Fidelity Select Fundranker

Fundranker Blog—May 2010 Archive

Correction Recovery?

Fundranker’s Top Eight Model Portfolio, the S&P 500 Index (as measured by Fidelity’s Spartan 500 Index - Investor Class Fund), and the Nasdaq Composite Index (as measured by Fidelity’s Nasdaq Composite Index Fund) were still in correction as of May 28, with losses of 10.1%, 10.3%, and 10.7%, respectively, but in the six trading days between their May 20 correction lows and the end of May, they managed to gain 3.5%, 1.7%, and 2.4%, respectively, which is a good start in overcoming this recent setback.

The American Association of Individual Investors reported on May 27 that nearly 51% of investors were bearish about the market over the next six months in their latest weekly survey, a rise of 17% from the previous survey. Intuitively, this may seem like bad news for the market, but investor confidence traditionally has been a contrarian indicator, so this drop from dangerously high investor confidence is actually another good indicator for this bull market to continue its run.

Posted 5/29/10 9:45pm ET in Fundranker, Market | Permalink | Comments (0)

Correction Hits Market

With its plunge on May 20, the market finished wiping out its 2010 gains and sent major indexes into correction territory. As of May 20, the S&P 500 Index (as measured by Fidelity’s Spartan 500 Index - Investor Class Fund) and the Nasdaq Composite Index (as measured by Fidelity’s Nasdaq Composite Index Fund) fell 11.8% and 12.8%, respectively, from their recent bull market highs on Apil 23. Fundranker’s Top Eight Model Portfolio fell 13.2% over the same time period.

Much of the volatility in the market during the last week of trading in April and all of May so far can be attributed to investor concern about the European debt crisis and the possibility it could derail world-wide economic recovery from the Great Recession. For an alternate viewpoint, however, check out Tim Duy’s article about how the European debt crisis could be a net positive for the U.S.

Posted 5/21/10 1:02pm ET in Fundranker, Market | Permalink | Comments (0)

Fundranker Upturns May 2010 Update

Fundranker’s Top Eight Model Portfolio extended its latest multi-month gain in April, 2010. The table below shows Fundranker’s multi-month gains and compares them to returns of the Nasdaq Composite Index (as measured by Fidelity’s Nasdaq Composite Index Fund) and the S&P 500 Index (as measured by Fidelity’s Spartan 500 Index - Investor Class Fund) over the same time periods. Since we didn’t start tracking the Nasdaq Composite Index 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/Sep 2009     7 42.376  54.521  45.835 
Nov/Dec 2009     2 10.099  11.240  8.041 
Feb/Apr 2010     3 19.803  14.838  11.021 

With its current three-month upturn, Fundranker has risen 12 of the last 14 months from its March 9, 2009, low. Through May 12, Fundranker was near to breaking even; perhaps it will extend its bull market run and this latest multi-month upturn still another month.

Over all the upturns, Fundranker now has an average gain of 21.562%; the S&P 500 Index gained only 11.771% on average. Over the 13 upturns during which we tracked the Nasdaq Composite Index, Fundranker now has an average gain of 16.769%; the Nasdaq Composite gained only 13.553% on average. See our Fundranker Upturns April 2010 Update post for earlier information.

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 5/13/10 9:59am ET in Fundranker, Market | Permalink | Comments (0)

Greek and European Debt

Greek and European debt weighed heavily on world markets during the first trading week of May. Many financial observers feared that Greece's financial situation could spread to other European nations, possibly setting in motion an even more widely spread downturn in world economies.

European Union nations are tied together with their common currency, the euro, which limits individual members solutions to debt problems, such as Greece’s current situation. Normally, a country would be able to devalue its currency to ease debt problems, but Greece is unable to do that unilaterally.

Paul Krugman, New York Times columnist and winner of the Nobel prize for economics, has a great blog entry today about Greece’s situation and weekend announcments from European Union ministers and the European Central Bank.

World markets have reacted strongly and positively to those announcements in today’s trading. The Nasdaq Composite and the S&P 500 Indexes were up 100 and 45 points, respectively, at 10am today, May 10.

Posted 5/10/10 10:37am ET in Economy, Market | Permalink | Comments (0)

Economy Continues to Grow

The U.S. economy expanded for the third consecutive quarter in the first quarter of 2010. Gross domestic product grew 3.2%. In the third and fourth quarters of 2009, GDP grew 2.2% and 5.6%.

Consumer spending increased significantly, growing at an annual rate of 3.6%, the strongest growth in three years. Consumer spending grew at an annual rate of only 1.6% last quarter.

Businesses must be seeing a more rosy economic future, as well. Their purchases of capital goods increased 13.4% in the first quarter, adding to a 19% increase last quarter. Even more telling, for the first time in two years, businesses increased their goods inventories during the first quarter.

Jobless claims have fallen for two consecutive weeks. Although the recovery has been labeled as “jobless” so far, perhaps this situation is beginning to change.

Posted 5/4/10 9:32am ET in Economy | Permalink | Comments (0)