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July 12, 2012 -

In This Issue:

The Third Rule of Successful Mutual Fund Investing
Courtesy of the Mutual Fund Informer

Since it's impossible to predict the ups and downs of the stock market, put this cyclicality to work for you with rule No. 3 of mutual fund investing: "Invest in your funds regularly, through all market ups and downs" — a  program of regular investment into the market, no matter whether we're in a bull or bear market, in winter or summer, or on rainy or sunny days. Investing a fixed amount each month into the purchase of fund shares actually confers an enormous benefit of forcing you to buy more shares when prices are low and fewer shares when prices are high.

In the investing world, this is known as dollar-cost averaging, and it's no different from stocking up on staples that you use regularly in your household like toilet paper or laundry detergent when they're on sale at the grocery store. You use these kinds of items each month, but if prices are high you may be apt to buy only what you need. If there's a sale, you may buy more of these goods.

401(k) plans and their cousins, 403(b) and 457 accounts, are great mechanisms to take advantage of dollar-cost averaging. With each paycheck, a fixed amount of money is withheld and invested for you, giving you little (if any) control over the prices that you pay to purchase the fund shares you've selected.

In bull markets (when stock and fund prices are high), your regular monthly investments have less purchasing ability. That's great, though, because it means that you buy fewer of the higher-priced shares.

On the other hand, in bear markets (when stock and fund prices are low), your regular monthly investments buy a higher number of shares, just as you would if a sale sticker was stuck on them.

Download a free sample issue of the Mutual Fund Informer and, for a limited time, subscribe at a special Charter Subscription Rate!

In the next Insider, we'll review rule No. 4: "Take advantage of tax-advantaged accounts whenever possible."

Wash Sales: How to Keep the Accounting Fresh and Clean
by Russell Malley, ICLUBcentral Club Accounting Advisor

This tax season I saw an explosion of wash sale questions. There have been more in the last three months than in all my previous years helping treasurers. I believe this is because of the new rules requiring brokerage firms to track and report cost-basis information.

What's a wash sale? What are the consequences of a wash sale and how is it recorded in the accounting software? A wash sale has two parts. First is the sale of a security for a loss. The next is a purchase of shares of this same security within 30 days before or after the sale. (If the sale results in a gain, then there's no wash sale even if shares were purchased within the 30 days before and after the sale.) When this occurs, special rules apply to the loss from the sale.

First, the loss from the wash sale isn't allowed to be claimed as a capital loss. Next, the cost basis of the shares purchased is in­creased by the amount of the loss. This allows for realizing the original loss when the replacement shares are sold....


Talking About Stocks: Microsoft

Over on, folks seem to be excited about the prospects of a somewhat-overlooked but never-forgotten stock — Microsoft Corp. (MSFT).

StockCentral resident Jenny Sue Hayward kicked off the conversation with a Toolkit 6 stock study (available for download), and Doug Gerlach jumped in with some general agreeement. But he also noted that when you look at the Visual Analysis graph, you can see that the stock price of Microsoft has not gone up very much in the past decade, even though earnings and sales have grown. There is a lot of resistance on the part of investors to value Microsoft on what we might consider a "fair" basis, and so it is particularly problematic to know when the stock is undervalued."

Pat Landers then jumped in with a suggestion that "Microsoft may  be a good buy for those looking for income" based on several reasons.

What do you think about Microsoft's future pontential? Is this perhaps a dividend stock? Download Pat's Toolkit stock study, and join the Microsoft conversation on

Read more ...

Passing the Torch: Preparing Your Club's Next Treasurer

Have you been elected "Treasurer for Life" in your investment club? Or do you have a transition plan in place to ease your club's next financial officer into place? Or are you looking for ways to break in a new treasurer in your club?

At this month's ICLUBcentral Investment Club Webinar, Doug Gerlach will discuss "Passing the Torch: Preparing Your Club's Next Treasurer." During the free online workshop, Doug will review tips for training new treasurers, review how to transfer club accounting software and data, and provide best practice ideas for clubs regarding officer position rotation.

The webinar will be held Tuesday, July 12, 2012, at 9:00 PM ET. Register for the Investment Club Operations webinar series today!

July 12, 2012


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Events Calendar:
First Tuesday of each Month: Toolkit 6 User Group led by Doug Gerlach, ICLUBcentral Inc.

Third Tuesday of each Month: New Investment Club Orientation led by Doug Gerlach, ICLUBcentral Inc.

Doug Gerlach will also be speaking at the following events:

July 17, 2012: Investment Club Operations Webinar; Passing the Torch: Preparing Your Club's Next Treasurers
Doug Gerlach, Speaker

Aug. 2, 2012: Retail Investors Conferences; Doug Gerlach, Speaker

Aug. 7, 2012: Toolkit 6 User Group Webinar; Margins of Safety: Analyzing Profitability in Toolkit 6
Doug Gerlach, Speaker

Aug. 21, 2012: Investment Club Operations Webinar; Superior Stock Selection for Investment Clubs
Doug Gerlach, Speaker

Sept. 4, 2012: Toolkit 6 User Group Webinar; Studying Small Companies in Toolkit 6
Doug Gerlach, Speaker

Sept. 13, 2012: Retail Investors Conferences; Doug Gerlach, Speaker

Sept. 18, 2012: Investment Club Operations Webinar; Managing Your Investment Club's Portfolio
Doug Gerlach, Speaker

Submit Your Event!

Like 7-Eleven, we're not always doing business, but we're always open — go to the ICLUB Store and outfit yourself with the simple, yet powerful tools and services that smart investors have been using to grow their portfolios since 1989.

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Support is here to help. You can reach them M-F, 9:30 AM-6:00 PM at 877-33-ICLUB (877-334-2582), or use the e-mail web form at ICLUB Support.

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