From: milo@cbnews.cb.att.com (guy.f.klose)
Subject: Re: MFIA (Fidelity) query
Organization: AT&T
Distribution: usa
Date: Fri, 31 Jul 1992 12:41:39 GMT

In article <1992Jul29.185502.29420@cactus.org>, sombar@cactus.org (Steven Sombar) writes:
> I recently received a flyer inviting me to join the "Mutual Fund 
> Investor's Association", a group of "Independent Fidelity (Funds)
> Investors.  Over 50,000 Members".

There are two Fidelity-specific newsletters:  Fidelity Monitor and Fidelity
Insight (Insight is published by MFIA).  Both are independent newsletters,
and offer advice in the form of buy/sell recommendations, and model
portfolios.  Monitor costs about $96 per year, and Insight's first year
costs $99, but after that, about $130 per year.

How do you know their advice is any good?  Well, Hulbert Financial Digest
is a newsletter which rates the performance of newsletter model portfolios
(among other things) and gives fairly good marks to both Insight and
Monitor.  Monitor has the better long-term track record, according to
Hulbert.  So far this year, I think Insight has had better performance.

Both Monitor and Insight offer growth and income model portfolios.
The Monitor portfolios hold just a couple of funds each.  The Insight
portfolios hold about four each.  Monitor also has a special portfolio
which holds a single Fidelity Select fund, and then switches it
periodically according to some arcane market timing scheme.  From time
to time, such as 1991, the Select model portfolio has done no better
than the growth model portfolios.  Monitor says that the target is
a 30% return, but I don't know if they've ever reached that.

Both Insight and Monitor offer a telephone hotline, where you can call
weekly to find out if they've made changes to their model portfolios.
The switches are timed so that you can call Fidelity before Monday A.M.
and still get the same price as they do.

> Does anyone have an opinion of this group?  Is it worth the
> 1-year membership fee of $99?

Here's how I feel about their advice...if you have enough assets, and
if you think their advice is better than advice you receive from other
sources (or your own choices), then the benefit can be far greater than
the cost of $100 to $130 a year.  Likewise, if you only have a couple
thousand in a single fund, and you subscribe to both, their advice
may not be worth the $230 per year that you shell out.

Here's a simple way of taking care of your investment.  Open an account
at Fidelity and drop a few thousand in.  Buy one of the newsletters and
follow their monthly recommendations, and call the hotline weekly to
get up-to-the-minute recommendations.  Simple.  Some people, however,
prefer a more active role in choosing.  Just following the sample
recommendations, I think, is pretty boring.

I've subscribed to both, mostly to see firsthand how both of these
newsletters operate.  Hulbert gives the edge to Monitor, but I sort
of like the documentation from Insight better.  Their articles are
pretty interesting.  MFIA (who publishes Insight) also sells lots of
extra stuff, such as an annual that describes all Fidelity funds
and video tapes and such.  They are definitely the "slicker" outfit.

One side note:  I learned something from Insight that I hadn't seen
from any other source, including Fidelity itself...how Fidelity
handles switching from fund to fund, when the funds might be load
and no load funds.  Fidelity apparantly has a "bucket" system that
can assure that you only pay a load once...but if you don't do your
transfers correctly, you could possibly end up paying a load twice.

If you plan on buying funds other than Fidelity's, then there are
probably better choices for newsletters, since both of these are
Fidelity-specific.

My advice for anyone looking for a newsletter:  check newsletters at
your local library first, and also see if you can find the Hulbert
Financial Digest (for example, the Boston Public Library doesn't carry
Hulbert, but the Chicago Library does).  Hulbert gives performance
ratings of newletters...bunches of them.  One caveat:  just because
Hulbert likes a newsletter, and rates it really highly, it might not
fit your investment objectives.  So, lots of newsletters offer sample
issues and trial subscriptions.  Check them out first hand.

Guy
-- 
Guy Klose
milo@mvuxi.att.com
Newsgroups: misc.invest