No. of Recommendations: 3
To me it's plain as the nose on your face that it makes no sense to buy a fund which is hugely overweight a few stocks unless you think you personally have a very good reason to be overweight those specific stocks at their current valuations.
I guess the current reason would be because that handful of stocks has been in a very strong trend. Remember: "The trend is your friend."
And, actually, why not just buy those top ~10 stocks instead of the fund, since they dominate just about _all_ of the major funds.
I guess 2001 is a long time ago--it's a dwindling population of current investors who remember their investments' behaviour the last time the market was this concentrated in a few "can't lose at any price" names : )
Perhaps it is just wishful thinking, but.....
The Growth Trend Timing that I use now (and didn't know about back then) had you sell on 1/7/2001 at S&P500 1318.55, and had you out (except for a couple of short whipsaws) until 4/21/2003 at S&P500 898.81. (Adj close from Yahoo)
The 43 week SMA instead of GTT would take you out sooner, on 10/8/2000 at 1374.17
