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Strong Sectors, What To Expect…

In the past three months the S&P 500 has climbed from 750 to almost 950, a 26% increase.   At the same time the Mid-Cap Index, S&P 400 is up 32%, the Small-Caps are up 35% and Internationals are up almost 38%.

Comparison Graph*

Two Things To Expect

Market Analysts are telling us to look for two things this year.  A drop that will bring on a great buying opportunity, then a renewed climb back up to around 1000 for the S&P 500.

Market Correction Coming This Summer: Wilson*

By Jee Yeon Park  Friday, 12 Jun 2009

Market momentum is slowing but it’s clearly still upward, said John Wilson, chief technical strategist at Morgan Keegan.

“We’ll get a correction somewhere but it won’t happen when everyone is looking for it,” Wilson told CNBC. “I think there are a lot of institutional investors who are sitting on too much cash right now.”

He expects the correction to happen in the summer, but markets won’t test the March lows.  The markets are “forecasting the end of the recession.”

Wilson said it's likely that the markets will reach 1,000 on the S&P.

Second Opinion:

S&P Pullback, then 1,000 at Year End: Doll*

By CNBC.com*  Thursday, 11 Jun 2009

The S&P 500 index could drop about 10 percent from current levels, but will still finish out 2009 around 1,000, Bob Doll, vice chairman and global chief investment officer of equities at BlackRock, told CNBC Thursday.

"We had a 1,000 target since the beginning of the year for the S&P we're sticking with that," Doll said. "It looked kind of foolish in March, may look pessimistic today with the number in the low nines (900s), but I think we'll see 1,000. But we may see something in the low 800s first.

The U.S. economy will experience a noticeable recovery, but it will be “unfortunately subpar,” Doll said. 

As for talk of higher interest rates, the speculation has probably more to do with the normalization of our circumstances than inflation fears.

Also Read: Market Has Room for 10% More Upside: Art Hogan*

Wishing You The Very Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

Quarterly Sneak Peek…

This Quarter has been so good we’ve just got to show you a quick preview of the upcoming End Of Quarter returns.

This was the 10^th week of the 2^nd Quarter and the fund returns are now ranging anywhere from 3% to 46%.  Your funds probably fall somewhere in between, most likely more toward the top if you’ve been keeping up.

As with a NASCAR or a Horse Race, the leaders often change.  The chart below shows that it pays good money to go with the winners and leave the laggers.

Loyalty is essential for success in personal relationships, but not necessarily for successful investing in our current, changing marketplace.

**Formerly Janus International

The Member’s Weekly Stock Fund Chart has an additional QTD column added this week showing all Delta 401k stock funds.

Members may view it here:  Weekly Stock Chart PDF

Wishing You The Very Best Of Returns,

The Fed’s Funds Staff

Indications Good, Markets Responding

+ Reconsidering Portfolio Strategy…

The article directly below is from Fidelity’s Research and Analysis Division.  Written by analysts, it tends to be a bit technical.  For Clarity and Simplicity we have bolded some of the more important aspects.

Road to Recovery: Signals to Watch

Pleasant surprises from some key indicators

May 29, 2009 Fidelity.com Market Analysis, Research & Education

The most significant trend so far in the spring of 2009 is that the pace of decline has moderated for a handful of leading indicators that were severely negative in late 2008 and early 2009.

In some cases, these indicators point to stabilization, in other cases they simply show that the rapid deterioration in the economy has moderated. Taken together, however, they have provided hope that the worst part of the economic recession may be in the past, and that the economy may stabilize earlier than expected.

An example of a leading indicator that has improved is initial unemployment claims.  The number of people filing for initial unemployment insurance claims is a good proxy for layoffs, and new claims tend to be a leading economic indicator for the direction of the labor markets (as well as the unemployment rate itself, which is a lagging indicator).

Historically, a slowing pace of layoffs has generally preceded a bottoming in the overall economy. During the past month or so, while high unemployment claims demonstrated that workers continue to lose jobs, the number of initial jobless claims has trended down.

In March 2009 manufacturer’s new orders for non-defense capital goods—a proxy for overall business investment activity—nudged up for the second month in a row after hitting its lowest level since 1993 earlier in January.

Consumer expectations, a leading indicator of consumer activity, rebounded sharply in April compared to the past several months (though it remained at a low level on a historical basis).

Investment implications

The early stages of an economic recovery are usually marked by violent fits and starts. A close examination of leading economic indicators shows that while some remain negative, others have either improved or their rate of deterioration has slowed. While these incipient signs of stabilization helped fuel the recent stock market rally, investors will be looking for sustained improvement in these indicators to confirm a bottoming of the economy.

…historical analysis of leading indicators shows that owning stocks in the early stage of an economic upturn often has led to favorable results.

What’s more, investors should be wary of waiting for all indicators to turn positive because this “all systems go” signal has usually occurred at or beyond the end of recessions, and after a considerable percentage of a bull market’s gains have been recorded.

Read It All: Road to Recovery: Signals to Watch*

Also Read: Recovery hopes lift global stocks*

Reconsidering Your Portfolio Strategy?

The last Bear Market (Tech Bubble) exposed the vulnerability of the “Buy and Hold” Strategy.  This current Credit Crisis, Bear Market is showing the weakness of the “Diversification” Strategy.

Is Diversification A Strategy Of The Past?*

Wishing You The Very Best Of Returns,

The Fed’s Funds Staff 

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

Don’t Worry??

Inflation, Recession, Weak Dollar, it seems like something is bound to torpedo our economic recovery and sink our stock markets again.

The “experts” are once again all over the map, this time the doom and gloom people have 2008 as their motivation to beat the drums even harder.  Who do we believe?

Looking back over 2008 we see that the S&P 500 experienced single-digit quarterly losses for the first three quarters.  But the fourth quarter saw a 22% drop that hit every invested 401k deep and hard.

But there was one “expert” at the beginning of the 4^th Quarter who made a loud and clear call warning Investors to run for cover.

He was right, things were severely out of control.  After the 22% loss came another 11% loss in the 1st Quarter of 2009.

Those who heeded Jim Cramer’s October 8^th call saved themselves from the two most severe Quarters of this recent Bear Market.

Today Show Interview October 8^th 2008:*

"Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now."

- Jim Cramer

So What’s He Saying Now?

In the 2 minute video link below Cramer addresses Inflation fears, deflation, recession, gold, oil, copper and the weakening dollar. 

This quick video, made on Friday, tells us in layman’s terms that inflation is not going to be an overall problem in the near future.  Deflation in this recessionary environment is actually the larger concern.

As far as he’s concerned, Fed Chairman Bernanke is doing a brilliant job keeping the dollar weak to ignite American Manufacturing.

In closing Cramer advises not to spend time worrying about what may be on the back burner because those who focus on that often miss what’s most important, namely the 2000 point run up in the Dow in the last three months.

See The Video: Cramer - Forget Inflation*

Wishing You The Very Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Considering China…

Fidelity’s China fund is appropriately named The Fidelity China Region Fund.  It is actually made up of stocks from markets in Mainland China, Hong Kong and Taiwan.

Those who keep up with world history and current events know that for decades Mainland China and Taiwan have been at odds and not too long ago there was growing hostility between the two.

But recently improving relations have brought about a resurgence of market improving prospects as the following article points out:

Beijing-Taipei thaw creating investment opportunities

By Chris Oliver, MarketWatch.com* 05-15-2009

HONG KONG -- Rapidly improving ties between China and Taiwan bode well for Taipei-listed shares and other assets, analysts say.

Specifically, certain companies in the airline, technology, and banking sectors may be best positioned to benefit from the developing détente across the 110-mile Taiwan Strait.

Recently, bullish broker reports have highlighted cross-strait investment themes after what were heralded as "breakthrough" agreements between the two governments last month.

The latest agreements solidify what some are calling a new dawn after 60 years of bitter division between the Communist-ruled mainland and Taiwan.

Daniel Rosen, a principal with New York-based advisory Rhodium Group, said the normalization of relations means dissipating political risk and a lower chance of military conflict, which in turn is leading to the elimination of a discount investors have traditionally applied to Taiwan.

The benchmark Taiex was up 2% mid-way into Friday's session. The index has risen about 22% since April 1, and is up about 52% since February.

In an effort to encourage Taiwan's more open attitude to Chinese capital, analysts think Beijing will offer more carrots in the months ahead. These include greater access to China's vast markets, tariffs cuts that place Taiwan on par with the preferential rates extended to South East Asian nations, and better protection for Taiwanese intellectual assets.

Read More: Beijing-Taipei thaw creating opportunities*

It is interesting to note that two largest holdings of Fidelity’s China Region, Taiwan Semiconductor and China Mobile are mentioned in the full text of the above article.

Fidelity China Region Fund

YTD Return = 24.1%

Best 1-Year Return = 84.9% (1999)

Worst 1-Year Return = -44.9% (2008)

See China Region’s Stats At Fidelity.com*

Check Out Its Funds Holdings At Morningstar.com*

Wishing You The Very Best Of Returns,

The Fed’s Funds Staff 

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

YTD Looking Good…

For those who have stayed invested throughout 2009, your returns are beating those who stayed in the Insurance Contract and Money Market Fund Bomb Shelters.

The chart below is a random sample of YTD Returns** from each category.  Fidelity Latin America leads this sampling with a YTD return of +33%:

NB Genesis                  NBGIX       5.0

Wells Fargo Small Z     SSMVX    14.4

Ariel Fund                    ARGFX     20.4

Oakmark Select           OAKLX     17.7

Fidelity Low Priced       FLPSX      10.8

Janus Enterprise          JAENX      14.0

Fidelity Equity Inc         FEQIX        7.6   

Fidelity Contra               FCNTX      4.0 

Fidelity OTC                  FOCPX    21.7   

Janus 20                       JAVLX    16.8

Janus Balanced             JABAX     6.6

Oakmark Eq & Inc         OAKBX     4.0

Fidelity World Wide        FWWFX    4.7     

Fidelity Canada              FCIDX     16.8

Fidelity China                 FHKCX    26.7

Fidelity Latin Amer         FLATX    33.2

Templeton Dev Mkts      TEDMX     22.1

** YTD as of 05-09-09.

Evidence piling up that worst of recession is over

By JEANNINE AVERSA, AP Economics Writer – Fri May 8, 2009

WASHINGTON – Evidence is piling up that the worst part of the recession has ended. But that doesn't mean the pain is over.

The economy remains vulnerable to further shocks, and 13.7 million people are unemployed. The jobless rate rose to 8.9 percent in the new report and still seems headed for a stinging 10 percent.

Yet confidence is building that the recession, the longest since the Great Depression, will end this summer or fall, setting the stage for a slow recovery.

By some measures, the darkest months have passed. The plunges in economic activity and rising waves of layoffs, seen from the end of 2008 through the start of this year, seem to have subsided.

"The winds are still howling, but I think we can see the sunlight on the distant horizon," said Mark Zandi, chief economist at Moody's Economy.com. "Clearly, the job losses are moderating.”

Read More: Evidence is Piling Up…*

Intelligent Investing

Three Down Days, Then Stay Away!

By: Bill Singer, 05.08.09 – Forbes.com

Since March 9, the markets have not had three down days in a row. Until this changes, I'm bullish!

Read More: Three Down Days…*   See: The Down Days Chart*

Wishing You The Very Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

Getting Back To Breakeven…

Many Dire Predictions Have Been Made claiming that it will now take impossible amounts of time for American Worker Retirement Accounts to claw there way back to breakeven.

We’d like to take issue with these Bell Ringers of Doom, Gloom and Despair.

Just to keep things in a reasonable perspective, let’s look at the Tech Bubble burst of 2000 coupled with the 9/11/2001 Attack on The World Trade Center (Which was virtually an attack on Wall Street itself.)

This Bear Market lasted for about three years then it took the Large-Cap S&P 500 about four more years to recover to the breakeven point.  Three years down, followed by four back up for a total of seven years.*

Now let’s look at the positive factors that are working for us to shorten our recovery time:

• Some market sectors explode back to life after a downturn so alert investors recover sooner.
• Many stocks and bonds continue to pay dividends though both the ups and downs.  Since these are posted to you account much like a bonus.  
• Inflation often cools rather than compounds during times of recession.

Those who are strongly invested in the healthiest sectors will likely have a much quicker bounce back time.

The graph link above will also show you that the Mid and Small Indexes recovered their losses in about a year.  If Large-Cap Investors had changed from Large to Mid at the low point they would’ve recovered their losses more than a year sooner than if they simply stayed in the slower sector.

Compare The Progress Of Your Funds

Using the following short-term graph you can actually see which sectors are recovering best from this recent downturn and also graph your own funds vs. each sector.

6-Month Index Graph*

To Compare Your Funds Using This Graph:  Click Compare, select the Enter Name box and enter the ticker of your fund then click the Draw Button at the bottom.

Read More in this article from Yahoo Finance*

Wishing You The Very Best Of Returns,

The Fed’s Funds Staff 

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

The Minority Opinion…

Optimists are becoming a little easier to find these days but overall they’re still in the minority.

But what they have to say is refreshing to hear, tempting us to consider the possibilities of a more complete Market recovery.

The Downturn: Is the Worst Over?

It hasn't shown up in the government statistics yet, but we may be seeing the first signs of an economic rebound in the U.S.

By Harold L. Sirkin BusinessWeek.com* April 21, 2009

Over the past few weeks, I've met with more than a half-dozen U.S. CEOs whose companies represent a wide range of industries. They all told me that while their January and February performance was predictably horrible, they had significantly exceeded their internal forecasts in March. Their first-quarter 2009 revenue projections already had been adjusted downward from first-quarter 2008 numbers, so they were all surprised—and almost afraid to believe—that they were beating both their internal projections and their previous six months' performance.

One company that makes luxury products, which had experienced an extraordinary 98% decline (yes, almost total) in sales, has now seen a rebound to about 30% of its early 2008 peak. Others are seeing unexpected sales increases of 10% to 20%.

None of them are ready to celebrate, but they are seeing what may be the first signs of hope.

Economist Polina Vlasenko of the American Institute for Economic Research reported on Apr. 10 that during the current recession, companies have been cutting their inventories faster than in past recessions. "And they started doing so sooner after the peak of the business cycle," Vlasenko noted. Quite possibly, Vlasenko suggests, the rapid inventory reductions were made possible by "the just-in-time economy," with improved supply management enabling firms to carry lower inventories; when there are lower inventories during expansionary times, reducing inventories rapidly during slowdowns becomes easier.

What we now may be seeing is the reverse. When the same managers see demand increase by 10% while inventory levels are falling rapidly, they increase production by 20% to make up for the decline.

Confidence From The Stimulus

While some like to argue that the stimulus has made a difference, these funds are just now starting to filter into the economy, so the stimulus money couldn't be the answer. However, faith in the stimulus package's potential could be.

The Bottom Didn’t Drop Out

When consumers and business executives realized that we were not heading for the end of capitalism and not everyone would lose their job, they stopped hunkering down. Companies began spending again. Likewise, many consumers had deferred purchases for six to nine months. But everything can't be deferred forever.*

Banks Are Lending Again

It turns out that everyone is not a deadbeat. There are lots of viable businesses, especially after they cut 20% out of their cost structure. As bankers get used to this new environment, they may be more confident in their ability to separate good risks from bad. They also may be realizing that the spread between the rate they pay for funds (which is now very low) and the rate they charge borrowers is larger than it has been. There is a lot of money to be made on good risks.

Preparing To Win

Many companies have been getting into fighting shape during the recession—cutting excess costs, restructuring manufacturing facilities, etc.—and are now starting to make their moves: buying "wounded" assets on the cheap, capturing customers from hurting or bankrupt competitors, and attracting world-class talent from those who can no longer afford to pay the market rate.

Unfortunately, the reports I hear from Europe are not the same. Just further declines, with no signs of an upswing. Europe, which entered the recession after the U.S., may still be working on the downside. Hopefully, this will change soon.

Many things can still go wrong. We are not out of the woods. But perhaps we have reached bottom and are heading up again. Perhaps the U.S., with our economy on the rebound, will lift the rest of the world from recession. And perhaps we will see confirmation of this before 2009 ends.

Read It All: The Downturn: Is the Worst Over?*

Harold L. Sirkin is a Chicago-based senior partner of The Boston Consulting Group and coauthor, of GLOBALITY: Competing with Everyone from Everywhere for Everything (Business Plus, June, 2008)

Wishing You The Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

Too Good To Last Much Longer??

We’ve Been Enjoying Six Straight Weeks of Positive Returns!  Oh, What A Feeling!!

Large-Caps are up over 27%, Mids are up almost 35% and Small-Caps are well over 36%.  How long can this party last??

Of course no one can predict how long this run will last but the important point here is to realize that we have had this tremendous run-up. 

So this may not be the best time to jump back into the Market with both feet if you’ve been sitting on the sidelines.  We are coming due for at least a week or two of negative returns.

At the same time we need to realize that the Market has turned a corner, recovering some of its health. There’s now a better potential for our 401k returns to trend more positively over the long run.

Stability With Fair Return

Many Investors have suffered more than their fair share of losses lately so all they’re looking for are honest returns from Fund Managers they can trust to invest wisely.

The Fed’s Funds Auto Pilot Ratings have been recently updated, showing just the funds that have a proven record for stability and wise management.

For the convenience of our Members we have added Auto Pilot designations on our Weekly, Quarterly and Annual Return sheets showing those funds that have a perfect Auto Pilot record for the past five years.

There just are eight funds that have achieved perfect ratings out of 26 Auto Pilot Rated funds in all.

Wishing You The Very Best Of Returns,

The Fed’s Funds Staff

International Update...

“As the U.S. goes, so goes the world”, is an appropriate way to summarize our featured article.  

The United States is the single largest engine of the world’s economy accounting for 1/5 of it.  Also being the largest importer means many international companies rely on the health of the US market to turn a profit.

Included below are excerpts from a MarketWatch.com article featuring important incites concerning the prospects for different regions and countries.  Investors with significant international holdings would most likely benefit from reading the entire article*.

International Managers Pin Hopes On U.S.

Without recovery in world's biggest economy, globe will struggle

By Sam Mamudi, MarketWatch  April 3, 2009

"You're not going to get diversification and outperformance from international markets if the U.S. continues its sharp downturn," said Andrew Foster, acting chief investment officer at Matthews International Capital Management. "But stability in the U.S. will let the other markets stabilize and even perform [well].”

The Eurozone, said Virginie Maisonneuve, head of global and international equities at Schroder Investment Management, is too fragmented to develop a coherent response to the current crisis, while the U.K. is too small. As a result, eyes are on the U.S. to lead the recovery.

"The perception is that the U.S. is going to come out of the recession first," said David Boyle, pan-European equities investment manager at Aberdeen Asset Management.

Bright Spots

Despite the relative gloom, there are bright spots: Latin American funds finished the quarter flat and led all international stock funds.

Some of this performance was due to rising commodities prices, which have helped Brazil in particular. Brazil typically amounts to 50% to 60% of a Latin American fund's holdings, said William Rocco, analyst at investment researcher Morningstar Inc.

Emerging-market funds finished the quarter down 1.8%. Rocco said that as with Latin America funds, the category's return masks a variety of country results and reasons for the performance -- while Brazil and Russia benefited from rising commodities prices, the economies of other well-performing countries, such as Taiwan and Israel, are not powered by natural resources.

But despite the uncertainties, some managers still believe that once the world recovers emerging markets will resume their hot streak. "If we do get to stability, emerging-markets countries are set for a pretty hard lift-off," added Caldwell.

"The Chinese government has handled itself quite responsibly," said Foster. "Its projects make sense and promote growth and they're within the government's funding ability.

China region funds were also flat in the first quarter, according to Lipper.

The Stragglers

Look through the performance numbers and two regions stand out for their poor performance in the first quarter: Europe and Japan.

Maisonneuve thinks that in Europe there are political dangers, including rising unemployment and a leadership vacuum at the top of the Eurozone countries. She believes these dangers will lead to volatility, and contributed to the region's underperformance in the first quarter -- on average, funds were down 13.3%.

The worst laggard among international stock funds was Japan funds, down 18.2% in the first quarter.

We're seeing the vulnerability of the Japanese economy to the global slowdown," Foster said.

Foster added that he's worried about countries in Southeast Asia -- he said that both Thailand and Malaysia are more unstable than he's ever seen. The social and political instability in these countries is "the least watched issue in Asia," he said. Pacific region funds that avoid Japan were down 1.2% in the quarter.

Back in the U.S.

Maisonneuve said that while she's underweight in U.S. equities, she's been increasing her U.S. holdings recently. She added that she's been hearing more from clients interested in the U.S. "A lot of people are intrigued, the U.S is seen as the key to the puzzle -- there's a faith that if one country can figure things out, it's the one that's the most flexible and pragmatic."

Read It All: International managers pin hopes on U.S.*

Wishing You The Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

Index Investing Gets Hammered…

2008 was generally better to Index Fund Investors than it was to those in managed mutual funds.  While in 2007 the Fund Managers beat their Indexes handily.

Here we are at the end of the First Quarter of 2009 and the Fund Managers are winning again, hands down.

It would be quite a job to name all the Domestic Delta 401k funds that beat their index so to save time and space we’ll name the few that didn’t make the grade.  Then we’ll point out the handful of funds that actually turned in positive results for the first quarter.

Lost To The Index

Small Caps: FMA Small Company

Mid-Caps: Alliance Bernstein Small/Mid Value, Fidelity Value, Lord Abbett Mid-Cap Value, Mutual Shares, Virtus Mid-Cap Value, Ariel Appreciation, Ariel Fund and Baron Asset Fund

Large-Caps: DWS Dreman High Return Equity, Fidelity Equity-Income, Fidelity Equity-Income II, Lord Abbett Affiliated, Morgan Stanley Large Relative Value, USAA Income Stock, Van Kampen Growth & Income, Fidelity Growth and Income and Fidelity Growth and Income II

Balanced Funds: Black Rock Balanced Capital, Fidelity Global Balanced and Van Kampen Equity and Income

The other 103 Domestic Funds all turned in Index Beating Performance!

A Positive Quarter!

We have now had six consecutive negative quarters so it’s very encouraging to see some of our funds moving back into the black!

Mid-Caps: Alger Mid-Cap Growth, Artisan Mid Cap

Large-Caps: Fidelity OTC, Janus Twenty, Legg Mason Partners Large Growth, Morgan Stanley Large Growth, TCW Galileo Select Equities and Touchstone Sands Capital Select

Members can view their fund’s Quarterly Performance: Quarterly

Compare your Fund’s Performance to its Index: Meeting & Exceeding

Wishing You The Best Of Returns,

The Fed’s Funds Staff

A Break In The Weather…

Like Weather Conditions Across The Nation, Market Conditions Are Always Changing, bringing sunshine to some sectors and rain to others.

It’s our job as Investors to keep most of our money where the sun is shining and less where flood waters are devastating the investing terrain. 

Keeping mindful that the rains will subside, and eventually produce growth in those devastated areas when the sunny days return.

Fun In The Sun

For the past three weeks the sun has shown broadly across the market giving us our first three week back-to-back positive stretch since April of 2008.

This ray of hope came mostly from optimism about the Financial Sector so bank stocks along with the funds that hold them have soared.

Health Sector stocks have also taken off largely because of anticipated Gov’t Health Care Programs.

Many Tech Stocks have soared as well because of the trillions of dollars being added to our money supply.  As more dollars are added the dollar likewise drops in value internationally. 

This benefits those U.S. Tech Companies that export, making their products cheaper overseas.  So the sun is shining for them as well.

More about Tech Stocks: Tech Stocks: Mad Money*

Sector Heavy Funds

Here are some of the Funds that are making heavy bets on these warming sectors:***

Alliance Bernstein Small/Mid-Cap Value*      24% Financials

Fidelity Equity-Income* Large-Cap Value      20% Financials

Morgan Stanley Value*  Large-Cap Value       23% Financials

Lord Abbett Affiliated*  Large-Cap Value      39% Financials

Fidelity OTC*  Large-Cap Growth    28% Tech**/23% Health

LeggMason Partners Large Growth* 27% Tech**/27% Health

** Hardware+Software

*** Holdings are approximate

Here’s A Year-To-Date Graph Comparing Their Performance:*

AllianceBernstein Equity-Income MSValue LordAbbett OTC LeggMason

Wishing You The Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

The Right Medicine??

The Market will vote this week…

It’s been a year since the banking/mortgage crisis began to turn ugly.  In March 2008 the Fed gave Bear Stearns Securities an emergency loan to keep them afloat.  Soon the 350 billion dollar company was sold for just over one billion dollars.  Ouch.

The Government has since shoveled good money after bad trying to stabilize and prop up faltering financial institutions.  Very little was aimed directly at fixing the economy consequently the Market showed its disappointment by dropping 40% in the last year.

But lately the Market has given a thumbs-up on the Fed’s plan to pump 1.2 Trillion into the economy purchasing Gov’t Bonds and Mortgage backed Securities. 

The aim here is to dramatically lower mortgage rates, coaxing reluctant home-buyers and home-lenders to make the deals of a lifetime.

Fed launches bold $1.2T effort to revive economy*

More Meds Coming

More Meds are on the way this week as the Treasury Department lays out a plane to “cleanse” bad risk loans from the balance sheets of struggling banks.  The idea is to repackage them into sellable blocks then market them to Investors willing to share the risk.

This long overdue medicine should be well received by all accounts.  But the Market will have its say on the plan when it’s rolled out this coming week.

Geithner Puts Finishing Touches on Plan to Revive Banks*

Form An Opinion Then Double Check

As it’s been working out, the Market has first expressed its opinion of these plans up or down, then over time it evaluates the actual performance of the plan, making necessary corrections up or down.

Concerned Investors should do the same thing.  First expressing their opinion of a fund by purchasing or selling it.  Then over time evaluate the actual performance making the necessary corrections.

Proceeding only on our first opinion then failing to evaluate and make corrections puts our 401k portfolio and retirement life-style at risk over and over again.

Evaluating Sector Strength

The chart below** shows 13-week (down-market) strength along side the short-term (up-market) strength of the major U.S. market sectors.  The top 3 performers in each time period are highlighted.

 **Data from Morningstar.com Index Page*

Wishing You The Best Of Returns,

The Fed’s Funds Staff

Upturn or Rerun??

WOW!!  What A Great Week For The Market!  The S&P 500 turned in a +10.7% performance while the Small and Mid-Caps were even higher.

Could this be the beginning of the much hoped for Turnaround, or a Rally in the middle of a long Bear Market, or just a Market Bounce before the next big slide??

There Is A Pattern

Well, we’ve actually seen this before.  Although not in double digit positives, we have seen two other solid positive weeks this year for the S&P 500.  Unfortunately they were followed by four solid negative weeks.

 S&P 500 YTD - Week By Week

What Does A Healthy Market Look Like??

It’s Been A Long, Long Time Since We’ve Seen Healthy Market Performance!  The last glimpse we had was in April of 2008 when we saw positive weeks combining to overwhelm the negative weeks:

 S&P 500 - 2008

So when we see positive returns over time outdoing the negative, we can begin to have confidence in the Market again.

Up Is Overdue

It is interesting to note that the S&P 500 has been through Six Consecutive Losing Quarters (including the present quarter). 

We honestly feel that the Market can only hold its head underwater for so long without coming up for air.  From this vantage point the coming 2^nd Quarter has a very good chance of being the first positive quarter since the 3^rd quarter of 2007.

U.S. Stocks Post Steepest Gain Since November as Banks Rebound

By Lynn Thomasson  March 14, 2009

Bloomberg.com*

U.S. stocks ended a four-week losing streak with the steepest rally since November after the nation’s three largest banks said they’ve become profitable and General Electric Co. said losing the top credit rating at Standard & Poor’s won’t hurt business.

“It’s been a terrific week,” said Fritz Meyer, the Denver- based senior market strategist for Invesco Aim, which oversees $357 billion. “It would make sense for the market to bottom here and start to rebound as the economic recovery unfolds.”

The S&P 500* rallied 11 percent to 756.55, recovering from the 12-year low of 676.53 reached on March 9^th.

The S&P 500 has risen in only two of 10 weeks this year as falling shares of banks raised concern the government would be forced to nationalize some lenders. The U.S. stock benchmark has declined 16 percent in 2009.

The S&P 500’s last rally was a 24 percent rise between Nov. 20 and Jan. 6 on optimism President Barack Obama’s economic stimulus package would end the recession. The index then tumbled 28 percent through March 9 as the economic slump intensified and companies from GE to JPMorgan cut dividends.

“This is a bear market rally,” David Darst, chief investment strategist at Morgan Stanley Global Wealth Management in New York, said in a Bloomberg Television interview. “Fundamentals are rough right now.”

“The gains in U.S. stocks occurred even as confidence among American consumers held close to a 28-year low, reflecting mounting job losses amid a deepening recession. The Reuters/University of Michigan preliminary index of consumer sentiment climbed to a higher-than-estimated 56.6 from 56.3 in February. The gauge reached a 28-year low of 55.3 in November.”

“The market was ready to have any whiff of good news,” said Scott Jacobson, chief investment strategist at volatility trading firm Capstone Sales Advisors in New York. “I don’t think we’re ready to rally for weeks at a time right now.”

Read The Article:

U.S. Stocks Post Steepest Gain Since November*

Wishing You The Best Of Returns,

The Fed’s Funds Staff

Helping You To

Make Good Moves!

FedsFunds.com

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

In or Out??

The “Experts” are all over the map these days.  Some say, “we are near the bottom and it’s a great time to buy in.”  Others say, “Oh no, the Market is headed even farther down keep your money safe.”

If the truth was told, everyone is just guessing and no one really knows for sure.  Your guess and mine have just as much chance of being right as the “Experts” these days.

Money In

For those who want to keep some of their money in the Market we’ve found a couple of articles that recommend four of the Delta 401k Funds.

The first article is titled 16 Growth Funds For Recovery* and they highlight the Janus Fund and Fidelity Contra Fund.

The second article is titled 12 Flexible Funds For Navigating This Market* and they point out Fidelity OTC and Fidelity Focused Stock Fund.

Those who want to reduce the downside risk of their invested money even more may want to look at the Janus Balanced Fund.

Here’s a YTD Graph for the above funds showing performance in both the up and down directions for 2009 so far: Janus, Contra, OTC, Focused & Janus Balanced*

Money Out

Back in September of 2008 we pointed out to our Readers that the safest place to find “Shelter In This Storm” was the Delta Credit Union Fund found in our 401k.

Money in this fund was then insured for up to $100,000 by the NCUA.  This insurance has been expanded to $250,000 whether you are a Credit Union Member or not!

The current returns of this fund are about +2.4% annually.  To see more details of this fund, Log-In to your 401k Account, select Investment Choices and Research in the left column then scroll to the bottom of the listing.  Click on DCCU to view fund details.

Wishing You The Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

International Alert!!

As International Investors, many of us find ourselves investing in countries that we don’t really keep track of.  Is this really a good place to expect growth and consistent returns for the future?  Where are the landmines in this investing environment and how do I avoid them?

The article below gives us a “Heads-Up” on Investing in Europe.  Do you know how many European Companies are part of your portfolio?  We’ll show you how to find out at the end of this Update.

Europe's Crisis: Much Bigger Than Subprime, Worse Than U.S.

By Henry Blodget  Feb 27, 2009

From Yahoo Finance, Tech-Ticker*

John Mauldin, president of Millennium Wave Advisors, was among the few analysts whose forecasts for 2008 proved accurate.

This is why some folks think the dollar is going to remain strong over the coming months: Because the rest of the world is falling apart even faster than we are.

As John Mauldin explains, fixing the problem in Europe will be even more difficult than it is here:

The problem is that in Europe there are many banks that are simply too big to save. The size of the banks in terms of the GDP of the country in which they are domiciled is all out of proportion. For my American readers, it would be as if the bank bailout package were in excess of $14 trillion (give or take a few trillion). In essence, there are small countries which have very large banks (relatively speaking) that have gone outside their own borders to make loans and have done so at levels of leverage which are far in excess of the most leveraged US banks. The ability of the "host" countries to nationalize their banks is simply not there. They are going to have to have help from larger countries. But as we will see below, that help is problematical.

This has the potential to be a real crisis, far worse than in the US. Without concerted action on the part of the ECB and the European countries that are relatively strong, much of Europe could fall further into what would feel like a depression. There is a problem, though. Imagine being a politician in Germany, for instance. Your GDP is down by 8% last quarter. Unemployment is rising. Budgets are under pressure, as tax collections are down. And you are going to be asked to vote in favor of bailing out (pick a small country)? What will the voters who put you into office think?

We are going to find out this year whether the European Union is like the Three Musketeers. Are they "all for one and one for all?" or is it every country for itself?

Read It All: Europe’s Crisis: Much Worse Than U.S.*

Check your International Fund’s Top 25 Holdings and their Country of Origin.

Click the link below then Copy & Paste your Fund Ticker in the “Quotes” Box at the top of the page:

Morningstar.com, Top 25 Holdings:  FWWFX*

INTERNATIONAL-WORLD STOCK FUNDS             

Dreyfus Founders Worldwide Growth F                             FWWRX

DWS Global Opportunity                                                  SGSCX

Fidelity Worldwide                                                             FWWFX

Hartford International Capital Appreciation Y                      HNCYX

Morgan Stanley Inst. Global Value Eqty                             MSGEX

Mutual Discovery                                                               MDISX

Neuberger Berman International Trust                                 NBITX

Templeton Growth A                                                          TGADX

Templeton World A                                                           TEMWX

INTERNATIONAL-FOREIGN STOCK FUNDS           

Artisan International                                                       ARTIX

Calvert World Values-International. Equity                     CWVIX

Fidelity Aggressive International                                      FIVFX

Fidelity Diversified International                                       FDIVX

Fidelity International Discovery                                        FIGRX

Fidelity Overseas                                                            FOSFX

Janus Aspen International Growth I                                  JIGRX

Morgan Stanley Inst. Active International                          MSACX

Morgan Stanley Inst. International Equity                          MSIQX

Templeton Foreign A                                                       TFFAX

Templeton Foreign Smaller Companies A                          FTFAX

Templeton Foreign Equity Series                                     TFEQX

USAA International                                                          USIFX

INTERNATIONAL-REGIONAL FUNDS       

Fidelity Canada                                                                 FICDX

Fidelity China Region                                                        FHKCX

Fidelity Europe                                                                  FIEUX

Fidelity Europe Capital Appreciation                                  FECAX

Fidelity Japan                                                                    FJPNX

Fidelity Japan Smaller Companies                                      FJSCX

Fidelity Latin America                                                        FLATX

Fidelity Nordic                                                                   FNORX

Fidelity Pacific Basin                                                         FPBFX

Fidelity Southeast Asia                                                      FSEAX

INTERNATIONAL EMERGING MARKETS 

Fidelity  Emerging  Markets                                               FEMKX

Morgan Stanley Emerging Markets                                    MGEMX

Templeton Developing Markets                                          TDADX

USAA Emerging Markets                                                  USEMX

Wishing You The Best Of Returns,

The Fed’s Funds Staff

High-5, Beating The Index…

On November 20^th 2008 the Market hit bottom and the S&P 500 closed at 752.44.  Now exactly three months later it has gained only 2.3%.

But in those same three months many of our Delta 401k Funds have made strong double digit gains proving that many of our Fund Managers are earning their keep!

Example: S&P 500 vs. Fidelity OTC*

The chart below shows the Top Five in each Category from Fed’s Funds High-5, Small, Mid, Large, Balanced and International:

On good days and down days the Top High-5 Funds are beating the Market, hands down!

Below we’ve included a chart from Fed’s Funds Bonds showing the Top 15 Bond Funds YTD and for the Past Three Months:

Most of these funds are above water for the YTD as well as the past 3 months.

Wishing You The Best Of Returns,

The Fed’s Funds Staff 

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

Start Your Engine!!

Delta and Fidelity are now offering us some much needed 401k support through a company called Financial Engines ®.

Financial Engines provides personalized, on-line 401k advice (for free) as well as portfolio management (for a fee); they’ve been doing this for about 10 years.

If you engage them to manage your portfolio, the fees will be deducted from your 401k account balance.  The fees are as follows:

0.45% per year for the first $100,000 in your account;

0.35% per year for the next $150,000 in your account;

0.20% per year for the amount above $250,000.

Doing the math, this is what would be deducted from your 401k annually:

                    $50,000 = $225    $100,000 = $450

                   $150,000 = $525   $200,000 = $700

                   $300,000 = $600   $400,000 = $800

The Best Part Is Free!

One of the most important parts of retirement planning is knowing whether or not you are financially on-track for a successful retirement. 

Delta last gave Employees a retirement readiness or “on-track” assessment back in 2000.  Since then we’ve seen several major changes to our retirement plan as well as our financial ability to retire.

Now with Financial Engines we all have free access to a readiness assessment that’s updated everyday.

Actually they call it a “forecast” and it not only tells you your chances of reaching your retirement income goals but if you need them, they’ll also give you suggestions on how to improve your chances of meeting those goals.

Once you’ve entered your initial sign-up info, each time you enter the Financial Engines web site (through your  NetBenefits link) you’ll see statements saying something like this:

“We estimate you will have $46,300 per year of income in retirement.

“You have a 46% chance of reaching your retirement goal of $55,000.  Consider reviewing your plan for retirement or we can provide professional help.”

The Fine Print…

Be aware that if you choose to have Financial Engines actually manage your portfolio there are some circumstances and conditions that you should know up front.

From the F.E. Delta Supplemental:*

Because the Program operates by providing FE full authority to give Provider investment directions on your behalf, once you are enrolled in the Program, you will not be able to make investment directions (changes) directly through Provider (Fidelity). If there are any exceptions to this provision, they are set forth here: None.

You can again exercise direct investment control of your Plan account after canceling your participation in the Program. You can cancel from the Program at any time, with no penalty, by calling FEA, as described in the Terms and Conditions. FE will typically process a request for cancellation within a few business days and forward the request to the Provider. Upon the Provider’s completion of the processing of the cancellation, you will again be able to direct investment of your Plan account.

Also notice below that your portfolio would be reviewed only on a quarterly basis, no one will be reviewing its needs on a daily or an “as the market dictates” basis.

From the F.E. Disclosure Brochure:*

Account reviews. For participants enrolled in the Program, FEA generally conducts account reviews quarterly. The account review process begins with an automated analysis of the account, which generates a progress report and proposed adjustments, if applicable, to the target allocation.

How Good Are They??

For those who are wondering about Financial Engine’s track record as far as managing money in 401k portfolios, nothing is mentioned on their website that discloses their past performance in this area.

Also, Delta Employee inquiries directed to their Advisory Department have generally been rebuffed with this type of response:

“Unfortunately, Financial Engines is not able to provide you with a comparative study of how your account would have done under our management during the past few years. All investors utilizing our program are in customized allocations given the length of time they have until retirement and the amount of risk they are looking to take in the marketplace. Because these investment strategies are customized and are based on investment selections which are different for each employer sponsored plan, Financial Engines is not able to provide annualized performance information. You are able to review the performance information for each of the funds available to you through your Delta 401(k) by contacting your 401(k) plan provider, Fidelity, at 1-800-554-0262.”

Wishing You The Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns

We’ve Been Here Before…

The artificial run-up in value for both the .com bubble and the real estate/credit bubble, loom like two gigantic, twin mountains on the S&P 500 Lifetime Graph.*

Without the artificial, euphoric run-ups the graph would most likely resemble the more realistic growth rate shown prior to 1995.

So as you view the graph, simply draw a line starting at the beginning of 1995 to the low point of 2002.  Then using the established growth curve continue on to today. 

Now you’ll have a better idea of what the real value of the Market actually is. 

As you can see, this very simple analysis uses growth rate data dating back over 50 years.  You’ll also notice that as we stand today, the Market is significantly undervalued.

Sure it could go lower; but the hard part there would be maintaining enough downward pressure to keep market prices lower.

The main point is that shares bought today are being purchased well below actual market value. Maybe not absolute rock bottom, only time will tell us that.

Still, we do know that once the Market turns up for good, rock bottom pricing will disappear probably for quite a while if the past .com bubble is a reliable indicator.

Some Good News

Since the Market Low (3^rd week of November 2008) all Indexes have made positive gains.  As you can see from the chart below, some sectors are making better progress than others.

So we’ll be watching our funds closely and holding them accountable for digging us out of the hole that they put us in.

Since Market Low, Nov. 2008:

Buffett's Metric Says It's Time To Buy

According to investing guru Warren Buffett, U.S. stocks are a logical investment when their total market value equals 70% to 80% of GNP.

By Carol J. Loomis and Doris Burke

February 4, 2009  Fortune Magazine*

Is it time to buy U.S. stocks?

According to both this 85-year chart and famed investor Warren Buffett, it just might be. The point of the chart (see article) is that there should be a rational relationship between the total market value of U.S. stocks and the output of the U.S. economy - its GNP.

Read the Article: Buffet: It’s Time To Buy*

Cramer's 10 Reasons for Optimism

Mad Money Recap: TheStreet.com*

02/06/09

While market skepticism is thick, Cramer told viewers of his "Mad Money" TV show Friday that there are 10 things that are actually going right at the moment.

Cramer said today's market resilience in the face of the horrible unemployment numbers means something. Here's what he thinks is working:  10 Reasons for Optimism: Cramer*

Wishing You The Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns

Will Economy Respond To Medicine???

With January’s S&P 500 loss of over 8% the Market has predicted its fate for 2009.  But the bigger question remains, Will the new Administration turn this economy around or just bury it deeper in recession this coming year? 

So far it seems that a lasting restoration of confidence is becoming more and more illusive for the present Administration much like it was for the last.

Will all the prescriptions from the various governmental agencies finally give us the much looked for turnaround? 

Or are we experiencing a “virus” that must run its course and all the meds can do is help to relieve some of the symptoms along the way?

February will probably see the Market predict whether or not the Administrations Big Shot of Medicine will be effective.  So a down-market for February would most likely amount to a pessimistic “I don’t believe it, show me” opinion.

US set for ‘big bang’ financial clean-up

By Krishna Guha Financial Times *

 Published: January 30 2009

The Obama administration is gearing up for a “big bang” announcement within the next two weeks that will combine a bank clean-up with measures to reduce home foreclosures and probably steps to kick-start credit markets.

The “big bang” approach reflects the belief of Tim Geithner, Treasury secretary, and Lawrence Summers, National Economic Council director, that the Bush administration was wrong to dribble out policy initiatives. Mr. Geithner intends to present a “comprehensive” plan that policymakers hope will command market confidence.

Read More: “Big Bang Financial Clean-Up”*

Also Read: As goes January, so goes the year?*

S&P has worst January drop ever in month known to predict market direction   From MarketWatch.com*

Wishing You The Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

The Next Few Weeks Could Be Crucial…

It’s January and time to start checking the “barometer”.

Traditionally we look at January, the barometer month, to get an indication of how the rest of the year will look for the Stock Market. 

Honestly, we don’t actually believe that we are in for two identical years in a row, but at this point things are looking a lot like last January for stocks.

In January of 2008, the S&P 500 experienced an 8.9% drop during the first part of the month, followed by a partial recovery, to a final loss of 6.1%.

The Troubling Stock Market

By: Ben Steverman BusinessWeek.com  Jan. 21, 2009

The performance of the stock market so far in January has been disturbing. The S&P 500 is down about 9% so far this year.

In 2008, the S&P 500 tumbled 38%. A rally in December trimmed some of 2008’s losses, but many assumed the market was already priced for a very tough economic environment in 2009.

Bruce Bittles, chief investment strategist at R.W. Baird & Co., says that, given last year’s losses and “the huge sums” of cash already sitting in money market funds, “the persistent selling is surprising.”

“This forces the question whether October and November represented a selling climax and the lows for the cycle?” he asks.

Bittles says there’s historical evidence that stocks correct just before a new president takes office and rally within a week or two after inauguration day. We’ll see whether a post-Obama rally materializes.

The stock market’s performance in the next few weeks could be crucial.  For one thing, there is the “January Barometer**,” identified by the Stock Trader’s Almanac**.

The idea is that as January goes, so goes the year. It’s been accurate 91% of the years since 1950, and it was certainly correct last year. The first month of the year can give investors important clues to the financial, political and business climate of the coming year.

For another thing, a strong, or at least stabilizing, stock market could help prop up a weak economy. Bittles notes:

The stock market is critical to the economy for many reasons not the least of which is the confidence factor. Almost without exception, financial crises that tend to overstay their welcome do so because of the loss of confidence. If the economy is to bottom in the first quarter as expected and stabilize by mid-year, a new low in the popular averages would place that in jeopardy.

Another collapse in the stock market would be bad news not just for investors but for everyone else too.

Read: The Troubling Stock Market**

All this speculation simply reminds us of the absolute importance of consistently looking for the best performing funds and protecting our principle, rain or shine.  

Using an umbrella or running into a building when it starts raining hard can keep us ahead of the game in this type of stock market.

“Battle Tested”

SmartMoney magazine recently analyzed more than 5,000 mutual funds to come up with the 100 Best Time-Tested Funds.

Number 1 Fidelity Contrafund  (10-year return*: 2.8%)

No. 11 Fidelity Growth Company (10-year return*: 1.6%)

No. 78 Fidelity Capital Appreciation (10-year return*: 1.2%)
No. 80 Fidelity Puritan  (10-year return*: 2.0%)

*10-year annualized return representing calendar years 1999 – 2008

          (As reported by Morningstar.com)

Read the article: 100 Battle Tested Funds**

Honorable Mention 

With all due respect to SmartMoney’s selection process and the winning Fidelity Funds, we would like to submit the following Delta 401k Funds for Honorable Mention:

Mutual Discovery   (10-year return*:  9.2%)

Neuberger-Berman Genesis   (10-year return*:  9.1%)

Allianz NFJ Small Cap Value   (10-year return*:  8.9%)

Oakmark Equity and Income   (10-year return*:  8.7%)

AIM Mid Cap Core Equity   (10-year return*:  6.5%)

*10-year annualized return representing calendar years 1999 – 2008

          (As reported by Morningstar.com)

Additionally these funds ranked in our Top 20 Performers for 2008 as well as the cumulative past four years.

Wishing You The Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

Where The Money Is Flowing…

Stocks Lost Big In 2008 and at the same time received 99% of all the financial press coverage.  Meanwhile the Market Sector that actually made money just smiled and kept quiet, all the way to the bank.

Who made money in 2008??  Those who kept an eye on the Top Performers in the left hand column know that it was the Government Bond Funds that turned in healthy 2008 profits.

Basically, Depression reared its ugly head and many Investors fled to the Government for shelter.

As this recovery matures Investors will steadily come out from under the Government umbrella and look for returns in the normal marketplace.  But not necessarily the broad marketplace.

As we look at 2009 we’d like to know; Will the Obama “infrastructure stimulation” spending breathe new life to the rest of the Bond Market?  Will Corporate Bonds benefit from the many contracts that are sure to come out of this bailout package?

Is this where the 2009 investment money will flow??  Where are the best opportunities for our investments to grow??

Munis look good as gov't spigot stays open

By Laura Mandaro, MarketWatch.com*  Jan. 8, 2008

SAN FRANCISCO (MarketWatch) -- Debt-ridden states and local governments are poised for a bailout under the incoming Obama administration, presenting a buying opportunity for downtrodden municipal bonds, Pimco founder Bill Gross said Thursday.

Gross, whose management of the world's largest bond fund has made his recommendations closely watched, said he anticipates that the White House under President-elect Barack Obama will "quickly be confronted by the need to provide those hundreds of billions of dollars to states and large municipalities.”

"Municipal bonds then, selling at historically high ratios relative to U.S. Treasurys, offer attractive price-appreciation potential," Gross wrote in monthly commentary posted to the Web site of the Pacific Investment Management Co., known as Pimco.

"Pimco's view is simple: shake hands with the government; make them your partner by acknowledging that their checkbook represents the largest and most potent source of buying power in 2009 and beyond," according to Gross.

The $129 billion Pimco Total Return bond fund PTTRX*, which he manages, returned 4.8% last year compared with a nearly flat performance in the comparable benchmark.

Read It All:  Buy Munis ahead of Obama bailout*

Opportunities Abound in the Bond Market

From Yahoofinance.com

By Christine Benz Morningstar.com* Jan.15, 2009

Christine Benz: I've been hearing that there are a lot of great opportunities in the corporate-bond market right now. Would you say that's the case?

Lawrence Jones: A lot of managers we respect, from Bill Gross at PIMCO Total Return to Dan Fuss at Loomis Sayles Bond and others, have been finding some great opportunities in high-quality investment-grade bonds, which have traded really to almost unprecedented levels.

There has been a dramatic dislocation in the corporate market. There has been a lot of illiquidity. And as we've seen bond prices decline, some high-quality corporations' senior debt now yields 7% or 8% for fairly minimal credit risk. When you see yield levels on bonds like that, it's not surprising that a lot of managers are finding opportunities there.

Read It All:  Opportunities Abound in the Bond Market*

Wishing You The Best Of Returns,

The Fed’s Funds Staff

* Included source links and/or logos serve only to further viewer research and in no way indicates any endorsements, sponsorships or relationships. No accuracy guarantee of their content is implied.  This information is not presented as legal, tax or financial advice.

Reported performances of the past are not a prediction or guarantee of future returns.

Balanced vs. Freedom Funds…

Whether we’re experiencing a bad market or just drawing near retirement, eventually we all look for a safer place to put our money.

We’re not just looking to protect our principal; we’d also like a fair and reasonable return on our investment so we often look to funds that hold a mixture of both stocks and bonds, Balanced and Freedom Funds.

2008 was the perfect year to tell where our money was best protected.  Then comparing 2008 with a 5-Year View will tell us which funds are giving us both the protection and the profit we are looking for.

          ** Fund Inception Date: June 1, 2006

The chart above highlights the Best 5 and the Worst 3.  It’s important to note that the numbers given are “annualized.”  In other words the returns given are “per year.”

No Time To Lose

Golden years tarnished as bear market mauls target-date retirement funds

By Jonathan Burton, Assistant Personal Finance Editor MarketWatch.com*

SAN FRANCISCO (MarketWatch) -- If you were expecting your target-date retirement funds to keep your nest egg on track, you've been off target this year. Some of these investments have saddled shareholders with stiff losses, and probably no one feels more on edge than investors in their 60s who intend to stop working in a couple of years.

Better make that "intended." Target-date funds geared to a 2010 retirement had lost 27% on average for the year through Dec. 11, according to fund-tracker Lipper Inc. That's painful enough for someone nearing retirement, but investors in the most aggressive of these portfolios have seen one-third or more of their savings evaporate -- stripping the shine off their golden years and possibly forcing them to work longer.

Longevity risk

Target-date retirement funds have been billed as "set-it and forget-it" investments. These one-stop shops blend a fund company's stock and bond offerings into a single all-purpose portfolio. Allocation to stocks and bonds is automatically rebalanced over time, and the fund is supposed to ratchet down risk gradually as retirement nears.

Yet a crucial shift in the design of some of these funds has profoundly impacted investors' fortunes in the bear mark