From 1999 through 2005, the stock market essentially went nowhere. The SP 5 hundred, for instance, only showed a 0.2% compounded yearly return in that time which is not a whole lot better return for the risk than you’d have gotten with a money market fund. The destiny of the Naz 100 was even more dismal.

It has been a maddening time for investors. They have been left pondering what they can do to improve their returns, and they are searching for alternatives to the low performance index funds and buy and hold investing. They need mutual fund advice. Many various newsletters and fiscal counsels are saying that by investing in sector funds and using rotation, folk are finding better results. The Hulbert Financial Digest and other top performing newsletters are all endorsing some modification of this technique. It ’s not tough to do either, if you use Fidelity Select Funds.

Let’s take a close look at what makes Fidelity Select Mutual Funds such a good choice for speculators :
* Although Fidelity imposes a minimum holding period of thirty days, their funds have traditionally realized above market returns.
* After the thirty day period, you can do unlimited trading with no redemption fees.
* Fidelity has a sector fund to track most sectors, so no matter what regional market sector is showing strength, youare going to be able to get in on it.
* Fidelity has a minimum of $2500 per fund. There is also no load on Select Funds.

Sector rotation Strategies

Although there are countless sector rotation secrets in existence going back for about 10 years, the one that follows is one of the easiest you will find :
1. Track all Fidelity Select Mutual Fund price changes for twenty-five days.
2. Invest in the fund with the highest gain.
3. Hold the fund for no less than a month to avoid early redemption costs.
4. If itis’s still the top fund after thirty days, keep holing it. If it’s not, change to the fund that is top rated at that point.
5. Hold the new fund for thirty days and repeat.

During those very same years the major indices were so flat, 1999 to 2005, stockholders using this sector fund revolution strategy showed over 16% gain each year for a total of almost 200% gain during the same period of time.

Naturally, as with everything in the world, there ’s a drawback to the revolution system. Its drawdown isn’t any better of thefinal market. Between two thousand and 2002, the strategy drawdown was nearly 50%. While it achieved all time highs in 2006, youstill wish to proceed carefully. The drawdown factor might be something that you need to consider when thinking about investing.

You can see, though, that there is a real advantage in using a sector rotation strategy that you don’t get with buy and hold investing. Every heavy investor should be certain to include the system in their investment portfolio.
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