Larry -- There is absolutely nothing wrong with committing funds to a specific sector for a long period of time, if you believe that the fundamentals of the industry warrant such an investment. Longer term, the energy services area looks extremely good, of course, although there is still no way to quantify the short or longer term impact of the economic downturns across Asia on future exploration. Such a strategy, however, requires you to sit through all of the fund's ups and downs along the way, where periodically switching in and out, of even such a strong sector as FSESX, can certainly be justified. The choice, of course, is an individual one that must be made by the investor him or herself.
The energy fund, on the other hand, has never held much appeal for me, either in terms of industry fundamentals or the types of investment returns it has or may provide. A potentially better buy-and-hold sector that you might want to consider is the Food & Agriculture fund. It is the only Select that has never had a down year, it has beaten the S & P 500 is every year since 1988, and its beta of approximately .7 makes it an excellent provider of strong risk adjusted returns.
Have a terrific New Year.
Bernie Kaplan |
