One Year

At the depths of the Great Recession, when the market reached 12-year lows on March 9, 2009, despair seemed to be overwhelming. Then a market rally started, and hope returned, or maybe it was the other way around. Despite many calls for the market to test new lows, it never really did. You can see from the chart below that the market did turn down significantly three times over the last year, but always recovered.

As of March 9, 2010, the Nasdaq Composite Index (as measured by Fidelity’s Nasdaq Composite Index Fund) reached a new high for the year-long bull market, while the S&P 500 Index (as measured by Fidelity’s Spartan 500 Index - Investor Class Fund) and Fundranker’s Top Eight Model Portfolio were tantalizingly close to highs they reached in January.

After Fundranker, the S&P 500, and the Nasdaq Composite fell 54.1%, 54.9%, and 55.1%, respectively, during the bear market that lasted from November 1, 2007, through March 9, 2009, they gained 61.5%, 72.8%, and 85.7%, respectively, during the year which ended March 9, 2010:

Posted 3/10/10 10:02am ET in Fundranker, Market | Permalink | Comments (0)

Unrelated Dependent

Are you working long hours, possibly more than one job, and supporting your significant other while she’s out of work? Is your unemployed college buddy mooching off you during a long and unsuccessful job hunt? Have you taken in your daughter’s soccer team buddy because her home life wasn’t working? It’s not obvious, and it may surprise you, but you may be able to claim an unrelated person as a dependent on your 2009 federal tax return.

There are several tests to determine whether an unrelated person is your dependent. If you and your potential dependent pass all of these tests, get ready to save a bundle on your taxes:

Is your potential dependent a qualifying relative? It’s easy to jump to the conclusion that she isn’t a qualifying relative, because, well, she’s not related to you in any form or fashion. Take a close look at the IRA definition of a qualifying relative, however, and you’ll see that it includes, in addition to various real relatives, any other person who lived with you all year as a member of your household if your relationship did not violate local law. Note that the 2009 Form 1040 instructions list some exceptions that still count as living with you, such as going to school or on vacation. So if your potential dependent lived with you for all of 2009, and your relationship did not violate local law, you pass this test.

Is your potential dependent a qualifying child of any taxpayer for 2009? Because she is not related to you, she’s not your qualifying child, and if she lived with you the entire year, then she can’t be a qualifying child of anybody else, either. You easily pass this test.

Did your potential dependent have gross income of less than $3,650 in 2009? If so, you pass this test.

Did you provide over half of your potential dependent’s support in 2009? Well, does she have some other means of support? Is the support you provide more than her other means of support? If so, you pass this test.

Was your potential dependent a U.S. citizen, a U.S. national, a U.S. resident alien, or a resident of Canada or Mexico? If so, you pass this test.

Was your potential dependent married? If not, you pass this test.

Can you yourself be claimed as a dependent on someone else’s 2009 tax return? If you are providing have of your potential dependent’s support, it’s unlikely someone else is providing half of your support. You should pass this test easily.

So if you pass the above tests, just how much can you save on your taxes? An additional dependent allows you an extra exemption, which, for 2009, shaves $3,650 off your taxable income. If you are in the 25% tax bracket, that amounts to tax savings of over $900. If you also are paying education expenses for your unrelated dependent, you can save big with an education tax credit. To top it off, you probably will save money on your state income tax, as well.

Posted 3/7/10 11:21am ET in Tax Tips | Permalink | Comments (0)

2009 Qualified Dividends

Fidelity shows qualified dividends paid on funds in a taxable account at www.fidelity.com and on 2009 Form 1099-DIV. These dividends are from companies the funds held for the required holding periods to qualify as qualified dividends. In addition to meeting the holding period within the fund, however, you also have to hold your fund shares for the required holding period for your dividends to be qualified. To pass the qualified dividend holding period test, you must hold your fund shares for a period of at least 61 days, which can precede, straddle, or follow the ex-date of the dividend.

Fidelity paid dividends on several funds in Fundranker’s Top Eight Model Portfolio in April and December, 2009. Here is a list of those dividends, ex-dates, days Fundranker held shares in the funds, and whether those days pass the qualified dividends holding test:

Assuming you bought and sold the above funds on Fundranker exchange dates, the bottom line here is that you should claim dividends that Fidelity reports as qualified for Gold, Materials, Pharmaceuticals, and Telecommunications as qualified dividends, but not those that Fidelity reports as qualified for Chemicals, Electronics, or Multimedia.

If you bought and sold the above funds on dates other than Fundranker exchange dates, or if you held, in a taxable account, other Fidelity funds which paid qualified dividends, you’ll need to calculate your own holding periods to determine whether the dividends Fidelity reports as qualified are truly qualified.

Posted 3/03/10 11:20am ET in Fidelity Investments, Fundranker, Tax Tips | Permalink | Comments (0)

S&P 500 Tracking Portfolio Change

For comparison purposes, Fidelity Select Fundranker tracks the S&P 500 Index (as measured by Fidelity’s Spartan 500 Index - Investor Class Fund) with a theoretical portfolio which we started on January 2, 1997, with a value of $24,000. We recently made a change to this theoretical portfolio because of a change at Fidelity Investments.

As of the close of trading on January 22, 2010, Fidelity Investments merged its Spartan 500 Index - Investor Class Fund (FSMKX) into its Spartan US Equity Fund (FUSEX). Beginning January 25, 2010, the newly merged fund retains the name Spartan 500 Index - Investor Class Fund but uses the FUSEX trading symbol. Because of this merger and use of the FUSEX symbol, as of January 22, 2010, we adjusted the number of shares we list for our S&P 500 Index theoretical tracking portfolio from 582.597 (of FSMKX, NAV $75.29 on 1/22/10) to 1,135.190 (equivalent shares of FUSEX, NAV $38.64 on 1/22/10). See our December 2009 and January 2010 results pages to review these changes.

Posted 2/19/10 8:59pm ET in Fundranker | Permalink | Comments (0)

Fundranker Gets Published!

Fundranker’s editor recently wrote three articles that will be published soon on the nationally known Free Money Finance blog: Education Tax Credits for 2009, Making Work Pay Tax Credit for 2009 and 2010, and Unrelated Dependent. The two tax credit articles will be published together in one post on Free Money Finance, and the Unrelated Dependent article will be published separately. Tune into Free Money Finance on February 3 and 6 to see these articles.

Posted 2/2/10 11:54am ET in Fundranker | Permalink | Comments (0)

Free E-File Fillable Forms for 2009

Many people hire professional tax preparers at tax time, but there still are plenty of us who feel very comfortable directly filling out tax forms ourselves and eschew using tax software as too cumbersome and as an unnecessary expense. For tax years up to 2008, we do-it-yourself taxpayers have had access to free fillable forms (PDFs) on the IRS website, but we were forced to print and mail the forms because there was no free e-file capability to go along with the free fillable forms.

For 2009 returns, for the first time, the IRS finally has combined free fillable forms with free e-file, and there are no income limits for qualification. Just go to www.irs.gov, click the Free File link in the right hand column, and then click the Choose Free File Fillable Forms button on the next page.

On the Free File Fillable Forms website, select a userid, password, and which form, 1040, 1040A, or 1040 EZ, you want to use. Then, in Step 1, Fill Out Your Tax Forms, fill out the fields on the various forms you need for your return. The fillable forms even have a Do the math button at the bottom, which, as you can guess, does the math for you, so you won’t make any math errors. Click the Instructions for this form button to review IRS instructions for any form. You can save your work and log back in later to complete your return, if necessary.

When you have completed your return, move on to step 2, E-File Your Tax Forms. Enter W-2, 1099, and W-2G information for any of those forms you received. Add your adjusted gross income from 2008, fill in last year’s PIN if you have one, select a new PIN for 2009, enter your date of birth and e-filing date, and choose whether (and when) to pay tax due by electronic withdrawal. Finally, click E-File Now, and you are done. You will receive your refund, if any, by check, or by direct deposit, if you entered direct deposit information on your return. If you owe tax and choose not to pay your tax due electronically, you will need to print Form 1040-V and mail it with your tax due.

Posted 1/21/10 11:15am ET in Tax Tips | Permalink | Comments (0)

Fundranker Upturns January 2010 Update

Fundranker’s Top Eight Model Portfolio added another multi-month gain in November and December, 2009. The table below shows Fundranker’s multi-month gains and compares them to returns of the Nasdaq Composite (as measured by Fidelity’s Nasdaq Composite Index Fund) and the S&P 500 (as measured by Fidelity’s 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:

Fundranker’s current two-month upturn culminated a nine-out-of-10-month upward run from March 9 lows for 2009. Fundranker is up again through January 14, so perhaps it will extend its rally run still another month.

Over all the upturns, Fundranker now has an average gain of 21.646%; the S&P 500 gained only 11.806% on average. Over the 12 upturns during which we tracked the Nasdaq Composite, Fundranker now has an average gain of 16.516%; the Nasdaq Composite gained only 13.446% on average. See our Fundranker Upturns October 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 1/14/10 3:23pm ET in Fundranker | Permalink | Comments (0)

Rally Report

What a difference ten months makes. When the market hit Great Recession lows on March 9, 2009, things couldn’t have looked much bleaker. Even as the market began to recover some of the immense losses of 2008 and early 2009, financial pundits kept calling for it to retest its lows, which still has not happened.

Indeed, the American Association of Individual Investors reported this week that 38% of surveyed members were bullish on the stock market in the short term, up from 19% in early March, but lower than the 51% reported last August, and significantly lower than the 58% level reached in the latter stages of the bull market in 2007. Considering these readings as a contrarian indicator suggests the market rally has room to run in 2010, as the bulls have not yet started to stampede.

As of December 31, 2009, the Nasdaq Composite Index (as measured by the Fidelity Nasdaq Composite Index Fund), the S&P 500 Index (as measured by the Fidelity Spartan 500 Index Fund), and the Top Eight Model Portfolio were up 79.8%, 67.8%, and 58.6%, respectively, from their March 9, 2009, lows.

Posted 1/2/10 12:54pm ET in Fundranker, Market | Permalink | Comments (0)

Four Years of Publication

With the December, 2009, issue, Fidelity Select Fundranker has completed its fourth year of publication. From January, 2006, through November, 2009, the Top Eight Model Portfolio lost 3.317%, while the S&P 500 Index, as tracked by Fidelity’s Spartan 500 Index Fund, and the Nasdaq Composite Index, as tracked by Fidelity Nasdaq Composite Index Fund, lost 4.685% and 0.214%, respectively.

From January, 2006 through June, 2008, when the Top Eight Model Portfolio made its all-time high, it gained 41.969%. From January, 2006, through February, 2009, shortly before its March 9, 2009, Great Recession low, the Top Eight Model Portfolio fell 31.579%.

In contrast, from January, 2006, through October, 2007, when the Nasdaq Composite and the S&P 500 Indexes made their all-time highs, they gained 30.893% and 28.218%, respectively. From January, 2006, through February, 2009, shortly before their March 9, 2009, Great Recession lows, the Nasdaq Composite and the S&P 500 Indexes fell 36.191% and 37.163%, respectively.

From March, 2009, through November, 2009, the Top Eight Model Portfolio gained 29.383%, while the Nasdaq Composite Index gained 40.869%, and the S&P 500 Index gained 39.447%.

Posted 12/3/09 7:25pm ET in Fundranker, Market | Permalink | Comments (0)

Great Recession

Many pundits are calling the recession that started in December, 2007, the Great Recession, which seems to capture succinctly what it has done to our economy--worse than other recessions, but not as bad as the Great Depression. We like this name, and we will refer to this recession as the Great Recession in future blog entries.

Posted 12/3/09 6:58pm ET in Economy | Permalink | Comments (0)

November Surge Renews 2009 Rally

As of Wednesday, November 11, the market rose seven of the eight trading sessions to that point in November, giving new life to the 2009 rally that began last March. On November 11, the S&P 500 Index (as measured by Spartan 500 Index Fund) closed at a new rally high, while the Nasdaq Composite Index (as measured by Fidelity Nasdaq Composite Index Fund) and Fundranker’s Top Eight Model Portfolio closed 0.4% and 3.3%, respectively, below their values on October 19, when recent rally highs were set.

From recent rally highs of October 19, through October 30, the S&P 500 Index fell 5.6%, the Nasdaq Composite Index fell 6.0%, and Fundranker’s Top Eight Model Portfolio fell 9.7%. You can see that a good portion of this late October downturn has been recouped in the early November surge.

To give some perspective to the rally the market has enjoyed since March 9, consider these numbers. From October 31, 2007, market highs through March 9, 2009, the S&P 500 Index fell 54.8%, the Nasdaq Composite Index fell 55.1%, and Fundranker’s Top Eight Model Portfolio fell 54.1%. To completely recover from March 9, 2009, lows to their October 31, 2007, values, the S&P 500 Index, the Nasdaq Composite Index, and Fundranker’s Top Eight Model Portfolio would have to gain 121.5%, 122.7%, and 117.9%, respectively. Well, since March 9, they have gained 64.8%, 71.3%, and 52.9%, respectively, which are fantastic gains for an eight-month period, but you can see they have a long way still to go.

Posted 11/11/09 9:15pm ET in Fundranker, Market | Permalink | Comments (0)

October Downturn

After hitting rally highs on October 19, the Nasdaq Composite and the S&P 500 Indexes turned down dramatically, falling seven of the last nine trading days of October. This downturn has not reached the point of calling it a correction, defined as a drop of 10%, but it did produce the first monthly loss for the market since this rally began in March. Several economic reports this week played into the downturn.

New home sales fell 3.6% in September, contrary to economists’ expectations of a seventh monthly increase in a row. Due to the coming November 30 expiration of the $8,000 first-time home buyer tax credit, potential home buyers may be rethinking their plans. Legislators are working now to renew the credit.

The Consumer Conference Board’s Consumer Confidence Index and the Reuters/University of Michigan Consumer Sentiment Index both declined in October, although the Nielsen Global Consumer Confidence Survey reported that their U.S. reading had risen since their last survey in July.

The only good news this week was that the GDP rose 3.5% in the third quarter, and it sparked a sizeable market rebound on Thursday, October 29.

However, the Labor Department reported Friday morning, October 30, that consumer spending fell and personal income was flat in September, which worried investors enough to undo Thursday’s rebound.

Even though the economy expanded in the third quarter, it is by no means out of the woods. Consumer spending is the mainstay of the U.S. economy and is directly affected by consumer sentiment, which in turn is affected by the current high unemployment rate, now at 9.8%, and which economists expect to continue to rise as high as 10.5% through the middle of next year. The recovery is likely to be weak and slow until the jobs picture brightens.

Remember though, that consumer sentiment is largely a trailing indicator, meaning that it reflects more on what has happened in the past than what will happen in the future, making it a favorite indicator for contrarian investors.

Posted 10/31/09 9:07am ET in Economy, Market | Permalink | Comments (0)

Fundranker Upturns October Update

Fundranker’s Top Eight Model Portfolio gained ground again in September, tying its seven-months-in-a-row record from May, 2002. The table below shows Fundranker’s multi-month 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:

Fundranker’s current seven-month upturn of 42.376% places third in the list by percentage gain. Fundranker is up again so far in October, so perhaps we'll get to add another month to this upturn to break our seven-month record.

Over all the upturns, Fundranker now has an average gain of 22.223%; the S&P 500 gained only 11.994% on average. Over the 11 upturns during which we tracked the Nasdaq Composite, Fundranker now has an average gain of 17.099%; the Nasdaq Composite gained only 13.646% on average. See our Fundranker Upturns September 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 10/23/09 2:43pm ET in Fundranker, Market | Permalink | Comments (0)

Average Monthly Returns

Fidelity Select Fundranker has monitored Nasdaq Composite Index performance (as measured by Fidelity Nasdaq Composite Index Fund) since October, 2003 and S&P 500 Index performance (as measured by Fidelity Spartan 500 Index Fund) since January, 1997. For October, 2003, through August, 2009, Fundranker’s Top Eight Model Portfolio and the Nasdaq Composite Index both had five months with negative average returns. For January, 1997, through August, 2009, Fundranker’s Top Eight Model Portfolio had only three months with negative average returns, while the S&P 500 Index had five months with negative average returns. Here’s a chart of average returns that compares Fundranker’s average monthly returns to those of the Nasdaq Composite Index over nearly six years from October, 2003, through August, 2009, and Fundranker’s average monthly returns to those of the S&P 500 Index over nearly 13 years from January, 1997, through August, 2009:

Fundranker outperformed the Nasdaq Composite Index for only four of 12 months, but its average monthly return over the nearly six-year period topped that of the Nasdaq Composite Index by a little. Fundranker outperformed the S&P 500 Index for eight of 12 months, and its average monthly return over the nearly 13-year period was significantly better that of the S&P 500 Index.

Posted 920/09 7:58pm ET in Fundranker, Market | Permalink | Comments (0)

September Surge

Yardeni Research reports that, going back to 1926, September is the only month with a negative average return. Well, September made an exception through the first half of the month this year; the market rose seven of 10 trading days through September 15. Over that time period, Fundranker's Top Eight Model Portfolio outperformed the Nasdaq Composite Index (as measured by Fidelity Nasdaq Composite Index Fund) and the S&P 500 Index (as measured by Fidelity Spartan 500 Index Fund):

Posted 9/16/09 10:23am ET in Fundranker, Market | Permalink | Comments (0)

Fundranker Upturns September Update

Fundranker’s Top Eight Model Portfolio has gone up another month since we last reviewed Fundranker’s upturns. The table below shows Fundranker’s multi-month 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:

Fundranker’s current upturn of six months is just one month short of our record upturn of seven months and places third in the list by percentage gain. Fundranker is up again so far in September, so perhaps we'll get to add another month to this upturn to match our seven-month record. September, a historically poor month for the stock market, has only been part of three previous Fundranker upturns.

Over all the upturns, Fundranker now has an average gain of 21.838%; the S&P 500 gained only 11.732% on average. Over the 11 upturns during which we tracked the Nasdaq Composite, Fundranker now has an average gain of 16.399%; the Nasdaq Composite gained only 12.899% on average. See our Fundranker Upturns August 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 9/10/09 8:25pm ET in Fundranker, Market | Permalink | Comments (0)

Rally vs. Bull Market

The rally that started from the market low reached on March 9, 2009, is still going strong. When does it become a bull market? The answer is subjective and hard to pin down, but it generally calls for a prolonged period of rising stock prices. This rally has lasted nearly six months, but that is rather short compared to previous well-known bull markets. On the other hand, the stock market has increased dramatically in the five plus months since March 9. As of August 24, 2009, the Nasdaq Composite Index (as measured by Fidelity’s Nasdaq Composite Index Fund), the S&P 500 Index (as measured by Fidelity’s Spartan 500 Index Fund), and Fundranker’s Top Eight Model Portfolio were up 59.5%, 53.3%, and 43.0%, respectively, since March 9.

There are several promising signs that this rally could continue. Consumer confidence rose more than expected in August, the housing sector is showing signs of improvement, the automotive sector just got a huge shot in the arm with the Cash for Clunkers program, unemployment dipped in July, and monthly job losses in July came in at 247,000, the fewest in a year.

Posted 8/25/09 3:39pm ET in Fundranker, Market | Permalink | Comments (0)

Fundranker Upturns August Update

Fundranker’s Top Eight Model Portfolio has gone up another couple of months since we last reviewed Fundranker’s upturns. 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:

Over all the upturns, Fundranker now has an average gain of 21.669%; the S&P 500 gained only 11.487% on average. Over the 11 upturns during which we tracked the Nasdaq Composite, Fundranker now has an average gain of 16.092%; the Nasdaq Composite gained only 11.487% on average. See our June post about Fundranker Upturns 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 8/15/09 11:25am ET in Fundranker, Market | Permalink | Comments (0)

Select Automotive Shines

Select Automotive is up 18.8% for July 1 though 24, 38.9% for May 1 through July 24 (nearly three months), and 131.8% for February 2 through July 24 (nearly six months). It is only down 5.6% for August 1, 2008, through July 24 (almost 12 months). Given that two of the three major American automakers were bailed out by the federal government earlier this year and also made speedy trips into and out of bankruptcy in the last few months, this incredible runup indicates a lot of investor confidence in the automotive sector. Investors must like the new direction American automakers are taking, and they must think that consumers are willing, able, and starting to buy cars again.

The American automotive industry is hugely intertwined in the American economy as well as the world economy. Consumers buy cars all over the world, automakers hire lots of people to build them, their suppliers hire lots of people to build various parts for the cars, and all those workers go out and spend the money they earn. It’s a self-feeding circle of economic improvement that can’t help but bode well for the economy.

Posted 7/24/09 11:01pm ET in Economy | Permalink | Comments (0)

Rally Resumes

The spring rally we enjoyed, after pausing for four weeks, has turned into a summer rally. The Nasdaq Composite climbed 11 sessions in a row through July 22, 2009, hitting new rally highs every day since July 15. The S&P 500 rose seven sessions in a row through July 21, hitting new rally highs on July 20 and 21. Fundranker nearly matched the Nasdaq Composite, climbing 10 sessions in a row through July 22, finally hitting a new rally high that day.

As of July 22, 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 are up 52.1%, 42.3%, and 35.2%, respectively, since the bear market lows of March 9.

Investors apparently are pleased with second quarter earnings and future outlooks companies have been reporting recently. Although economic indicators are mixed at best, the stock market seems to be fulfilling its roll as an advance indicator of economic recovery.

Posted 7/23/09 11:15am ET in Economy, Fundranker, Market | Permalink | Comments (0)

Rally Pauses Four Weeks

The spring rally we enjoyed has gone on pause the last four weeks. After hitting rally highs during the week ended June 12, 2009, the Nasdaq Composite and Fundranker fell three of the last four weeks, and the S&P 500 fell all four weeks. As of July 10, 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 are still up 38.6%, 31.0%, and 20.1%, respectively, for the rally since March 9, but they are down 5.5%, 7.0%, and 9.6%, respectively, since June 12.

Second quarter earnings season is upon us and quickly will tell us if and how much the economy and individual companies are beginning to recover from the recession. Given the past four weeks action in the stock market, investors clearly want to see some improvement before buying into the rally again. Several key companies will report earnings this week: Yum Brands Inc. (owns KFC, Pizza Hut, Taco Bell), IBM Corp., Marriott International Inc., Harley-Davidson Inc., and Bank of America Corp. Earnings reports from these companies will provide investors with penetrating looks at just how much the economy is beginning to recover.

Posted 7/12/09 11:38am ET in Economy, Fundranker, Market | Permalink | Comments (0)

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)

Fidelity Minimum Initial Investments

According to the latest Fidelity Investments Select Funds Prospectus, all of the Select funds require a $2,500 minimum initial investment for traditional and Roth IRA accounts, but they require only a $500 minimum initial investment for SEP-IRA and Keogh accounts. In practice, however, Fidelity’s online trading system allows minimum initial investments of $500 for new positions in Select funds for traditional IRAs and Roth IRA accounts, as well. At the time of this posting, Fidelity’s online trading system does not seem to work correctly for Select Utilities, for which it still requires a minimum initial investment of $2,500 for any IRA or Keogh account, in exception to the prospectus.

If you exchange between $500 and $2,000 into a new position in one of the Select funds online, you’ll receive a warning that your account may be subject to a small balance maintenance fee of $12. According to the Select Fund Prospectus, account fund balances are evaluated in November or December each year, and those with balances less than $2,000 are charged the $12 fee, even those in SEP-IRA and Keogh accounts. Accounts opened after September 30 are not subject to the small balance maintenance fee for that calendar year. Also, if you have at least $25,000 in assets at Fidelity, small balance maintenance fees for your accounts are waived.

In our FAQs about getting started and rebalancing, we discuss minimum amounts you should invest when using the Fundranker system for various types of accounts. Because of how Fidelity’s online trading system treats traditional and Roth IRA accounts in exception to the Select Funds Prospectus, in practice you can lump traditional and Roth IRA accounts in with the minimums we discuss for SEP-IRA and Keogh accounts.

Posted 6/18/09 1:34pm ET in Fidelity Investments, Fundranker | 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)