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I have a 403(b)(7) retirement account through my workplace which receives contributions twice a month through automatic payroll deduction. After reading the MF Investment Guide this past year, I decided to make some changes.

Currently, the contributions are split 50/50 and go into a Growth Fund and an International Equity Fund. I definitely want to drop the International exposure. My understanding is the only option available to me through this Merrill Lynch 403(b) is mutual funds.

That being the case, I'd ideally like to go with an index fund to lower my expenses. But the adviser mentioned a set of Defined Asset Funds, one of which is a Dow 10 Highest Yields strategy which I learned about in the MF Investment Guide. The expenses are higher than a straight index fund, but, he says, I'd be better protected during a market downturn than in an index fund.

My question: Am I right in thinking that twice monthly contributions defeat one of the main purposes of the Beating the Dow strategies (including the Almighty Foolish Four!), which is to cut down on transaction costs? The 10 highest yielders on January 31st might not be the same on March 15th or August 31st, etc.
Am I missing something or does a Beat the Dow strategy sound reasonable when coupled with 24 separate contributions throughout the year? Anything else I should be considering that I haven't mentioned?

Thanks for your help.
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