Since the technology heavy NASDAQ has been slammed so bad, I've been considering technology mutual funds. My head is spinning from wanting to buy all the stocks that have been hammered down, so I'm turning toward technology funds which are at their infant stage.

Technology mutual funds that are new, tend to have the characteristics I want:

• Money going mostly in, not out.
For fund managers to be successful in bargain hunting or catching a big fish while bottom-fishing, they need cash. Especially in a long-term designed fund, cash tends to go into a brand-new fund much more than out of it because the fund has all new investors as customers. In an old seasoned fund, the range of customers is from new to old, meaning, there are more people ready to get out of an older fund than a new fund.


• Technology market is slowing down, rather, Techs just took a beating
This is a multi-faceted statement.


The technology market may be slowing down FOR NOW. The human race thrives on technology, it is not going to disappear. Technology will continue to be a very successful sector over the long term. The human race isn't going to sit down now and say, "We've created enough inventions and medical cures, let's just stop now". If there is any one thing that challenged and allows the human race to continue, it is technology. Don't think I havn't forgot about medicine. Medicine is technology too. This is why there is the bio-technology sector.


If technology is slowing down fow now, are you the expert to figure out which stocks to pick? Let the sector mutual fund work for you. Remember that mutual funds designed to specifically to invest in technology are sector funds. This means for stock investors, it is only one step down from your aggressive, proud ways of investing. For generic mutual fund investors, this will be a step up for you, but now is the time to try it out.


• New managers have to put in longer, harder hours to do the best job
The new mangers wil have to do a good job at first to prove themselves. They will be working extra hard for you in contrast to the other seasoned managers who can slack off more.


• Smaller funds can take advantage of the small technology startup companies
The downfall to having a large, established mutual fund is that the fund cannot buy enough of a small company to make a difference in the fund. This prevents the fund from investing in fast starting tech companies. A new mutual fund can buy these small companies and do well.

All of these strategies I concocted in my mind are for relatively short-term mutual fund investing. The theories I have should only last for about a year or two. So take advantage of these stategies but be careful, they are mine. I assume no responsibility for your final decision with your money.

I believe most established mutual fund families have the best odds of success over the smaller families. Some young technology funds that I've found over the last month or two are:

AIM New Technology Fund (ANTAX)
American Century Technology (ATCIX)
Fidelity Wireless Communications (FWRLX)
Fidelity Networking and Infrastructure (FNINX)

For a review of these mutual funds, click here

***Check this out, I came across an article which was written in October, supporting my theories (and adding more), but denouncing these new technology funds for buy-and-hold folks (for years). Remember, I only believe my theories for the same time frame this article also agrees with. Maybe I can be a writer for these guys!!!
Market Watch article