thinkMoney - Winter 2016 30

January 2016

In this issue:

  • Tricks Fund Manages Only Dream Of
  • Long Tooth, Busted Jaw, (Three Signs A Trend May End)
  • How To Resuscitate Your Dead Investments
  • Trading Futures In 3-D

Let's Have a Little Mutual Fun(d)

• YOU’D HAVE TO GO back to the invention of the wheel to pinpoint when the first financial advisor touted the virtues of a long-term managed approach using mutual funds. Kidding aside, there’s no arguing that this has been a successful strategy for many during certain periods over the years when there were fewer choices. But in recent years, being an individual trader or investor has gotten easier, cheaper, and with the ability to trade options in appropriately approved retirement accounts, much more diverse.

Today, for many fund managers, outperforming indexes and individual stock portfolios can be a crapshoot. And there are a few truths of mutual fund investing left out of all the marketing malaise that have led traders and investors to conclude mutual fund managers have some sort of upper hand.

As a trader, you might be asking how this applies to you. Despite your lightning-speed trigger fingers and short-term strategies, there’s a high likelihood that some of your profits wind up in longer term investments like, well, mutual funds. So in the spirit of an “eyes wide open” approach, what we’re suggesting is that you continue to think like a trader while acting like an investor. For some of these insights, see our cover story on page 16.

And if you do happen to own mutual funds or some other asset that you can’t trade options on, but you’d like to implement a strategy designed to generate income or set up a hedge, there’s a technique that can help you that we discuss in “How to Resuscitate Your Dead Investments” on page 24.

Mutual funds aside, traders ride trends, period. And one of the toughest struggles a trader has is to figure out when a trend is about to break a leg. Of course, no one can predict the future, and unless your name is Nostradamus, you’re most likely just guessing when this might happen. The good news is there are a few chart indicators that you could pay closer attention to that might help make your analysis a bit less subjective. For more, read “Long Tooth, Busted Jaw” on page 20.

By the time this 30th issue of thinkMoney is out, 2016 interest rate mania and election year smear campaigns will be in full force. And while we don’t know where the market’s going, now might be a good time to bone up on the options strategies and hedging techniques that we’ve covered since the bull market began in 2009.

For the best of the best, check out our archives at

Happy Trading,
Kevin Lund
Editor-in-Chief, thinkMoney