Switching Mutual Fund Bets to Stay on the Market Winners
NEW YORKÛÓSome investors try to play the stock market by hitching their star to the' fastest moving mutual funds. The idea is to become a fund switcher, not merely a fund investor.</br></br>You might, for example, switch out of money market mutual funds when interest rates decline and into equity funds that specialize in stocks. When the stock market slows, you would switch back to money market funds.</br></br>Or, you might try for better performance by switching to bond funds when interest rates start to fall, then into stock funds when the stock market moves up, then into money funds when stocks decline again and interest rates rise.</br></br>An even greater refinement is to switch among equity funds, as different types of stocks exert market leadership. For example, you might ride gold stock funds until their rate of increase starts to slow, then switch to funds that specialize in blue chips or in energy stocks, if they seem to be outperforming the rest of the market.</br></br>The easiest way to switch from one fund to another is to invest with a mutual fund group. These companies offer many different types of funds, and usually let you switch just by making a phone call. Last year, more than $13.5 billion was shifted from one fund to another within family