Conclusion: Closed end funds’ (CEFs) stock volume trading patterns may indicate that the CEF market segment may be heading towards a period of moderately sustained price appreciation.

Volume Counts: Price and volume are two basic building blocks of technical analysis. Non-technical investors have a tendency to focus mostly on price changes and give share volume short shrift. This article reviews the volume characteristics of the CEF market segment for any clues with respect to its price direction.

The Eqcome CEF Big 10 Portfolio is a simple, inexpensive and self-directed way for retail investors to own a diversified CEF portfolio representative of this market segment. The portfolio consists of 10 CEF stocks. Each stock represents one of the largest within the 10 major CEF fund types (see chart below) and has been in continuous operation since Oct ‘04. The CEF Big 10 portfolio was off 3.9% during the period versus the S&P 500 (SPY) off 11.8% and Claymore CEF Index off 37.9%.

Investment Management Underperformance: Seventy percent of large cap fund managers failed to beat the S&P 500; 85.5% of small cap managers failed to beat S&P 600 (small cap); 80% of bond fund managers failed to beat benchmarks (excluding High Yield) (WSJ 4/22/09). It makes you wonder, for what purpose are we paying investment managers? The privilege to lose our money!

Herb Morgan (Efficient Market Advisors, LLC) submits: U.S. and world equity markets experienced indiscriminate selling Friday, while investment grade, high quality debt markets experienced strong performance. Friday's sell off comes amid an extraordinarily strong earnings season. Clearly, market participants are fixated on sub prime lending concerns.

Sub prime mortgages are nothing new; lenders have made high risk mortgages on Real Estate nearly forever. Today, most mortgages are sold to Wall Street firms who package them into Collateralized Mortgage Obligations (CMOs). The CMOs pool the mortgages and further cut the portfolio into traunches. Each traunche owns similar pieces of each mortgage but are pre-assigned various levels of defaults. The vast majority of defaults are assigned to the last traunche commonly referred to as the equity traunche.