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One other note regarding short term trading ... There are of course
ways to accomplish the same thing with out actually taking the short
term trades i.e. by hedging using a bear oriented fund leaving you
more or less market neutral during the period of time when you would
have been sitting in cash.
--- In amibroker@xxxxxxxxxxxxxxx, "Fred" <fctonetti@xxxx> wrote:
> See below ...
>
> --- In amibroker@xxxxxxxxxxxxxxx, "Chuck Rademacher"
> <chuck_rademacher@x> wrote:
> > Maybe some of you guys (and gals) who trade mutual funds can
answer
> a couple
> > of questions?
> >
> > 1. If there's no money to be made in (rotational trading of)
> ETF's, am I
> > correct when I assume that there's no money to be made in the
Rydex-
> like
> > funds that only mimic an index?
> >
>
> Rydex's funds are pretty much either index or sector oriented.
This
> is not the kind of thing I personally like to trade. But for
example
> if you have a system that trades SPX, NDX or RUT well or is good at
> jumping on the sector that's likely to be hot next as opposed to
the
> one that just was then it would certainly work in this scenario.
>
> > 2. Based on current rules and redemption penalties, which
families
> of
> > mutual funds can you recommend for rotational trading?
> >
>
> I don't personally trade on what one would consider to be a
> rotational basis. As I and Ken stated, erf's or the funds
management
> policies will eventually weed out most if not all the short term
> traders, especially the ones with large dollars. So if you are
> looking to trade mf's with some sort of short term oriented
> rotational system as opposed to one that trades on an intermediate
> basis picking good candidates at the beginning of a market buy and
> for the most part holding them until a market sell then you are
going
> to find yourself pretty much limited to Rydex, ProFunds & Potomac.
>
> > 3. If most (or all) such families of funds charge early
redemption
> fees, is
> > it safe to assume that you are trading these mid to long term?
> >
> > There's no sense in me working on a system that appears to do
well,
> only to
> > find that redemption fees are going to kill me. Or, is it
> possible that
> > there's enough money to be made that the fees are of little
> consequence?
> >
>
> Most do NOT yet charge erf's and as you can see from prior posts
it's
> debatable as to whether or not they will and if so what the minimum
> holding periods will be to trigger those. For short term oriented
> traders adding a 1-2% erf in a 7-14 day period would be enough to
> send them elsewhere or to a different methodology. What the SEC or
> the fund companies themselves will do with this remains to be
seen.
> They really can't afford to be too outrageous with it as every
> 401k/IRA/VA account holder on the planet will be screaming bloody
> murder.
>
> > Out of all of the above, I'm really interested in some
> recommendations on
> > mutual fund families to trade. I can then go do my own
> investigation as to
> > their fees, etc and devise my own systems that will work with
those
> fees.
> >
>
> I wouldn't think families as there is no real reason to just like
> there is no real reason to arbitrarilly limit ones trading in
stocks
> to some specific group based on whatever.
>
> > Thanks
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