Fidelity Select Fundranker

Fundranker Blog—June 2009 Archive

FNINX, FSPFX Close Permanently

Fidelity’s Select Networking & Infrastructure and Select Paper & Forest Products closed permanently on June 19, 2009. As of that date, Select Networking & Infrastructure was merged into Select Communications Equipment (FSDCX), while Select Paper & Forest Products was merged into Select Materials (FSDPX), both of which are in the Fundranker’s Top Eight Model Portfolio this month. Shareholders of the two closed funds were issued equivalent shares of Select Communications Equipment and Select Materials.

Select Communications Equipment is doing well so far in June, and it looks like it will remain in the Top Eight Model Portfolio for July. Select Materials has fallen out of the Top Eight Model Portfolio and most likely will be exchanged in July.

We will be updating the Fundranker website soon to reflect this change in Fidelity’s Select Fund offerings.

Posted 6/25/09 10:00am ET in Fidelity Investments, Fundranker | Permalink | Comments (0)

Rally Falters

The spring rally faltered during the week that ended June 19, the last week of spring, and started summer with a precipitous drop on June 22. Is the rally taking a temporary breather, or are we seeing a more determined correction to the three-month runup we have enjoyed? The Conference Board’s Index of Leading Economic Indicators, which rose in both April and May, shows that the recession is losing steam. Economists predict a gradual recovery beginning later in 2009, so it’s more likely we’re seeing a temporary and healthy hesitation in a continuing market upturn.

The Nasdaq Composite (as measured by Fidelity’s Nasdaq Composite Index Fund), the S&P 500 (as measured by Fidelity’s Spartan 500 Index Fund), and Fundranker’s Top Eight Model Portfolio fell 1.7%, 2.6%, and 4.5%, respectively, for the week that ended June 19. As of June 22, the Nasdaq Composite, the S&P 500, and Fundranker have gained 39.4%, 33.0%, and 20.6%, respectively, from their March 9 lows and are 7.3% higher, 3.2% lower, and 7.9% lower, respectively, than their January 6 highs.

Posted 6/23/09 10:42am ET in Economy, Fundranker, Market | Permalink | Comments (0)

DJIA Changes

The Dow Jones Industrial Average, made up of 30 U.S. industrial stocks chosen by the managing editor of the Wall Street Journal, changed last week. As of Monday, June 8, General Motors Corp., which declared bankruptcy on June 1, and Citigroup Inc. were removed from the average. Travelers Companies Inc. replaced Citigroup and Cisco Systems Inc. replaced General Motors.

General Motors had to be replaced because a company in bankruptcy is on a different playing field than competitive businesses, and it can no longer contribute to an index that tries to reflect the market as a whole. Although Citigroup is not in bankruptcy, it also was replaced because it is headed into a period of significant restructuring, and the Wall Street Journal felt its stock would reflect that process more than it would the banking sector.

The decision on which companies should replace General Motors and Citigroup was tied to the last time a DJIA component was changed. AIG was replaced by Kraft Foods last September, so Travelers Companies was chosen to renew an insurance presence in the DJIA. Also because of the earlier addition of Kraft Foods, the Wall Street Journal did not need another consumer goods company to replace General Motors. They chose Cisco Systems because they felt its products were relevant to economic and cultural adjustment to the digital age, much as automobiles influenced economic and social changes in the 20th century.

Posted 6/16/09 9:41am ET in Economy, Market | Permalink | Comments (0)

Rally Still Going

The spring rally continues to advance and now has lasted 14 weeks. The Nasdaq Composite (as measured by Fidelity’s Nasdaq Composite Index Fund), the S&P 500 (as measured by Fidelity’s Spartan 500 Index Fund), and Fundranker’s Top Eight Model Portfolio all hit new rally highs on Thursday, June 11, and closed Friday, June 12, with gains of 46.7%, 40.8%, and 32.9%, respectively, over their March 9 lows. As of June 12, the Nasdaq Composite, the S&P 500, and Fundranker are 12.9%, 2.5%, and 1.5% higher, respectively, than their January 6 highs.

Posted 6/15/09 10:31am ET in Fundranker, Market | Permalink | Comments (0)

Wall of Worry

It’s said that bull markets like to climb a wall of worry. Although investor and consumer sentiment gauges have risen lately, they are still low by historical standards. Recent unemployment, manufacturing, retail, and other economic data paint varying pictures of the economy, some positive, some negative. Banks are raising capital and want to return TARP money to the government, but General Moters and Chrysler are both in bankruptcy and face major restructuring to remain viable businesses. So is there enough worry to propel this rally further? Shall we worry even about the amount of worry? Do we dare call this rally a fledging bull market?

Posted 6/9/09 10:02am ET in Economy, Market | Permalink | Comments (0)

Rally Update

The spring rally powered the market to new highs again this week, although the S&P 500 and the Nasdaq Composite Indexes were off slighty today, June 5, 2009. As of today’s close, Fundranker’s Top Eight Model Portfolio, the S&P 500 (as measured by Fidelity’s Spartan 500 Index Fund), and the Nasdaq Composite (as measured by Fidelity’s Nasdaq Composite Index Fund) have gained 31.68%, 39.83%, and 45.99%, respectively, since their March 9 lows. As of June 5, the Nasdaq Composite is over 12% higher, the S&P 500 is nearly 2% higher, and Fundranker is nearly 1% higher than their January 6 highs.

Posted 6/5/09 11:26pm ET in Fundranker, Market | Permalink | Comments (0)

Fundranker Upturns

The market upturn since March 9 lows prompts a look at how Fundranker has performed when it has risen for multiple, consecutive months. The table below shows Fundranker’s gains and compares them to returns of the Nasdaq Composite (as measured by Fidelity Nasdaq Composite Index Fund) and the S&P 500 (as measured by the Fidelity Spartan 500 Index Fund) over the same time periods. Since we didn’t start tracking the Nasdaq Composite until October, 2003, its returns are shown starting in 2004:

      FSF Nasdaq S&P 500
     Period Months Return  Return   Return
Apr/Jul 1997     4 30.508    26.737 
Nov/Dec 1997     2 3.682    6.342 
Feb/Apr 1998     3 16.283    13.686 
Sep/Jan 1999     5 57.092    34.423 
Mar/Apr 1999     2 12.267    8.028 
Oct/Feb 2000     5 79.523    6.960 
Apr/May 2001     2 5.270    8.454 
Nov/May 2002     7 24.740    1.461 
Apr/Aug 2003     5 27.002    19.657 
Oct/Feb 2004     5 22.058  13.227  15.740 
May/Jun 2004     2 5.001  6.771  3.309 
Sep/Dec 2004     4 15.808  18.259  10.379 
May/Sep 2005     5 26.361  12.312  7.029 
Nov/Jan 2006     3 22.953  8.880  6.555 
Mar/Apr 2006     2 8.780  1.820  13.073 
Nov/Jan 2007     3 7.126  13.073  11.059 
Mar/Jun 2007     4 9.584  7.986  7.446 
Aug/Oct 2007     3 14.491  12.500  6.942 
Apr/Jun 2008     3 13.553  0.761  (2.739)
Mar/May 2009     3 18.245  28.986  25.876 

If you look at our recent post about Fundranker Downturns, you’ll notice that Fundranker has had significantly more multiple-month upturns than downturns and that the upturns tend to last longer than the downturns, as well. Over all the upturns, Fundranker had an average gain of 21.016%, while the S&P 500 gained only 10.997% on average. Over the 11 upturns during which we tracked the Nasdaq Composite, Fundranker had an average gain of 14.905%, while the Nasdaq Composite gained only 11.325% on average.

Although past results are never an assurance of future performance, it’s still great to know that Fundranker regularly outperforms the Nasdaq Composite and S&P 500 indexes.

Posted 6/4/09 11:45am ET in Fundranker, Market | Permalink | Comments (0)

Fundranker Downturns

Through June, 2008, the Fundranker system bucked the bear market trend that started November, 2007, but in the frantic market downturn during the last half of 2008 and January and February of 2009, it gave back those gains and then some. Fundranker has had multiple-month downturns only 15 times since 1997, when historical tracking of the Top Eight Model Portfolio began. Here are Fundranker’s losses during those downturns along with its returns during the next 3 months, 6 months, and 12 months:

       Next 3  Next 6 Next 12
     Period Months    Loss Months Months Months
Feb/Mar 1997     2 (10.478) 17.993  37.309  49.620 
Jul/Aug 1998     2 (18.332) 24.203  46.650  83.587 
Mar/May 2000     3 (14.633) 20.863  7.140  9.806 
Sep/Nov 2000     3 (11.354) 0.224  2.488  (5.267)
Jan/Mar 2001     3 (9.739) 3.670  (7.140) 12.227 
Aug/Oct 2001     3 (12.200) 13.141  23.520  (1.727)
Jun/Jul 2002     2 (15.637) (6.615) (4.395) 7.475 
Sep/Oct 2002     2 (8.563) 2.377  (4.461) 33.218 
Dec/Mar 2003     4 (7.317) 15.114  23.719  45.021 
Mar/Apr 2004     2 (10.145) 1.538  8.246  16.784 
Jul/Aug 2004     2 (3.678) 14.696  24.092  40.048 
Mar/Apr 2005     2 (6.949) 17.081  20.887  50.482 
Jul/Aug 2006     2 (3.256) 4.659  5.865  16.990 
Jul/Nov 2008     5 (46.834) (9.347) 7.189 
Jan/Feb 2009     2 (16.832) 18.245 

The five-month downturn that began in July, 2008, was the first multiple-month downturn Fundranker had had for two years, and it is by far the worst and longest that Fundranker has suffered. As the worst recession since the Great Depression continued, Fundranker added another two-month downturn in January and February, 2009, and it was nearly as bad as the previous worst multiple-month downturn, July through August, 1998, when Fundranker fell over 18% but gained over 83% during the next 12 months. During the last big bear market, Fundranker had three multiple-month downturns over the ten-month period from June, 2002, through March, 2003, but it gained 45% in the next 12 months.

Although past results are never an assurance of future performance, you still can benefit from knowing that Fundranker almost always has gone on to better performance in the months that follow a multiple-month downturn. Let this knowledge boost your confidence in Fundranker. Stay disciplined, and stick with the Fundranker system.

Posted 6/3/09 9:31pm ET in Fundranker | Permalink | Comments (0)

Fundranker Goes Positive

The first day of June was a good one for the markets and an even better one for Fundranker’s Top Eight Model Portfolio. As of June 1, Fundranker’s Top Eight Model Portfolio is in the black for 2009, with a YTD gain of 2.232%. It also finally surpassed its previous high, reached on January 6, by a fraction of a percent. Take a look at our daily chart for June.

Posted 6/2/09 9:08am ET in Fundranker | Permalink | Comments (0)

Rally Continues

The spring rally had nine straight weeks of new highs, fell during the week ended May 15, 2009, and rose (but not to a new high) for the week ended May 22. The Nasdaq Composite made a new rally high as of May 29, and the S&P 500 nearly did. Fundranker’s Top Eight Model Portfolio, the S&P 500 (as measured by Fidelity’s Spartan 500 Index Fund), and the Nasdaq Composite (as measured by Fidelity’s Nasdaq Composite Index Fund) have gained 26.17%, 36.63%, and 40.04%, respectively, since their recent March 9 lows. As of May 29, the Nasdaq Composite is nearly 8% higher than its January 6 high, the S&P 500 is within 1% percent of its January 6 high, and Fundranker is within 4% of its January 6 high.

The stock market shot up in the last half hour on Friday, May 29, and, despite continuing financial turbulance, such as General Motors declaring bankruptcy this morning, June 1, stock market futures are indicating that surge may continue today. It seems that this rally has staying power. Maybe it truly is an advance indicator that the economy is beginning to recover. See our Spring Rally post for earlier information on this rally.

Posted 6/1/09 9:30am ET in Economy, Fundranker, Market | Permalink | Comments (0)