"Why Index Mutual Funds? " - Bill Lussenheide
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Why should you own shares of an “Index Mutual Fund”? Index Mutual Funds own some of the best-known companies in America and outperform most mutual funds.


What Are Indexes?

The Dow, the S&P 500, the Nasdaq 100, the Wilshire 5000, these are all indexes. Each is a group of stocks chosen to represent portions of the stock market. There are index mutual investments based on the Standard &Poor's 500 (the stocks of the 500 leading companies in America) and the Nasdaq 100 (the largest capitalization 100 stocks of the Nasdaq ). Heard of General Electric, Tupperware, and Exxon, Wal-Mart or Ford? If you invest in the S&P 500, you are a part owner of these companies. The Nasdaq 100 has technology companies such as Microsoft, Dell, and Yahoo, but also contains many low-tech growth companies such as Starbucks, Costco, and Bed Bath & Beyond.


Why Should We Only Invest In Index Mutual Funds?
A broad-market index matches as closely as possible the return of the overall stock market. What's so great about just being average? Most actively managed mutual funds find it hard just to make that average! In fact, less than 20% of actively managed diversified mutual funds have outperformed the S&P 500 over the last 10 years. This poor record, combined with the tremendous diversification that Index Mutual Funds provide, versus most actively mutual funds, make them the perfect choice for your portfolio.


Why Should We Invest In Index Mutual Funds Offered By Lussenheide Capital Management, Inc.?

In our management of assets at Lussenheide Capital Management, Inc. we believe in the value of proactive management by moving to the safety of Money Market Funds when our trend following systems indicate a high probability of a market moving down. We have found that this not only reduces risk historically by about 33%, but actually enhances returns as well. (Click on our icon “Historical Performance” on the newsletter page for past results using a simple timing system). Historically our timing systems that we use for management trade on an average of 2 to 4 times per year. Many mutual fund companies discourage or simply do not allow “switching”, especially switches that encompass a move of 100% of a portfolio either in or out of the market. The Index Mutual Funds that we use for management are designed for and used by professional traders and money managers. They allow switches as often as the manager desires or needs.


Additionally, there are no charges, fees or sales loads on either the purchase, trade, switch or redemption of these mutual funds as opposed to the policies of many other mutual fund families. With all of these combined characteristics they make for the ideal investments in assembling a diversified portfolio of index funds to fit your individual needs, goals and risk tolerance. This regardless of whether it be in Stock, International Stock or Bond Investments.

For all of the above reasons, we continue to offer these excellent index products for our clients.



Copyright © 2003 Lussenheide Capital Management Inc