                 DALTON MUTUAL FUND MODEL (v2.0) 
 

                     TO GET STARTED QUICKLY
________________________________________________________________

INSTRUCTIONS: 
      
     If this is the only thing you read, READ THIS: Before 
starting the program (FUND.EXE), run the setup program
(SETUP.EXE) by typing in 'SETUP' and pressing <Enter>. With this
program, you can use UPPER or lower CAPS. Make sure, however, to
press <Enter> after you have entered any data in the program. 


     This is shareware software. If you find this program of
value, send $5 to: 
 
                     Dalton Software Associates 
                     909 N. 1550 E. 
                     Layton, Utah 84040 
________________________________________________________________

                     OPERATING THE PROGRAM 


SETUP:  
 
     Just type in 'SETUP' and let the program run. The computer 
will prompt you for the four previous day's or week's values of
the following indicators: Your Stock Market mutual fund (1 or 2
of them), the Dow Jones Industrial Average, and the S&P 500. In
addition, the computer will want to know the latest value of the
Prime Interest Rate. This in turn will create the data files that
the program needs to write and retrieve data. The previous four
day's/week's values are needed so that this program can start out
with a "smoothed" average of the indicators, thereby avoiding any
conflicting signals in the beginning of the program. 

NOTICE: If you do not have access to the previous four day's (or 
week's) info., just put in the values that you do have. It must 
be emphasized that without a four day average, the model will 
tend to give "whipsaw signals" in the first few days of use. 
IF YOU DO HAVE moving averages already, just type in that number
for each of the four prompts.


FUND:  

      Type 'FUND'. The running of the program is an easy 
endeavor. At the bottom of each screen there will be instructions
as to whether to proceed, go to a previous screen, quit, or
print.
  
DAILY OR WEEKLY DATA?

     This program offers two different ways to go about switching
between a Stock Market fund and a Money Market Fund:   

           1) On a daily basis or  2) On a weekly basis.  

      One must make the decision of which one to use - you 
cannot use both at the SAME TIME or else you will get conflicting
signals. One CANNOT input data one day for a daily value and the 
next day for a certain week. Therefore you must make a decision 
and stick with it. For those of you who keep up on the market on 
a daily basis, Choice #1 is for you. For those of you who are not
tuned in to the markets on a daily schedule and would just rather
update your portfolio on the weekend, use choice #2.  
 
NOTICE: It must be pointed out that there will be more precise 
signals if one uses this program on a daily basis than on a 
weekly schedule. This is so because on a daily basis you are 
simply giving the computer more data to use, which results in 
more precise buy/sell signals. 
 

INTERPRETING THE BULL/BEAR SCREEN

     We SUGGEST the following usage of the point structure found
in the Bull/Bear Screen:

     EXTREMELY BULLISH: Buy (go into a stock fund).
     MILDLY BULLISH:    Buy/Hold (stock fund).
     NEUTRAL:           Sell (go into your money market fund).
     MILDLY BEARISH:    Sell (go into your money market fund).
     EXTREMELY BEARISH: Sell (go into your money market fund).

     In addition, one might want to use percentages of stock and
money market funds. For example, given a neutral sign, go into
50% stock, 50% money market fund. Or given a mildly bullish
sign, go 70% stock, 30% money market fund.


FINANCIAL INFORMATION:  
 
     MOST daily newspapers will have a Financial/Business section
that lists all of the indicators used in this program. If you do 
not have access to one, watch the Nightly Business Report (NBR) 
or a national or cable program that has access to financial 
information. Newspapers such as Investors Daily, which has an 
excellent price section on mutual funds, or the Wall Street 
Journal provide excellent data. This whole program is 
designed around the concept of a minimum time/money effort in 
getting the information EASILY and using it QUICKLY. 
 


PURPOSE:  
 
     The purpose of this software program is to provide a way for
individual investor's to have a simple, consistent, investment 
program that allows an easy, proven method to switch their money 
between a Stock market mutual fund and a Money Market mutual 
fund. This program is designed with a long term, conservative
philosophy in mind - therefore one is not switching their assets
every two weeks. Rarely will you find yourself switching your
money more than a few times a year. This is not a program for
short term professional traders. 
 

METHOD:  
 
     This program uses both a technical and fundamental approach 
in its design. It has been an OVERRIDING concern to use various 
market indicators that are at once very available to the public 
and have proven themselves over time. It has taken months 
to test over and over various technical and fundamental 
indicators that are suitable for mutual fund switching and at the
same time are available in everyone's newspaper. This program 
uses the following market indicators: 
 
          A) Exponential moving averages of: 
 
             1) Your Stock mutual fund 
             2) The Dow Jones Industrial Average 
             3) The Standard and Poor's 500 Composite Stock Index

          B) The Prime Interest Rate 
 
     These indicators are given various points according their 
performance (i.e. Is the S&P 500 Index value above or below it's 
200 day moving average? If so, so many points are awarded and 
so on for the other indicators). These are then added up on a 
rating scale and a structure is used to determine whether or not 
to switch between a Stock mutual fund or a Money Market mutual 
fund. 
 
     It has taken many months to determine just precisely which 
rating scale to use and what structure to base it on. The one 
structure that is presented in this program has been tested over 
a period of months using current and historical data and has been
found to give the best sell/buy/hold decisions out of the many we
have tested - yes, you would have been out of your Stock Market 
mutual fund and into Cash (a Money Market mutual fund) during the
October 19 crash. For our own testing we used Twentieth Century's
Select/Growth Investor's and Cash Reserve accounts using both the
daily and weekly options (for the weekly option we updated our
portfolio every Friday). 
 


WHY THIS METHOD:  
 
     Switching between a Stock Market mutual fund and a Money 
Market fund at the correct time can prove to be very profitable 
over the long term. Under this assumption, switching has proven 
to be to much better than a simple buy/hold strategy. We chose to
use the above indicators for a number of reasons. In terms of
technical analysis, moving averages have been found to be a very
reliable indicator out of the gamut of indicators in the
marketplace. Time and again, during MAJOR trends in stock market
action, moving averages have given superb signals. Our decision
to use exponential moving averages was based on the fact that
exponential moving averages are weighed more toward current price
action and therefore give more accurate signals based on current
market conditions, rather than treating all prices/values alike
as in a simple moving average.  
 
     Likewise, the decision to use the Prime Rate instead of 
other indicators was that it was found to be a very accurate 
indicator of FUTURE stock market action. Over time, it has proven
itself to be a very reliable monetary indicator. Moreover, it is 
widely available in daily newspapers, not just in Barron's or the
Wall Street Journal. 
 
      Using the Dow Jones Industrial Average and the Standard and
Poor's 500 Stock Composite Index was an easy decision. 
The Dow, even though it is made up of only 30 Industrial stocks, 
is still the one indicator that is most closely followed and 
predicted upon when dealing with stocks. The addition of the 
comprehensive S&P 500 index is used to insure that market action 
is going in one direction before the model gives a buy/sell 
signal, thereby avoiding many "whipsaw signals."  
 

TYPE OF MUTUAL FUNDS?:  
 
     In terms of picking mutual funds, we SUGGEST a no-load 
mutual fund family that will allow QUICK switching between 
different funds (especially a Stock Market fund and a Money 
Market fund!). It is very important that you find a mutual fund 
family that will allow switching from one fund to another within 
a minimum of a few days and will not charge you excessively for 
it. This is to protect the investor from any (hopefully none!)
whipsaw signals one might encounter. 
 
     A good place to start picking funds would be to look at 
FORBES annual Mutual Fund Survey. This is where all of the 
available funds are rated, indexed, etc. and one can gain a lot 
of valuable information looking over the annual issue. 
 
     In addition, there are many surveys put out by many 
magazines - Money, Financial World, Consumer Reports, etc, that 
can help the individual out immensely. Check out your 
neighborhood bookstore for more information.  
 
 
MISCELLANEOUS:

     If for some reason you want to erase the previous day's
week's data from the files, goto DOS and at the prompt type 'del
*.dat' - and that will erase the old values.              


             HISTORY OF THE DALTON MUTUAL FUND MODEL

1/88 - Began the first version (1.0). Consisted of simple        
       buy/sell signals based on moving averages.

3/88 - Went to version 1.1. Added DOW, S&P 500, Prime Rate, etc.

6/88 - Version 1.2. Added a well tested scoring system of the    
       DOW, S&P 500, the Prime, and a stock mutual fund.         
       Subsequently released as shareware.

10/88  Version 2. Can handle 2 Stock mutual funds, ease of use   
       and external features are improved (date, name of stock   
       funds, outline of screens, etc.). Included a new bull/bear 
       screen in place of straight buy/sell signals. This gives  
       the individual investor more leverage to make up their own 
       minds as to the percentage of assets to be allocated.


               Future, improved versions to come.




                         !! DISCLAIMER !!
 
     Finally, it must be known that although this program has 
been designed so as to provide a safe, healthy return on your 
investment, Dalton Software Associates assumes NO RESPONSIBILITY 
for any losses or damages resulting from the use of this 
software. 
 
 

         ----------------end-of-author's-documentation---------------

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