FastTrack - A Mutual Fund Traders/Investors Friend - Jim Hill
There are many monthly/weekly/hotline/software services available for individuals interested in trading or investing in mutual funds.
Of course, you do not even have to use these if you access a data service and use technical analysis software. But I find that there is a combination software/data service only for mutual funds that meets my investment needs - FastTrack.
FastTrack (FT) is a data service that follows over 800 mutual funds and indexes and uses its own proprietary software for analysis and charting. It has its own built-in data communication service and each day you dial an 800 number to download daily info. In addition, one of the authors, Paul Charbonet, will about once a week give his view of the market and his selection of mutual funds. For the last several years his advice has been very good. In addition, there are comments about fund groups, select funds, trading ideas and other useful info.
There are two primary approaches one can use: selection and timing. To help you decide which mutual fund to select, FT divides the funds into fund groups (such as Fidelity, Fidelity Selects, Benham), indexes (DJ-20, DJ-30, etc.), topical groups (such as Health, Aggressive, Schwab No Load No Fee, Muni-Bonds and many others).
You can select one of the smaller topical groups, or fund groups, or the one category that has all the funds in it. You can create your own fund group if you have your favorite funds.
So, how can you use FT for selection? I will assume you want to trade only Fidelity Select funds. You would load the Fidelity Select Funds, and then choose an index to compare all funds against.
The index can be any fund or index in the entire list of funds. This method of selection is when you always want to be in the market; you choose the best fund of a pair of funds.
You choose the time frame of analysis, and you look at charts in color. You can also use Stochastics, MACD, Moving Average, Momentum and Relative Strength for technical analysis. However, I find the best technical tool is their own; it is called AccuTrack Indicator.
It is a combination momentum and relative strength index that has two variable parameters. It is excellent at enabling one to develop strategies for selecting the best mutual fund of a pair. The indicator is disclosed, and you could program it with software such as TradeStation, but if you want a complete package, it is very good.
As of the date I am writing this article, April 14, 1994, my indicator for the general market is still negative and it will not be positive in the near future. It is an easy indicator to set up in FT and easy to follow each day.
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