Conference nyoss1::market_investing

    
    
    	If interest rates fall again (hopefully) you will probably recoupe
    most of your principle. If you are really that worried about the 
    volitility of the NAV you should probably stick with a money market or
    CD.
    
    John

	I own a few shares of Strong's Municipal Bond fund.  Though this fund
has been performing well, it too has gone down a bit in the last few months.
Most of the decline in the bond and equity markets can be attributed to the
uncertainty in the world and US economy and the US elections.

	Whether you should sell now depends on how optimistic you are on the
future economy and on how much risk you are willing to tolerate.  Since
your investment horizon is fairly short (1.5 years), you might feel more at
ease if you put most of your money in a money market fund in order to preserve
your principal.  I would suggest a municipal money market fund (Strong has 
one that I also use).  Many municipal money market funds have interest rates 
that rival conventional money market accounts and income from these funds 
are free from federal income tax.

- John

>        ... 1.5% decrease in value over 3 months ...
>   Is it reasonable to expect such a dramatic drop in value over 3 months?
>   ...

      Yes  this  is  a reasonable expectation.  In fact, if you consider
      1.5% to be a "dramatic drop" you probably should consider  staying
      in CDs or a Money Market account rather than a bond fund -- even a
      short term bond fund.  Don't forget that you  haven't  lost  1.5%;
      part  of  that  is  offset  by  dividends.  If you're re-investing
      dividends you now own more shares and  you'll  probably  find  the
      total  value  of your account fairly close to what it was when you
      first bought the fund.
      
      Should  you sell???  I believe that you stated you have a 1 to 1.5
      year time frame.  With  that  time  frame  in  mind  I  would  not
      recommend that you sell just because of this drop in price.
      
      However,  if  you  believe  that interest rates will rise then you
      should sell.  Likewise, if rates actually do  start  to  rise  you
      may want to sell.
      
      Or  you might wait for the price to swing back up by 1.5% and then
      sell and move into a more comfortable [for you] money fund or CD.
      
      Or you might wait for 1 year (9 more months) and then try to catch
      a high point in the price swings during the following 6 months.
      
      On  the  other  hand, if this 1.5 drop in price keeps you awake at
      nights, then by all means sell now.  An investment that makes  you
      uncomfortable is not a good investment for you.      

Does anyone have an opinion about the Strong Advantage Fund? It's billed this
way:

"An ultra short-term bond fund" that "seeks a high level of current income with
minimum fluctuation of principal. If you seek higher yields than a money fund
currently offers, and can accept some price fluctuation, consider the Advantage
Fund."

It's 100% no-load, with free check writing. According to the Strong literature,
it has Morningstar's 5-star rating.

I'm thinking of using it as a second money market fund, for money I want easy
access to.

Vicki Meagher

    I am not familiar with the Strong Advantage Fund. But, what I see is
    that you still have some principal risk. Is this something you are
    willing to take? With the recent round of talk about cutting taxes,
    you may see some further increase in short-term interest rate.
    
    Just my $.02
    
    Mike

    I was using the Strong Advantage fund for about 2 years as a CD
    alternative.  When CD and money markets were yielding 3% the
    Advantage fund was yielding 7%.  Their share price fluxuation was
    the smallest of any fund I have ever seen!  When I held it varied
    from only 10.01 to 10.19, the only way to beat that is money market.
    As an alternative to a 3% CD it was an excellent fund.  In my opinion
    it had a high management fee for a bond fund (about 1%) but overall
    I would agree with the 5-star rating it received.  If you buy into
    the fund, wait until January, to avoid the december mutual fund
    "tax trap".

    Now that interest rates are back up, I have sold the advantage fund
    shares and bought 1 year treasury bills.  7.0% yield, and no state
    taxes for me (I paid state tax on Advantage fund interest).  But you
    need at least $10K to buy treasuries directly.

    Keep in mind if you use the funds and write checks then there will
    (most likely) be capital gains/losses each time you write a check.
    Doing taxes each year is a pain and I try to minimize my Schedule D
    transactions.  Even though the price may only change .01/share it
    will be treated as a capital gain/loss.  I prefer leaving some extra
    in a lower yielding money market.

    
    what do they invest in?