Market Timing Systems, Inc.
3110 Polaris Ave., Suite 15
Las Vegas, NV 89102
(702) 889-4655     Fax (702) 889-3970

Dear Investor,

In order to open a new account at Rydex, and to authorize Market Timing Systems, Inc., ("MTSI") to manage it, the (1) "Mutual Fund Switching Service Agreement", (2) "Transfer - Authorization for New or Existing Account" ,and the (3) Rydex application, forms need to be completed and returned to us. You can print our MTSI forms (1) and (2) from our website. For the Rydex application, go to their website. (For IRAs or Transfers fill out the appropriate Rydex forms which can also be downloaded from the Rydex website.)

In order to transfer funds to a existing Rydex account, from within, or from outside of Rydex, and to authorize Market Timing Systems, Inc., to manage your account, both the (1) "Mutual Fund Switching Service Agreement" and the (2) "Transfer - Authorization for New or Existing Account" forms need to be filled out, signed, dated and returned to us. You can print these 2 MTSI forms from our website. (For IRAs or Transfers fill out the appropriate Rydex forms which can be downloaded from the Rydex website)

A) On the Rydex Series Trust (red) application fill out the appropriate parts in sections 1 & 2. In section 3, check off the first box in order to have your funds initially deposited in the interest bearing U.S. Government Money Market Fund. Read section 4 and then sign where indicated.

B) Read and sign section 6. This authorizes us to manage your account. We will sign this section too. Check off the top box and sign the right side for automatic payment of management fees from your Rydex account. There are no switching fees or loads. Management fees are assessed after the end of each calendar quarter.

C) On the Mutual Fund Switching Service Agreement print your name in the space provided in the first paragraph. On page 3, print and sign your name and date the agreement. Additional signatures are required for joint accounts. If you are a partnership or a corporation, then sign where indicated.

D) On the Transfer - Authorization for New Accounts, print your information, and sign your name and date the agreement. Additional signatures are required for joint accounts. If you are a partnership or a corporation, then sign where indicated.

At the end of the Switching Agreement is a box choice for your account's use of the Rydex Index Funds, or the Rydex Dynamic Funds. If no choice is given we will use the Rydex Index Funds for your new account. The Rydex Dynamic Funds offer a distinct advantage of two trading opportunities per day compared to one for the Index Funds. However, the overall leverage ratio is greater, which could expose a Dynamic Fund account to greater risks, although 2 trading opportunities per day is a offset to that risk. While we believe the benefit of the extra trading opportunity is a offset to the greater risk, you must determine your suitability for this additional use of leverage by the Rydex Dynamic Funds.

For new accounts, mail us (1) "Mutual Fund Switching Service Agreement", the (2) Rydex application, and the (3) "Transfer - Authorization for New or Existing Account", along with your check payable to Rydex for their minimum of $15,000, or you may wire the funds into your new account after we have sent in your materials and the account number has been assigned. Upon receipt of your forms we will also sign the Rydex application as your Advisor, and then forward your materials to Rydex.

If you have any questions regarding these materials or precedures, please contact our office.


We will do our best for your account,

Mark Shinnick, President

PLEASE SCROLL DOWN TO NEXT PAGE FOR OUR SEC FORM ADV PART 2 SUMMARY AND RELATED DISCLOSURES

ADV Part II Summary

Biography of Mark Shinnick
President

Mark Shinnick, President of Market Timing Systems, Inc., first began developing mathematical models describing Stock Market behaviors well before his first market investments at the age of nineteen. His interest in the markets became engaged at a early age; "I recall regularly hopping into my mother's new 1966 Ford Mustang parked in the driveway as a 7 year old, switching on the radio and listening for stock market news...anticipating what the market might have done that day. My grandfather had admonished that, to be a successful investor, one had to be a student of the market. In fact, for me, the market has been a life-long study.".

By 1984, Mr. Shinnick had modeled and traded thirty-five different commodity markets and stock indexes and developed an extensive stock market-oriented statistical background while he developed his unique technical analysis indicators and risk management strategies. By 1992, Mr. Shinnick had modeled over 1250 mutual funds.

In 1986 he began incorporating these strategies into his proprietary real-time market timing software models, which are the evolutionary basis for the current MASTERTIMERä model. Mr. Shinnick's MASTERTIMERä models span over 420,000 lines of unique computer codes. Mr. Shinnick met Gregory Meadors in 1994 and since 1995, these models also incorporate many of Greg Meadors' proven proprietary methodologies - the very same ones he used to win the 3-year Stock Market Methodology Showdown Trading Contest from 1994-1997.

In 1989, at the height of that real estate market, Mr. Shinnick liquidated the last of his developments which he had held since the deep real estate market lows of 1981. He then devoted his full time to modeling, investing in and trading stocks, options, and commodities for both personal and client accounts. Mr. Shinnick began trading mutual funds on a full time basis in 1992 using his personally developed MASTERTIMERä software program codes.

In 1983, Mr. Shinnick was credited with the saving of the lives of a couple upon finding them incapacitated inside their automobile, which was almost engulfed in flame. Mr. Shinnick is also credited by his former neighbors for helping to evacuating one family, and then saving a total of 7 custom homes (including his former one) during the Malibu firestorm of October 1993, which killed 2 of his neighbors as they attempted to escape the flames.
Since 1997, Firestormer is the automated fire defense system being developed by Mr. Shinnick in his spare time to help prevent similar future threats to losses to life and property.

From 1994 to 1998, assisted Collier Award (Voyager, 1986) winner Dick Rutan in high altitude human physiologic testing, systems and component design, fabrication and testing, flight preparation and in-flight operational support of the Hilton Hotels' Global Hilton around the world balloon project vehicle, launched January 1998.

In 1998, Mr. Shinnick became President of Market Timing Systems, Inc., CO

Biography of David Kahn
Chief Operations Officer and Corporate Counsel

David Kahn's past positions include President of StableGate.com, Inc., Corporate Counsel-President and CEO of L.F.P., Inc., a $250 million magazine publishing and distribution company, and Assistant to the President of Avnet, Inc. A Fortune 300 company. His prior experience also includes six years legal counsel with ITT, three years with Union Carbide Corporation, and one year with Mattel Inc. During his tenure as President and CEO of L.F.P. Inc., Mr. Kahn increased the company's pre-tax income by more than $7,000,000 annually, from a loss of more than 4 million to a profit of more than 3 million.

Mr. Kahn's education includes a B.S., Magna Cum Laude from the Wharton School of Finance and a LL.B from Harvard Law School. While at the law school, Mr. Kahn won the Bull & Bear Club's investment contest for two consecutive years. Mr. Kahn's senior thesis in college was the "Profit Potential of Selling Short Warrants on the American Stock Exchange Six Months Prior to Expiration".

Some of David Kahn's past responsibilities have included:
Assistant to the President, responsible for analyzing and recommending the business decisions in various areas, including investment and dispositions; Group Controller, responsible for approving gross margins, net income, and deviations from standard policies.; Group Asset Manager, responsible for controlling the levels of receivables and inventories and for maximizing cash flow and return on assets.; Group Business Plan Coordinator, responsible for the consolidation of the unit business plans and the preparation of group strategies for maximizing cash flow, growth rates and return on assets.
Mr. Kahn joined Market Timing Systems, Inc. in 1999.

ADV Part II Summary

1. Advisory Services and Fees:
A. Market Timing Systems, Inc. ("MTSI") manages investment advisory accounts not involving supervisory services. MTSI is a Investment Advisor.
B. MTSI does not provide financial planning services.
C. MTSI offers investment advisory services for a percentage of assets under management.
D. Management Fee Schedule. MTSI provides a daily market timing and switching service to client accounts. Fees are not negotiable. See Section 12 of the Mutual Fund Switching Service Agreement for details of terms. Management fees are payable in arrears on the total adjusted dollar value of the account at the end of each calendar quarter as follows:

2. Types of clients MTSI generally offers service to are individuals, banks, thrift institutions, investment companies, pension and profit sharing plans, trusts, estates, charitable organizations, corporations, and business entities other than those listed above.
3. Types of Investments: MTSI offers market timing and switching upon client's mutual fund shares.
4. Methods of Analysis, Sources of Information, and Investment Strategies:
A. MTSI's security analysis methods include: models, charting, fundamental, technical and cyclical.
B. The main sources of information MTSI uses include: timing services, market data and charts.
C. The investment strategies used to implement any investment advice given to clients include:
Short term purchases (securities sold within a year) and trading (securities sold within 30 days).
5. General standards of education or business experience required by MTSI of those involved in determining or giving investment advice to clients: Must have at least one of the following: twenty-two years experience in market timing and technical analysis, twenty five years general business experience or MBA education.
6. Personal, Education and Business Background: David Kahn was born 1942. Mark Shinnick was born in 1958. See biographies on page 1.
7. Other Business Activities of MTSI: None.
8. Other Financial Activities or Affiliations of MTSI: None.
9. Participation or Interest in Client Transactions: None. MTSI does not engage in "insider trading".
10. Conditions for Managing Accounts: None.
11. Review of Accounts.
A. MTSI provides a pre-trading review of the mutual fund company report of client's account positions. Review is performed only by the office of the President. Mr. Kahn is not involved in the review or trading of client investment accounts.
B. Clients' transactions are reported directly from the mutual fund company. A monthly statement is mailed to clients directly from the mutual fund company.
12. Investment or Brokerage Discretion Review of Accounts.
A. MTSI or any related person does have the authority to determine, without obtaining a general prior client consent, the securities or amount of securities to be bought or sold. Limited to Mutual Fund Shares only. MTSI or any related person does not have the authority to determine, without obtaining specific client consent, the broker or dealer to be used or the commission rates paid.
B. MTSI or any related person does not suggest brokers to clients.
13. Additional Compensation. MTSI pays a portion of its management fees to third party RIA's/Solicitors in consideration for the introducing of new client accounts. MTSI also pays third party management firms for fees received for the providing of sub-advisory switching services to their client accounts.
14. Balance Sheet. MTSI is not required to provide a balance sheet since it does not have custody of client funds or securities, and does not require prepayment of client fees.

ADV Part II Summary - Page 2 of 2 © 2001, Market Timing Systems, Inc. NV

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