The Congressional Effect Fund (no joke)

http://www.congressionalfund.com/ ^ | 03/16/2009 | Liberty1970

[Liberty1970]

Please excuse the vanity, but hopefully this will be of value to someone. http://www.congressionalfund.com/ is the website for a fund started up last year that I think might be of natural interest to Freepers. I just learned about it and have to admit I'm intrigued.

The premise behind the find is that old saw about how no one is safe while Congress is in session. The fund managers are taking that literally, claiming that research shows the stock market performs MUCH better while Congress is out of session than in session. Therefore, they pull out and sit on cash while it is in session, investing in the S&P500 while Congress is not meeting.

(This might explain something I've ofter wondered about - I seem to recall that August and December are two of the best months for stocks. And isn't that when congresscritters are typically off?)

Anyway, I'd be curious as to what others think before I jumped in. With so few decent investment choices these days, seemingly, this might make it onto my short list, even with the 1.99% expense ratio.

[JudgemAll]

It’s typical for investments to play the volatility profit card before and during monetary announcements. Since volatility goes up during congress crap, they bet on options whose price temporarily and suddenly surge.

It’s an interesting fund model which could be developed to all spheres of “announcements”, and both expected finds or opposite loss/disaster anticipations.

Other things to look at are:

stock buy backs by corporation. Buy when they buy their own, not when they float or issue, except maybe for the minute of euphoria (not these days)

Bear depression stocks are low cost consumables companies and entertainment, the activities people have when out of work.

Then you got anti inflation hedges such as metals and other semiraw reusables as well as revenue tanks, ie if you make dividends, reinvesting those in favorable hedging engines such as swaps or even simple bonds.

Last but not least are death oriented scavenger businesses such as autowreckers, parts companies, lawyer backed entertainment companies such as Microsoft or Sirius I heard.

It’s a jacka$$ market these days.

[waverna]

The high expense ratio makes me think its just a gimmick. A typical index fund, since it is not actively managed, will have an expense ratio under 1%. This investment basically moves in and out of the S&P index.