a variety of both raw and load-adjusted performance figures.

Management fees are generally accouted for in all cases,
since they are reflected in the price of the fund.  Likewise
with the 12b-1 fees.  Usually it's just the load that
makes a difference.  

   Gary

It's not Money Magazine's fault.  The rules for reporting results are SEC
regulated.  Management fees, as well as, 12b-1 fees will already be factored
into the results.  Loads will never be factored into the results.  Why...because
the internal management fee and 12b-1 fees are known at the time of
reporting..Loads are only factored in at time of sale or redemption, and are
often not hard and fast.  There is such a things as first time loads, decending
loads, redemption only loads, early redemption loads, loads that aren't in
effect when one switches from that families other funds, performance loads, and
probally a whole lot more that I've forgotten.  Due to the complexity of load
structures the SEC has determined that loads would not be factored into the
gains for a mutual fund.  The internal fees and 12b-1 fee do not vary from
customer to customer so they will be included in the results.  The same is true
for results after taxes...for bond funds dividends are considered income, and
tax rates vary from customer to customer (28% bracket, 31% bracket, etc).  So
the results will not be shown in the totals.  Some publications (Kiplinger's for
example) do report what the fund would be worth if $1000 was invested 1 year
ago.  This will take into account the loads, but not taxes.  The Morningstar
5-star investor estimates a funds potential capital gains, but again this is
just an estimate.  The other thing that should be noted that the 3 and 5 year
numbers (most of the time) are annualized (so 21% would be like putting it into
an account that go 21% return compounded annualy).

/mtb

    re.31 So when they quote the percent gain,,,you are saying ALL the
    management fees have already been subtracted?? So a 21% gain is
    actually a 21% gain if it has no-load...
    
                                   -Steve

so are the 12b-1 fees...so if there is no loads of any kind you have a 21% gain.
Remember this also does not take into account taxes.  If the fund paid gains,
you are responsible for the taxes on it.

/mtb

    Great,,,,thanks for the replies. I was trying to figure actual gain
    on a bunch of possible future funds for me by subtracting the fees and
    loads from the quoted gains. Seems like nothing is left after that.
    
    Now I know what funds I want but the market seems to be headed south...
    I think I will wait a while............
    I did get into the DEC SAVE's Plan last month anyway.
    
                                       -Steve

    I'm fairly new to mutual fund investing. Can anyone show me where to
    get investment strategies to match my goals and portfolio?
    
    Thanks,
    
    Steve

Seriously, probably one very good first step would be to print out a complete 
directory of this conference and start reading.  We have had numerous 
"strategy" discussions with serious, differing points-of-view; many defended to 
the death :-).  That all comprises a very effective primer.

Luck,

Dave

    Fidelity has a "kit" you can get for free which will do
    an approximate and generic first cut for you, as well
    as having a mild intro. to investing.
    
    		-John Bishop

    
    To many funds, so little time!
    
    Having recently sold all my Digital stock (Finally!) I now have a chunk
    of cash that I have to do something with and for some reason a mutual
    fund comes to mind. 
    
    Let's assume that I have $100K (I don't but it's a nice number) and
    have no outstanding debts and that I'm fairly young (40ish) and are
    looking for a fairly aggressive investment, what would you do? Part of
    the money is in the stock market..
    
    Looking for free advice...
    
    /Peter

    I have big chunks of my aggressive portfolio in Twentieth Century
    Ultra and the Vanguard 500.  You have to be prepared for a bumpy
    ride, esp. with Ultra, and hold for the long term, say ten years.
    

    Take a look at some of Vanguard's new "managed" offerings.  Low cost
    and they manage them to lower capital gains.  And, since you sold 
    stock, I'd plow it all right back in without DCAing.
    
    I also like Oakmark and a value, large cap fund.  Low expenses, low 
    turnover, hates hi-tech, makes money.
    
    FWIW, Bob

    
    	I, too, am a big Oakmark fan (say 40% of your bucks). I'd also
    put some into International funds like Scudder Int'l Stock, or T.
    Rowe Price Int'l Stock (both no-loads, great ten year records, etc.).
    
    	I'd also think about 10-15% into something like Fidelity Select
    Electronics which is mostly semiconductor companies, most of which
    have had the stuffing kicked out of their price for the past six
    months and are ripe for a good comeback, And as a five to ten year
    hold, who is gonna do better than Chipmakers?
    
    	Then I'd leave 20% in cash, and spend a few bucks on myself (like
    a new multimedia PC with a 17-21" screen)...
    
    		the Greyhawk

Money magazine did a recent issue on this  (Aug or Nov '95?). 
They advocate putting the lion's share of your equity investment
into large company index funds, with rest divided between "market
beaters" and small to mid-cap funds. Their reasoning for this is:

  Index funds - Large company stocks are "analyzed to 
  death", so actively managed funds are unlikely to significantly 
  outperform the index.  These funds (should) have lower expense
  ratios because of low turnover and low analyst overhead.  
  A couple of examples are Vanguard Index 500, Fidelity Market
  Index.  Quant funds (e.g. Fidelity Disciplined Equity) are
  modeled after an index, with some flexibility on the fund 
  manager's part on allocation to specific issues.

  Market beaters - These are funds that have a good record of
  outperforming the S&P 500.  I think one of the examples they
  give is Neuberger & Berman Guardian. 

  Small to mid-cap funds - Smaller company stocks are not as 
  exhaustively analyzed as the large company stocks, so a good 
  manager can be reasonably expected to outperform.

They also had recommendations about bonds, but I don't remember 
what they were.

Not to say that I totally agree with this strategy, but it does 
have its good points.

Wes

    From the 2/95 issue of Smart Money (pg. 71) they chose 7 funds with the
    following criteria:
    
    	"Demonstrating a pattern of outstanding performance in market
    	conditions similar to the ones we currently face.  (They modeled 
    	'96 after '92 and '94.) ...looking only at managers in the top 20%
    	in '92 and top 30% in '94...excluded those without 32 yr. record...
    	eliminated those with sales loads...had 18 finalists...then
    	interviewed each manager and analysed each portfolio (!) and had
    	six "winners"....then they added a int'l fund.
    
    The "Best Seven For 1996" are:
    
    PBHG Growth
    Oakmark
    Wasatch Mid-Cap
    Mutual Qualified
    Neuberger $ Berman Focus
    Fidelity Stock Selector
    Hotchkis & Wilely Int'l

    oops.

    
    
    I would put 
    
    	-50% in an S&P 500 index fund; this has low cost
         and low turnover so you don't pay gobs of tax each year.
    
        - 20% in a small cap growth fund
    
    	- 15% in an aggressive stock fund (aka market-beater)
    
    	- 15% in an international fund
    
    Kaizad