The last couple of days have seen substantial rallies. While yesterday was, at least in part, due to index funds that needed to reinvest the proceeds of Cingular’s cash acquisition of AT&T Wireless, today was a pure jam job. The financial year end for most mutual funds is October 31, and of course annual bonuses for the managers are figured on performance to that date. As you might expect, the fund managers use all the tricks at their disposal to make their performance look as good as possible. This is often called “window dressing”. They do this pretty much every year, as the following table shows:

This is, of course, completely illegal; however, the fund managers don’t care and nobody seems to do anything to stop them, so the practice continues.