Columbia Management Group has introduced the Columbia Thermostat Fund, a fund whose investment mandate permits it to reallocate between five stock and three bond mutual funds.

As the S&P 500 rises and stocks become more expensive, the fund will sell a portion of its stock funds and invest in bonds, and do the converse thing as the S&P falls. But the decisions to switch the bond/stock ratio is determined by preset levels.

"Buying against the trend – selling strength and buying dips – aims for modest, steady growth that we believe may help out even out the sharp moves in the stock market," said Ralph Wanger, creator of the fund. "The buy-and-hold strategy has worked marvelously in bull markets," agreed Chuck McQuaid, a member of the fund’s advisor board. "However, there have been long periods in the past when buy-and-hold was not the best strategy, such as 1930-1954 and 1969-1981, when the market fluctuated but did not make significant new highs."

The five stock funds the Columbia Thermostat Fund has as its disposal are: Liberty Acorn, Liberty Acorn Twenty, Liberty Growth Stock, Liberty Growth & Income and Liberty Select Value. The bond stable includes: Liberty Federal Securities, Liberty Intermediate Bond and Columbia High-Yield.

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