A major catalyst for this weeks rally was the Citigroup (NYSE: C) report that it had managed to turn profits in the first two months of the year. In a letter from CEO Vikram Pandit told Citigroup employees that the troubled bank was on track, based on historical trends, to generate profits of $8.3 billion in the first quarter of the year. That pushed a hard almost seventy percent rally for Citigroup shares this week and, despite giving some ground today, an almost ten percent rally in the broader markets.

This is most likely a bear market rally though, with more bad data coming out next week. While TIC flows will likely remain strong, the dollar’s still the currency to hold for now, industrial production almost certainly weakened further with an accompanying drop in capacity utilization.

Real estate data probably doesn’t even bear mentioning. The housing market index likely continued weakening as starts and sales slowed further.

Finally, both the producer price index and consumer price index likely fell.

I expect Wednesday to be a particularly bad for the markets because despite the positive sentiments expressed by some on the Federal Open Market Committee over the past few years, I expected that the minutes of the last meeting won’t be particularly bullish. That release will likely weigh on the markets.

I also have serious doubts about Citigroup’s profitability, but even if they are, I don’t think it means much in light of the billions of government dollars they’ve received over recent months.

All in all, this has been a great week for traders, but I doubt it signifies a broader sea change in the markets.

But, as I’ve said repeatedly both here and Louis Rukeyser’s Mutual Funds and Louis Rukeyser’s Wall Street, this is downturn is an excellent opportunity to get into the markets if you have a long term horizon. It’s also a great opportunity to get your kids started without sinking too much capital into the markets.

With that in mind, here’s an article we ran back in October highlighting the Monetta Young Investors Fund. At the time, the fund was outperforming the S&P 500 though it was lagging its large growth category, which still holds true. One reason for that is the fact that only about two-third of the portfolio is actively managed, with the remaining third primarily held in index funds. So while this shouldn’t form the core of an established investor’s holdings, it’s a great option for a minor’s account.

“Of course, there’s no sure-fire method for defeating market downturns, but getting a head-start on investing will help you weather periodic bumps in the road over the long haul. People in the younger demographic often don’t know where—or how—to get started, and they feel as if investing at their age doesn’t matter. The truth is, saving and investing is imperative, regardless of your age.

“It’s never too early to start investing.” That’s the mantra held by Robert Bacarella, fund manager of the Monetta Young Investor Fund, a kids-themed mutual fund that motivates young investors to follow the road to profits.

With the fate of Social Security up in the air, the sooner you start socking money away for retirement, the better off your financial future will be in the long run. That’s why Monetta created this fund. Encouraging your kids to start saving while they’re still young and adopt a healthy savings plan that will grow their financial know-how enables them to develop strong financial habits that will last a lifetime.

The challenge for many financial companies is to find a different approach to working with a younger audience than that of older generations to cater to their specific interests and needs. Monetta has done just that by creating online programs in which children can take an active role.

“Children prefer Internet-based interactivity because it’s more convenience and straight-forward than traditional methods of investment education,” said Bacarella. And because younger generations are more tech-savvy these days, Bacarella uses the Internet as an effective, “easy-in, easy-out” teaching tool. Not only are these tools informative, they’re also fun and entertaining. 

The key to this fund is teaching kids the power of compounding: The sooner you start investing, the more time your money has to grow. Monetta achieves this through its financial literacy program, which starts with an age-based financial kit—complete with an age-appropriate quarterly newsletter and a Young Investor Fund (YiF) certificate, educational games and interactive activities online to encourage children’s participation.

The financial kits are separated into the following four categories and are based on a child’s age upon opening the account: ages 0-2, ages 3-7, ages 8-12 and ages 13 and up. The ages 0-2 kit includes a piggy bank, encouraging children to “save their pennies.” All of the other age-based kits include an activity book, which is full of investment-related crossword puzzles, code breakers, word searches and quizzes as well as definitions of key investing terms.

In addition, the ages 3-7 kit includes coloring books, crayons and a 16-song CD that consists of investing-related tunes. The ages 8-12 kit includes a coin-collecting book and a 10-page money book, which details the ABCs of investing. And the ages 13 and up kit includes a YiF baseball hat and a 24-chapter Monetta investment tutorial, which outlines the entire investment process.

The fund’s minimum investment is fairly low at $1,000. Investors who don’t want to start with a lump sum can open an account for $250 by establishing an automatic investment plan (AIP) of $25 per month. 

Half of the fund invests in the SPDR Index and the remaining half is made up of retail and consumer discretionary stocks of companies familiar to a younger demographic that also focus on long-term growth. Among its top holdings are The Walt Disney Company, Google, McDonald’s Corp, Apple, Nike and Amazon.com.

Although the overall performance of the fund has lagged of late, it’s still outperforming the S&P 500. Bacarella recently saw a baby bounce in consumer discretionary stocks, perhaps a sign that the sector is beginning to improve amid seasonal and back-to-school sales.

The biggest question for Bacarella has been, “Where’s the link between the age groups?” The answer lies in the fact that this demographic represents the future. And the first step in preparing for the future is education.

In conjunction with SAGE scholars, an education funding and information provider specializing in college savings and tuition planning, Monetta has developed a tuition rewards program where more than 200 colleges and universities nationwide participate. If you’re interested in saving for college, sign up at www.tuitionrewards.com to receive $500 tuition rewards, equivalent to $500.

Rewards accumulate semi-annually, similar to frequent flier miles. The tuition rewards can pay up to one year of college tuition at participating colleges—up to $20,000—either applied evenly over a four-year undergraduate education, reducing the student’s tuition by $5,000 per year, or in one lump sum. Note that this program is separate from the fund itself; no investment is required for participation.

It’s important to remember that consumer discretionary stocks come with plenty of risk, so investing in the Monetta Young Investors Fund may not transform your child into the next Warren Buffett. But it is the first step in teaching the next generation how to secure a prosperous future by providing “little bits of communication to peak kids’ interest in the investment world.”

Speaking Engagements

Make plans to join Roger, Elliott, Gregg Early and Benjamin Shepherd at the 18th Atlanta Investment Conference. Sponsored by Friends for Autism, the conference is held in a mountain setting north of Atlanta from Thursday, April 23, to Saturday, April 25.

Roger, a steady hand through many market events such as the one we’re dealing with now, will talk about Canadian income and royalty trusts as well as his new service focused on exploiting the greatest spending boom in history, New World 3.0.

Elliott will detail the new direction for Personal Finance and provide insight into his approach to stock selection and portfolio management. What’s required now amid these difficult times are clarity and focus, qualities Elliott has demonstrated in these pages and through The Energy Strategist for years.

Gregg, a constant at PF for nearly two decades, will be there to address recent developments with the publication. He’ll also discuss the Smart Grid, an endeavor he’s exploring as part of his role with New World 3.0.

Ben, editor of Louis Rukeyser’s Mutual Funds and Louis Rukeyser’s Wall Street, the in-house mutual fund expert, will discuss efficient, cost effective ways to simplify the investing process.

Be sure to bring your questions. These guys love to talk markets and everything that impacts them.

Attendance is limited to 175 of the most enlightened, savvy individual investors. Go to http://www.aicatchota.com/?kloc=NONE&kloc=NONE for more information. Meals are included for the Friday Market Wrapup discounted price of $459 for a single and $599 for couples. Call 770-952-7861 or e-mail altinvestconf@mindspring.com to register.