Mike Westfall: invest with rising momentum concept

world | Feb 14, 2008 | By Martin Barillas

Not long ago it was expected that each new generation of Middle Class Americans would do better financially than the previous generations. They would work at one job for a lifetime and the employer would take care of them for life. Today that is just simply not the case.

Luckily, Americans still live in the land of opportunity. For their family's sake, the family breadwinner needs to expand his or her horizons and take more responsibility for their own financial destiny. They need to learn the practical investment techniques of successful investors and especially heed the advice of flourishing investors who have come from the ranks of working America.

Mike Westfall was a high-level official in the United Auto Worker's union, an early collaborator of film-maker Michael Moore, and a gadfly since then of labor unions that side with organizaitons and movements that he considers at odds with workers' family values and Christian beliefs. Here follows an interview with Westfall, who has also become a successful investor.

Martin Barillas: How did you begin investing?

Mike Westfall: I have been a private investor for over 40 years. I began investing in real estate and bought my first fixer-upper house when I was only 18 years old. While my young friends and co-workers would buy new sports cars, I would buy old houses and distressed properties.

As I got older I moved up to larger pieces of acreage and waterfront parcels. In a few short years my friend’s cars had rusted and depreciated away while my real estate had appreciated. Profits from the real estate were eventually used in part as seed money to enter the stock market.

MB: Do you believe that Americans should take control of their own investing and if so, why?

MW: Yes I do. The right financial consultant can be a resource if someone needs one to hold his or her hand. I, however, have chosen to be responsible for my own investing.

In my early investing, my consultants with their shiny new Rolexes and new Lincolns tended to direct me into high commission limited partnerships which lost me money, took years to get out of and had negative tax consequences. They also directed me into other high commission inappropriate high maintenance cost investments and then churned my accounts for even bigger commissions.

I learned over time that with a workable investment strategy an investor really can make the investment decisions themselves and save an incredible amount of money in commissions and costs over the years.

MB: Could you explain your technique of rising momentum investing in no load mutual funds?

MW: It is trading the finest performing; most diversified no-load mutual funds in the world without tax consequences. You evaluate and incorporate momentum techniques that replace your laggard funds every six months.

There are two parts to understand with this concept. The first part is rising momentum. This means that at any one time there are certain mutual funds that are seriously outperforming their peers. These funds generally take a period of time to fall back in line with their peer funds.

When you have a freight train moving down the rails at 80 miles an hour you have incredible momentum. When you slam on the brakes, the train doesn’t stop on a dime. It takes a very long distance for the train to come to a stop because of its momentum. Top performing mutual funds tend to behave much the same way.

The second part of this process is that while virtually all mutual funds do have ongoing maintenance costs, I only buy no-load mutual funds. This means that I only buy funds that are void of commissions.

While I don’'t need a financial consultant, I do need a financial broker to make my trades. This method of investing can be simply and quickly done


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