Julie, I recommend you read this book if you have not already, it is called Against The Gods, despite the title which may be a little misleading it is a book about investing and the history and pyschology of risk. It is one of the best books I have read about investment. I wish my MBA program made it required reading anyway one basic thrust of the book is that most of the time investment managers with all their technology can't beat the market indexes like the Dow and others on any consistent basis. I think what this means for you from my understanding of the book:

1)Don't pay for management expertise on any long term basis because you could probably have better returns than them, so no front end or back loaded mutual funds, ok? go for no-load mutual funds

2)Most things regress to the mean over time, what it means to you is that after awhile price that are sky high will eventually go down often towards their historical averages and the opposite also things that are very low soon will rise again often toward their historical averages.

One neat tip from the book is some research on mutual funds look for funds that are were down the previous year and are now up in value usually fund managers can ride this momemtum for about 3 years before we see regression to the mean so you can find funds like this ride it for two years, take your cash out then ride another one, let me say in theory that is.

Buy the book, it's great stuff and too techy for all those non present value laplace transform calculus types.




Mike Enlow, high school dropout and ex-private eye now internet guru get his free offer