Since I started making prognostications in 1996, about five calls in seven have hit the target, with one forecast being a bit too early and one being just plain wrong.

Here are some stories likely to be written in the new year:

1.

A new system for benchmarking life-cycle funds . . . or outrage over performance.

Target-date funds and life-cycle funds were approved in 2007 as "default choices" for retirement plans that sign up all workers who do not actively opt out of the program. Between the ease of a perceived all-in-one option and the importance of offering default choices, virtually every large fund company has created funds with a maturity date or based on an investor's age.

Unfortunately, the fund-rating firms do a lousy job analyzing these funds, typically lumping them in with "asset allocation" funds and measuring them against standard market benchmarks.

Investors in these funds are much less concerned with the broad market than they are about being on the path toward reaching their goals. Since there is a wide range of performance in these categories, one of two things is likely to happen: Either investors will find out that the lousy target-date funds are laggards by any measure and not worth owning, or the ratings firms will find ways to better benchmark performance, so a consumer has a good idea if the fund can actually meet expectations.

2.

A slew of class-action lawsuits against funds burned by subprime problems.

With funds like Regions Morgan Keegan Intermediate Bond and High Income, there is little doubt that the plaintiff's bar has potential cases to talk about. Those funds were each hurt in their own way by investments made in subprime mortgages. In the case of the RMK funds, the fallout was disastrous, amounting to losses surpassing 45 percent. Even in cases like Fidelity Ultra Short - down about 5 percent this year - lawyers will say the fund should not have lost money stretching out of its comfort zone in an effort to get additional yield.

3.

More fund blowups due to subprime investments and the mortgage crisis.

When a fund gets into trouble on illiquid paper, it has a bit of leeway in reporting the trouble. Specifically, management is often involved in setting the value of its securities, and may hang on to hope that bad, thinly traded paper will retain its value. Eventually, however, bad notes get properly valued.

While most observers believe the fund industry has done a good job of airing its dirty laundry, clearly there is more to come out in the wash. The losses in the latecomers will overshadow problems like those of the RMK funds.

4.

The closure of dozens - if not hundreds - of relatively new exchange-traded funds.

Exchange-traded funds are created virtually every day, but a lot of them are based on thin, implausible investment premises, and have failed to gain traction with investors. While the trend of new issues will continue, the backers will start pulling the plug on things that the investing public has ignored.

5.

Prospectus reform that still doesn't help consumers.

The Securities and Exchange Commission is pushing for new prospectuses, and it appears poised to push them through, but the proposals are not such a radical change that the average investor will actually start reading the dumb things, let alone understanding them.

6.

Mutual fund tax reform, a popular idea in an election year, getting no new love from Congress.

Reasonable mutual fund tax-reform proposals have drawn bipartisan support from dozens of lawmakers. A year ago, I said that they would stall in '07 and that the best hope was that they would become an election-year enticement in '08.

Not going to happen. The legislation was not just stalled in Congress, it was virtually ignored. Because it has not gotten a whiff of support in the early presidential discussions, it is dead before '08 arrives.

7.

The SEC gives up.

The SEC has proposed some good reforms, but has backtracked from ideas like the independent board chairman and more. The agency may have good intentions, but the best it's going to show fund investors in '08 is that new prospectus (yawn). It will take concern over some sort of scandal for the reform process to be reinvigorated (and luckily, I don't see that happening in 2008).

8.

Board takes a fund away from management.

At some point this year, there will be a story about a fund board getting the backbone to pull a fund from its current lackluster management and replacing it with something better. It does not happen often, but there were some tremors in 2007 that may have helped independent directors grow some backbone they can put to work in '08.