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Strategies & Market Trends : Fidelity Select Sector funds -- Ignore unavailable to you. Want to Upgrade?

To: Francis Muir who wrote (2743)	7/6/2000 11:31:52 AM
From: selectinvestor	Respond to of 4916

There are many mutual funds that are excellent choices for a buy and hold investment strategy and FDEGX is one of them. Our expertise is the Fidelity Select funds and our goal is to provide trading strategies that the individual investor can follow to put the power of sector investing to work in their portfolios in a manner consistent with their goals and risk tolerance. As any reader of this list knows, sector funds provide an enormous opportunity for profit. But, as most sector investors know, realizing this opportunity in your own portfolio can be very difficult. I have spoken with many investors who understand the logic of sector investing, but do not want to trade frequently. For these investors I have developed a very novel buy and hold sector fund strategy. Our new Buy & Hold Portfolio will be structured like a bond ladder : each year, in November, we will buy three Select sector funds. These funds will be held for five years. So, after five years you will have five portfolios - of three fund positions each - that are held for five years. After a position has been held for five years it is sold and reinvested in the next group of three funds and they are then held for five years. So, when it is fully invested, the portfolio will be diversified across the sectors ( having fifteen positions in, say, 8 to 12 Select funds ) and it will be diversified over time, with one fifth of the portfolio reinvested according to the prevailing historical trends each year. Thus, an individual investor will be able to tap the power of sector investing while only trading twice a year - we buy in November and sell in April. I believe that this strategy will deliver robust returns over time, but it is a relatively complex strategy to explain and I am very interested to hear what the members of the list think about it. Your input is greatly appreciated. Russell Cox selectinvestor.com