The only software that really has intrinsic value is the software that can predict returns on mutual funds, exchange-traded funds or single stocks.

But, as Chuck Giessen, senior vice president of the financial markets group at SS&C Technologies, points out in this issue, it's not software that generates returns for a fund. It's a portfolio manager or a trader. Individuals who know how to make use of tools, but really are following their own insight into how markets move.

Insight that is not based on trading on inside information. That's not a sustainable strategy. That's so self-evident, that it says here that the worst case at Janus Capital Group and Wellington Management is that some underperforming manager trying to juice up results at a fund let the drive for results overcome good judgment. There are so many stocks in a fund, it can be, after all, deceptively simple to "hide" what you do with one or two. Or why you're doing it.

What really is needed is perceptivity that eludes almost all eyes. And the willingness to be alert, but not overactive, when perception changes.

For instance, most attention since May has been centered on the steady outflow of mainstream money invested long-term in the stocks of American companies.

But, in the week of Nov. 17, what was more noteworthy was what happened with bond funds. All of a seeming sudden, investors turned against municipal bond funds. They pulled out $4.8 billion. That dwarfs the $1.5 billion put in during the previous four weeks.

Which must make American Funds want to step back.

The mutual fund giant is launching a mortgage-bond portfolio and a fund that will own tax-free bonds issued by New York municipalities. In February, it's introducing a global "balanced" fund investing in bonds and stocks worldwide.

Logical steps, in a period when bond funds are more popular than stock funds, in general. But the Case-Shiller Index had housing prices falling in September from August, sending small shivers among economists and fund managers looking for light at the end of the long national mortgage debacle. And New York municipalities continue to scramble to make ends meet.

The key to long-term investing is patience. But that does not mean standing still, when the ground shifts.

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