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Straightforward Answers to Your Questions Are You a Brokerage firm? ----------------------------------- No, we are an investment management company (registered investment
advisor). Southland Investments never has possession of your money, which
is kept in a discount brokerage account in your name. Currently
we are using Charles Schwab and Co. From this special account we direct
the purchase and sale into various mutual fund families according to the
Management Plan. What Is Your Mutual Fund Management Plan? Our program combines investment in no-load (i.e., no commission)
growth and money market mutual funds with a market trend tracking system.
What Is A Market Trend Tracking System? It is a methodical system that utilizes various indicators to identify trends in mutual fund prices. Essentially, it tells us when to buy and sell mutual funds and eliminates mistakes often made in emotional trading. There are two objectives to our program:
What Are The Advantages Of Market Tracking Over a "Buy And Hold" Approach? Most Investors buy and hold investments. That is, they buy stocks or mutual funds and hold them through rising and falling markets. They have no specific plan and are just hoping the funds will have risen when they need their money. Even with mutual funds, most mutual fund managers also stay fully invested in stocks through these rising and falling markets. The result is that during rising markets investors make money, and during falling markets they lose their gain. The key to more successful investing is to be invested in
rising markets and out of them in falling markets. Tracking and heeding
market trends can prevent major losses. What Types of Funds Do You Use? There are two types of funds in our Fund Management Plan—a
money market fund and various equity growth mutual funds. Money Market Fund—We generally use a government money
market fund. This consists of only short term government securities and
is traditionally considered more secure than most other investments. The
price of security is, of course, lower returns. Equity Growth Mutual Funds —We invest in whichever
growth fund offers the best combination of potential increase and low
downside risk. The specific funds we choose vary as conditions change
in the stock market and the economy. It is an investment company that pools money from investors
to purchase and manage a diversified portfolio of stocks. Instead
of buying individual stocks, investors buy shares in this managed portfolio.
What Is The Difference Between “Load” And “No-Load” Funds?
Can I Follow Mutual Fund Prices? Sure. Prices are published every day in the financial section
of major newspapers on the mutual funds page, or are available via the
internet. What Are The Advantages Of The Mutual Fund Management Plan?
What Are The Disadvantages Of Such A Plan? There is only one situation in which the Mutual Fund Management
Plan won’t work effectively, and even then the repercussions are not particularly
costly. It is when the Stock Market, due to economic conditions, fails
to trend either upward or downward, and stays in a sideways pattern resulting
in only minor fluctuations. This is a perfectly normal occurrence within
the business cycle, however, it may give a false signal indicating an
uptrend, only to be followed by a sell signal. Such was the case throughout
most of 1997, and we just held steady. The next major uptrend started
in November, 1998 rewarding us for our patience during the previous year.
What Are The Risks Involved With Mutual Funds? A mutual fund reduces the risk of large price fluctuations
through careful selection of securities, and by maintaining a diversified
portfolio. There is much less risk in owning shares in 50 different companies
than in owning stock in one or two companies. In spite of diversification,
however, share prices will decline in a falling market. This is why proper
trend tracking of mutual fund purchases and sales is important. What Are The Chances Of A Big Loss? They are very small because we take a series of precautions to avoid losses.
You have immediate access to your money at all times. All
accounts except IRA plans have check writing privileges that enable clients
to write checks of $500 or more against their money market accounts. Very
few managed investment accounts allow such direct access to your money.
What If I Want A Monthly Income From My Investment? No problem. We regularly work with individuals who need monthly
income. Once you establish the monthly amount to be withdrawn, a check
for that amount can be sent to you automatically. Even with regular withdrawals,
this plan allows you to grow your investment while receiving monthly income.
What Information Will I Need For Income Taxes? You will need dividend and capital gain information which
will be sent to you directly by Charles Schwab & Co. Capital gains
and losses on the exchanges between the funds need to be calculated. We
suggest you keep copies of all confirmations from Charles Schwab for this
purpose. However, we also provide cost basis calculations to all clients
free of charge. These will greatly assist your tax preparer in completing
your return. Is This A Suitable Investment For A Retirement Plan? Yes, it’s ideal for retirement plans, including 401k's, since
it provides liquidity, diversification, low risk, professional management
and your gains are tax deferred. Our minimum size account is only $10,000 for individuals,
IRA or Sep-IRA
customers. Because of the historical performance and the liquidity it
is
recommended that you apply all of your available funds, in order to
maximize your returns. How Are You Different From Other Market Tracking Firms And Why Should I Deal With You?
Why Would I Need Help Managing My Investments? Maybe you don't. However, if you are trying to determine whether you should manage your own investments or use our services, here are a few questions you might want to ask yourself:
Should I Wait Until The Stock Market Improves Before Starting To Invest? Emphatically, no. There are two reasons why you should not wait.
If I Decide To Invest With Your Firm, How Should I Proceed? Simply call us at (714) 841-5804 or email us at ulli@southlandinvestment.com
and we will schedule an appointment to meet with you if possible, to ascertain
that our investment goals and philosophies are compatible. Don’t hesitate
to call if you have questions but haven’t decided whether to start an
account. There is no obligation involved with this initial discussion.
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