This is one of those classic glass half full or half empty metaphors. The optimist uses this cliché to point out that no matter how bad things seem, there is hope down the line. The pessimist sees the headlight of an oncoming train rushing forward to crush the observer.

Since the Global Financial Crisis started, we have certainly seen our fair share of Express Trains coming through the tunnel. Despite calming assurances that we were almost clear of the worst parts of the recession, we have had to cope with property busts, toxic assets, higher than expected unemployment, sovereign debt crises, bailouts and contradictory signals of inflation and deflation.

But this time the light at the end of the tunnel may be of the positive variety. Although the ranking orders have not changed dramatically in most of our portfolios, we are starting to see more positive numbers lower down in the rankings for the first time since April of this year. Since the Fund King System looks to capture the medium term trend, the uptick suggests that strength is building in select asset classes. Given the relatively limited upside available in government bonds, we would not be surprised to see some ranking changes in the coming few weeks. Whether Gold and Silver can maintain their leading status will depend largely on how much panic we have left in the system (panic has not been in short supply over the past few years). This is a good time to pay attention to the direction the Fund King System is indicating because most asset classes have been fairly directionless for almost half a year.

Are their downside risks? Of course there are and if you want to give yourself a good scare, check out some of the hyperinflation articles that have been running on the ZeroHedge Blog. There have been a number of good articles on hyperinflation lately which correctly point out that hyperinflation is not the result of really strong inflation but rather a loss of faith in the currency. Therefore, a bit of deflation beforehand is no inoculation against subsequent bouts of hyperinflation. This is a serious topic which does not seem to be on the agenda in Washington, Brussels or Tokyo.

New Feature

In response to requests and hopefully in time to take advantage of slightly better market conditions, we are taking the wrapper off our SPDR Component Stock Ranking Engine. The Ranking Engine takes 15 ETFs from the SPDR series that represent different subsectors of the US Stock Markets. It ranks the component stocks at the end of each day and presents the tickers in order of their ranking. We are still working all the last bugs out so if you find an error, please let us know. This feature is available to Gold and Silver members.

In the coming weeks we will show you several ways in which to use this function to help build a portfolio which should keep you invested in the strongest bits of the market at any given time.

Investment Website Reviews

We are also busy building up a library of website reviews. With all the choices available on the web, our goal is to provide a useful clutch of websites which can help inform your investment activities. Take a look at the Websource tab on the Fund King Website. Please feel free to leave a comment (positive, negative or otherwise) and please feel free to suggest other sites that we may have overlooked. If you see a review that you feel is useful, click the Facebook “like” button to share it with your friends on Facebook.

Taiwan Analytics

We are also taking the wrapper off of a new website that we have been plugging away at for several months. This website takes the data off of the Taiwan Stock Exchange Website at the end of the session and crunches it into usable information about what institutional investors are buying, selling and holding in the Taiwan market. As interest swings back towards Asian Equity markets, we hope this will help our institutional investors fine tune their Taiwan portfolios. If you have any comments, suggestions or criticisms, let us know.

One of the great things about having children is that one can keep up on the latest trends and expressions. Years ago, I was introduced to the concept of “TMI” or Too Much Information.

The concept of TMI is not limited to preteens trying to out-cool one another, however.

When it comes to financial markets, the desire to collect and analyze information and data is insatiable. In the past, only the largest financial institutions had the resources and capabilities to handle truly massive amounts of data and information. Now, with the internet wired into our PCs and other devices, the average investor can easily swim in the “data sea”. As our RSS Readers and email inboxes clog with unread messages and articles, we should ask two questions: Why is information so important? And, is there such a thing as too much information?

Why is information so important?

One of the first principles of the Efficient Market Hypothesis is that the current market price of an asset equals the discounted value all available information.

While that statement is designed to point out the futility of trying to outperform the market by reading the newspapers, it has spawned an effort by investors to actually try to gather “all available information” in an attempt to more fully understand the asset prices and thereby gain a marketable edge. Naturally, the effort is doomed to some level of failure. Because it is impossible to gather “all” the information, financial firms endeavor to capture a statistically significant amount of information and data. This still represents a massive amount of information and data that must be organized so that analysts and fund managers can use it to make investment decisions. The sum total of this data collection, crunching and processing is generally marketed to the investing public as the insurmountable barrier to entry that can be surmounted by becoming a client. When financial firms talk about what they sell (whether the buzzword is “mindshare”, “intellectual capital” or whatever), the fruits of their information gathering is front and center.

Can we have too much information?

This question is heresy in most corners of the investment world because so much effort goes into the acquisition of information and that in turn is the core of the value proposition offered to clients. It also violates conventional wisdom because more must be better. The more we know about a situation, the better we will be able to address it. The principle certainly holds in most professions. Doctors are constantly seeking to upgrade their knowledge of the latest developments and procedures.

But the question remains: Do your decisions improve with greater amounts of information? Specifically, will your investment performance improve in proportion to the amount of information you acquire?

Surprisingly, the answer is only up to a point. A number of studies have shown that while a certain amount of information is beneficial to decision making, extra information piled on after that point may add or detract from the decision maker’s conviction but the quality of the decision making actually tends to deteriorate.

The reason is tied to the nature of the information in the financial markets. Unlike medical knowledge, financial information does not have as rigid a framework. The old children’s song about “the hip bone connected to the leg bone” does not have a financial markets equivalent because the connections between the data and the resulting market performance are not as robust as regression analysis would seem to suggest.

What’s an investor to do?

In an effort to help streamline the decision making process, we have initiated a new feature on the Fund King website that will review market resources that we feel represent the critical information that one needs to make good investment decisions.

We call it WebSource and we expect it to serve two purposes.

The first purpose is to highlight sites on the web that we believe can add value to your investment process. We break it into three categories:

• Market data and charts
• Fundamental information and opinion
• Economic outlook

The second purpose is to demonstrate how much useful information is available for free or very low cost. There is a tremendous amount of information out there in cyberspace but that doesn’t mean you have to pay over the odds to access it.

We hope you will find this new feature useful and look forward to your comments.

While most of us are happy to just buy ETFs that cover a region, market segment or sector that looks promising in our investment universe, we have received a number of requests to make it easier to evaluate the constituent members of the ETFs. This should allow you to use a simple top-down method to identify stocks that are well positioned to outperform in broad market rallies.

We start with 11 ETFs from the State Street’s SPDR Brand of ETFs because they cover well known market segments and liquidity is generally pretty good.

A note of caution: we built the Fund King System with Mutual Funds and ETFs in mind because these investment vehicles offer some built in diversification of company specific risk. The methodology we use works with individual stocks as well but make sure that any portfolio you build is diversified enough so that a specific company problem (say an undersea oil well gusher) does not wreck your portfolio.

Click Here To Get Started!