Fidelity Select Fundranker

Fundranker Blog—Market Category—Page 3

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)

Spring Rally

After nine straight weeks of new highs and after weathering the recent deluge of earnings reports, the spring market rally finally took a break during the week ended May 15, 2009. 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) fell 5.65%, 4.87%, and 3.38%, respectively, for the week but still have gained 18.36%, 31.12%, and 32.48%, respectively, since their recent March 9 lows. As of May 15, the Nasdaq Composite is nearly 2% higher than its January 6 high, the S&P 500 is within 5% percent of its January 6 high, and Fundranker is within 10% of its January 6 high.

Despite this week’s setback, has the market turned the corner? The stock market generally begins a sustained recovery several months before it becomes apparent that the economy is recovering from a recession, although it also can stage bear market rallies and still hit new lows if true recovery doesn’t occur. Are tantalizing hints of economic recovery, such as improvements in bank-to-bank short-term lending, pending home sales, construction spending, existing home inventories, and consumer spending holding out real or false hope? Stay tuned to see if this spring rally regains its footing. See our March/April Rally and New Market Rally posts for earlier information on this rally.

Posted 5/17/09 11:59am ET in Economy, Fundranker, Market | Permalink | Comments (0)

March/April Rally

The current market rally, March 10, 2009, through May 8, 2009, now has outlasted the previous bear market rally, November 21, 2008, through January 6, 2009. The previous rally lasted 30 sessions, while the current rally has lasted 43 sessions. 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) all reached new highs for this rally during the week that ended May 8 and have gained 25.44%, 37.83%, and 37.12%, respectively, since their recent March 9 lows.

For nine weeks in a row, the market has seen new rally highs, with the exception of the S&P 500's loss of just 0.35% for the week ended April 24. As of May 8, the Nasdaq Composite is nearly 6% higher than its January 6 high, the S&P 500 is a fraction of a percent above its January 6 high, and Fundranker is within 5% of its January 6 high.

Is this rally the beginning of a new bull market? It hung on during the weeks ended April 24 and May 1 during a deluge of companies reporting their latest earnings, a true test of its staying power. See our Spring Rally post for newer information on this rally. See our New Market Rally post for earlier information on this rally.

Posted 5/10/09 11:10am ET in Fundranker, Market | Permalink | Comments (0)

New Market Rally

The market fell to new multi-year lows on Monday, March 9, 2009. From recent market highs reached on January 6, 2009, the peak of what turned out to be a bear market rally followed by new lows, through March 9, Fundranker’s Top Eight Model Portfolio fell 23.59%, while Fidelity’s Spartan 500 Index Fund (which tracks the S&P 500 Index) fell 27.19%, and Fidelity’s Nasdaq Composite Index Fund (which tracks the Nasdaq Composite Index) fell 23.03%.

Since the market lows on Monday, March 9, Fundranker, the S&P 500 Index, and the Nasdaq Composite Index have come roaring back with gains of 21.36%, 28.41%, and 33.61%, respectively. Is this just another bear market rally, similar to the one that peaked on January 6, with further new lows ahead, or is it the beginning of a real recovery? The Nasdaq Composite Index finally topped its January 6 high as of April 9, on a number of days since then, and again as of April 24. Notice it took a 30% gain to undo a 23% loss--that's because the gain was figured on the March 9 low, while the loss was figured on the January 6 high. The S&P 500 Index and Fundranker still have quite some way to go to remake their January 6 highs. What's next?

See our Spring Rally and March/April Rally posts for newer information on this rally.

Posted 4/26/09 6:05pm ET in Fundranker, Market | Permalink | Comments (0)

Nasdaq Composite vs S&P 500

Here at Fidelity Select Fundranker, we track the Nasdaq Composite and the S&P 500 Indexes so that we can compare their returns to Fundranker Top Eight Model Portfolio returns. We have tracked the S&P 500 Index since January, 1997, using Fidelity’s Spartan 500 Index Fund (FSMKX), and we have tracked the Nasdaq Composit Index since October, 2003, using Fidelity’s Nasdaq Composite Index Fund (FNCMX), which began operations in September, 2003. We began our Nasdaq Composite Index tracking portfolio on September 30, 2003, with the number of shares of FNCMX that gave it the same dollar balance as our S&P 500 tracking portfolio had on September 30, 2003.

As of April 22, for the first time since January, 2004, our Nasdaq Composite Index tracking portfolio’s value surpassed our S&P 500 tracking portfolio’s value. The Nasdaq Composite Index is heavily weighted toward technology stocks, which have been some of the best performers during the recent rally. This strength in technology stocks has propelled several Select technology funds into our Top Eight Model Portfolio, and at this point in April, it looks like another one or two Select technology funds may join the Top Eight Model Portfolio for May. Perhaps this strength in technology will provide the leadership needed to begin our recovery from recession as well as returning the Top Eight Model Portfolio to its customary role of outperforming the indexes.

Posted 4/23/09 1:04pm ET in Fundranker, Market | Permalink | Comments (0)

Nasdaq Composite Breaks Lower

On March 5, 2009, the Nasdaq Composite Index broke through its November 20, 2008, low to close at a level last seen in March, 2003, joining the Dow Jones Industrial Average and the S&P 500 Index, which broke through their November 20 lows about two weeks ago. The DJIA since has retreated to levels last seen in April, 1997, while the S&P 500 has fallen to levels last seen in September, 1996. As of the close on March 5, the Nasdaq Composite Index remains about 30 points over its March, 2003, low. The Nasdaq Composite Index, heavily weighted toward technology stocks and now set back six years, seems to be weathering the storm better than the DJIA, now set back 12 years, and the S&P 500, now set back 13 years. Perhaps the technology sector will lead us out of this recession.

Posted 3/5/09 9:28pm ET in Market | Permalink | Comments (0)

Twelve-Year Lows

With the market close on February 23, the Dow Jones Industrial Average and the S&P 500 hit lows they haven’t seen since early 1997. Both indexes are about 50% lower than their October, 2007, highs. Fundranker bucked the trend when this bear market first started in November, 2007, and made new highs in May and June, 2008. It has fallen dramatically over the last eight months, but it has not been set back nearly as far as the DJIA and S&P 500. With the February 23 close, Fundranker hit lows it last saw in late 2004.

The markets are weighing in extremely negatively on the latest developments for fixing our financial system and stimulating our economy. Business, investor, and consumer confidence continue to fall to new lows. The picture couldn’t look much bleaker, and consensus on this by all the players couldn’t be much stronger. Contrarians believe that when everyone thinks alike, everyone is likely to be wrong. Let’s hope the contrarians are right. Also, remember that the stock market is an advance indicator for shifts in the economy. Perhaps this new low will be the turning point for the next bull market to begin.

Posted 2/24/09 11:21am ET in Economy, Fundranker, Market | Permalink | Comments (0)

Market Perspective

Let’s review what happened in the market from its high in October, 2007, through the end of 2008 and try to put it in perspective. This isn’t just a run of the mill bear market and recession. We are in the midst of the worst downturn since the Great Depression. In general, nearly $7 trillion of shareholders’ wealth disappeared, setting them back nearly five and a half years. For Fundranker investors, however, this downturn set us back three and a half years, which is bad, but not nearly as bad as the general market.

Fidelity Investments’ Select funds, taken as a group, reflect the market as a whole and were hit hard and across the board in 2008. All 41 funds had losses for the year, ranging from 11.35% to 63.16% and averaging 40.98%, so it’s not surprising that the S&P 500 tracking portfolio, the Top Eight Model Portfolio, and the Nasdaq Composite tracking portfolio lost 40.104%, 41.132%, and 44.306%, respectively, from November, 2007, through December, 2008. For comparison, in the previous downturn, September, 2000, through March, 2003, a much longer period, the Top Eight Model Portfolio lost 24.465% and the S&P 500 tracking portfolio lost 42.129%. Fundranker was able to withstand that previous downturn much better than the market. We all thought it was bad when the Internet bubble burst, but this current crisis has done nearly as much damage to the S&P 500 in much less time and may have farther to go.

The Fundranker system works by positioning an investor in the best performing Select funds. Most times, there are at least a few Select funds that are performing well, and the Fundranker system is able to pick them out, hence its long-term, market beating results. In the first half of 2008, when oil peaked above $147/barrel, energy and natural resource funds performed amazingly well and allowed Fundranker to buck the general downtrend. In the second half of the year, however, the downturn spread to all sectors of the market, none of the Select funds were performing well, and the Fundranker system was reduced to selecting the least worst performing Select funds.

Finally, in December, over three-fourths of the Select funds came out of their funk and turned in some nice returns, which will give the Fundranker system some better grist for the mill, so to speak, but it remains to be seen if this is the beginning of a sustained market recovery. The incoming presidential administration seems to be taking the situation very seriously and has proposed a massive stimulus program, so perhaps 2009 will be brighter.

Posted 1/1/09 10:38pm ET in Fundranker, Market | Permalink | Comments (0)

December Rally

The market has finally turned somewhat positive in December. After the Top Eight Model Portfolio, the S&P 500 tracking portfolio, and the Nasdaq Composite tracking portfolio suffered sharp losses of 8.1%, 8.9%, 9.0%, respectively, on December 1, they have come roaring back with gains of 10.1%, 6.6%, and 8.1%, respectively, through December 15. The Top Eight Model Portfolio clearly has outperformed the market indices during this 10 trading day period. In fact, one of the new funds Fundranker bought on December 3 gained 23.4% through December 15. Is this the beginning of a bull market or just a bear market rally? The stock market is usually an advance indicator for the economy, but who knows how long and deep our recession will be? Only time will tell, but in the meantime, let Fundranker position you advantageously for whatever rallies do occur.

Posted 12/16/08 1:12pm ET in Market | Permalink | Comments (0)

Missing Out

The November/December issue of Fidelity Investor’s Monthly has a good article about the hazard of missing time in the stock market. An S&P 500 index investor who capitulates after big drops in the index and sells his position can easily miss some of the best days in the market. For example, if you sold on Black Monday, October 19, 1987, when the S&P 500 fell 20%, you would have missed out on the 15% rally over the next two days. If you sold on October 10, 2008, after the S&P 500 fell for eight consecutive days, you would have missed out on the S&P 500’s 12% gain the following day. More recently, if you sold on November 20, 2008, after the S&P 500 fell 17.4% over five days, you would have missed out on the 19.2% gain over the succeeding five days.

The Fidelity article also charted the performance of the S&P 500 from January 1, 1980, to October 31, 2008, nearly 28 years. A $10,000 investment in the S&P 500 would have grown to $202,730 with a buy and hold strategy. If the investor had missed just the best five days for the S&P 500, the portfolio’s ending value would be only $134,842, 33% less. Missing the 10 best days lowers the ending portfolio value to $104,648, a drop of 48%. Missing the 30 best days impacts the ending portfolio value even more, lowering it to $45,703, 77% less. Finally, missing the best 50 days leaves the investor with an ending portfolio worth only $22,969, 88% less.

Analyses like this one are popular during times of market downturns, but that doesn’t make them any less meaningful. It never hurts to emphasize the perils of trying to time the market, especially in times of great turmoil, when it is even more tempting to do so.

Posted 12/4/08 12:02pm ET in Market | Permalink | Comments (0)

Market Meltdown

The Dow Jones Industrial Average lost 500 points on Monday and 450 points on Wednesday this week in the wake of the bankruptcy of Lehman Brothers and the Federal Reserve’s unprecedented bailouts of Fannie Mae, Freddie Mac, and American International Group. The Federal Reserve is doing everything in their power to keep our financial system from completely unraveling. How successful will they be? How quickly? If you believe in America, you have to believe that we will survive this crisis.

How and why did our financial system get into this mess? Many pundits are blaming the move toward deregulation. Think of the battle between regulation and deregulation as a pendulum. It’s pretty obvious that the pendulum soon will swing back toward regulation.

Posted 9/18/08 3:38pm ET in Market | Permalink | Comments (0)