Angler,
Having been in the sector funds for a little more that five years now, I can share my experiences for what they're worth.
By the way, I put about $25K in to start, and it's grown to well over $50K. I can only imagine where it would have been without my expensive lessons. So here goes ...
1. Don't switch too often, and never pay the 0.75% for switching more the every 30 days. Never, ever pay the 3% load after your initial entry (no in and out).
2. Don't forget number 1.
3. If you look at the price of one of your sectors and say, "These prices are way high", it might be time to switch. Don't get overly complacent.
4. Don't forget number 1.
5. Never chase a high flyer. If you want to move it should be from a high flyer to a undervalued sector, never the other way. Think long term.
6. Don't forget number 1.
Finally, in my opinion, the only way to play these sector funds is to look out five years and try to figure what will be the trends. Be a futurist. If we go back five years: technology, telecomm, developing comms, biotech, electronics, software and leisure should have been no-brainers. Hmmm ... come to think of it, these are the same as I would pick for the next five. I wonder ...
Best of Luck
Larry |
