FAQ - Management Fees

Market Timing Systems, Inc., is compensated by the Investor for its timing and switching services. The management fee is paid quarterly after the rendering of contract performance by MTSI. If a full quarter has not elapsed then the fees are pro-rated.  This is to provide for new accounts or the closing of existing accounts. Equity additions and withdrawals are also pro-rated accordingly.

There are two ways management fees can be paid:

1. Authorized payment of fees from the Investor's mutual fund account.

2. Full and direct payment from the Investor to Market Timing Systems, Inc., within 10 days of regular billings.

Frequently Asked Questions

1) To open a Rydex account, do I send you the Rydex application and my check?
We prefer that you send us the completed Rydex application and a check made payable to RYDEX so that we can review the paperwork and sign the back of the application, and then forward everything to Rydex. However, you may list us as the advisor on the application and mail the application directly to the mutual fund company. Rydex will then fax us a copy of your application for our signature if it has not already been signed by us.

2) When do I learn when my account has been opened?
Usually, within one day after Rydex has received your application and check, or the funds from an IRA transfer from another firm. You can call Rydex at (800) 820-0888, then press zero for customer service to determine the status of your application or your account. Rydex will promptly send you a first confirmation statement and/or the end of the month statement.

3) Can I find out if a switch has been made on my account before receiving the confirmation statement from Rydex?
Yes, call Rydex. Ask for customer service to obtain information on your account.

4)  I already have an account at Rydex. How do I arrange to have you manage my account?
Mail or fax (301) 296 - 5103 Rydex a written request to have your account managed by Market Timing Systems, Inc., Group #0224 if you wish Rydex Index Funds, or Group #0226 if you wish to use the Rydex Dynamic Funds. Rydex will then inform us of your decision, and your account will be included in the Group of your choice, ready to be traded, usually within one day. We will mail you our Mutual Fund Switching Service Agreement, and other information when you telephone us to request this. Or, simply print these forms off our website!

5) I want to transfer my IRA from another firm to Rydex so that you can manage my IRA. How long does it take to process the IRA transfer?
Rydex forwards your completed IRA transfer form to your other firm. However, you should stay in close contact with the other firm to make certain that they process your transfer in a timely manner, otherwise, it may take some weeks. When the funds are received at Rydex we then begin managing your account.

6) We want to open additional accounts in the names of other family members or relatives. Do you combine the total equity of all accounts so that we can obtain a lower percentage on the management fee?
Yes. Be sure to let us know who your participating friends and family are so everyone benefits.

7) Does Market Timing Systems, Inc., have access to the funds in my account?
No. Without exception, your Mutual Fund Company (i.e., Rydex) is always the sole custodian of your money. All deposits, withdrawals and wire transfers are processed only by your Mutual Fund Company. We are authorized by you to receive management fees only after they have been earned, and to provide to your account our timing and switching services.

8) Do you review the market every day?
You bet! Using our proprietary MASTERTIMER™ statistical models, charting techniques and world-renowned proven timing skills, we produce daily buy, sell or stand-by signals in the OTC/Nasdaq or S&P500 indexes, Sector, and money market funds. The statistical models are only one component that produces the daily decisions that we make for your account.

9) What is "Drawdown"?
Proven money managers with trading systems will always do better or worse from time to time, yet after a short-term loss they usually recover the losses and continue to make profits over time. Drawdown is that statistical characteristic of approximate account losses from a equity high you may expect at any given time. These are normal and expected fluctuations in account value. Our average Rydex Index Funds drawdown has been around 5%. It is greater with Rydex Dynamic Funds. When a drawdown occurs investors should actually consider adding more equity to their account. However, some impatient investors unfortunately become fearful, and reduce their equity, or leave us when a drawdown occurs. A quality investment manager will recover from drawdown and go on to make new additional gains. Not all investors are really as patient as they should be, or need to be, in the quest for long-term appreciation in their account. MTSI's program is best suited to investors with long term performance expectations which permit the account to experience normal and expected fluctuations of value.

10) Does Rydex use margin?
See the prospectus for your Mutual Fund Company. Rydex funds may differ somewhat from time to time as to how they achieve their investment objectives and leverage of their differing funds.

11) May I add or withdraw funds from my account at any time?
Yes, by contacting your Mutual Fund Company you can arrange for a check or wire transfer. For deposits list your account number and mail check directly to your Mutual Fund Company.

12) How often do you switch between the funds?
Frequency is affected by the market, the statistical condition of MASTERTIMER™, and our professional discretion. We actively switch between funds to reduce account volatility. We often hedge positions by allocating all or a percentage equity to Money Market or other positions. See our website for our recent trading history.
13) If I decide I want my account to remain in a particular fund for an extended period of time can you accommodate me?
Yes, we can. Your instructions should be communicated to us by fax, and followed up with a phone call.

14) How are your management fees paid and when are they billed?
For convenience, most investors authorize quarterly payment of our management fees on their Mutual Fund Company application. However, investors may also request that they be billed for the management fees. There is no additional fee for opening or transferring any account to us.

15) Since your methodology involves active switching between Bull, Bear, Sector and Money Market Funds, may I request that the individual confirmation statements not be sent to me?
Yes. On the Rydex application you may choose the box indicating that you do not want to receive individual statements for each transaction. Rydex will then still send you only the monthly and annual statements which detail all transactions on your account(s).

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MARKET TIMING SYSTEMS, INC.
3110 Polaris Ave., Suite 15
Las Vegas, NV 89102
Tel. (702) 889-4655
Fax (702) 889-3970
Internet: www.mastertimer.com

E-Mail: mastertimer@hotmail.com

© 2001, Market Timing Systems, Inc.