Thursday, August 20, 2009 Welcome to the Fidelity Independent Adviser Hotline Report! We have not made any changes to our model portfolios this week. In this Issue: Don’s Outlook A stock market drop in China spooked investors on Monday, but markets recovered in the ensuing days and recaptured all the lost ground. Economic data helped stocks erase their losses. Deflation put a cap on costs in July and show that inflation remains a distant, albeit persistent, threat. Oil prices climbed higher during the equity rebound due to a drawdown in inventories and that could bump up the price indexes for August. Mortgage delinquencies remain an issue, with a report out today that shows 13 percent of homeowners were either struggling with payments or in foreclosure during the second quarter. This comes on the heels of Tuesday’s release of housing data that showed slightly lower than expected housing starts in the month of July. Today, the Conference Board said that its index of leading economic indicators increased for the fourth straight month. Weakness came from consumer expectations, money supply and building permits, which fits my argument that the consumer and housing will lag during the recovery. The strength in credit markets, unemployment and workweek data pushed the leading indicators into positive territory. The Empire Manufacturing index, measuring activity in New York, also paints a portrait of recovery. The number came in at 12, well above expectations of 3 and above last month’s -0.55 number. Anything above zero indicates expansion. The Philly Fed index confirmed this improvement today with a 4.2 reading, well above -7.5 from July. Signs of recovery dominate the weakness in the sectors that overbuilt during the past decade. Equity prices sold off this week and then quickly recovered, a sign of ongoing strength in the market. Therefore, I encourage investors to begin reinvesting any cash that they have kept on the sidelines, in keeping with your own risk tolerance levels. If you would like to know which mutual funds make up our newsletter model portfolios, please call us at (800) 548-3797. You can review historical portfolio performance below (please note that returns have been reduced since inception by a quarterly management fee):
*Through 7/31/09. Inception dates vary: Fidelity portfolios began trading October 1, 1995; NTF portfolios began trading October 1, 2001. Indexes do not include dividends. Portfolio returns have been reduced by Dion Money Management’s highest fee, currently 0.45% per quarter. See Performance Disclosure below Sage Words for the Week "When people talk, listen completely. Most people never listen." —Ernest Hemingway Fidelity Independent Adviser Sector Momentum Tracker Newsletter The Sector Momentum Tracker Newsletter Performance: 9.57% Net-of-Fees, Year-to-Date Return Through August 18, 2009 The Fidelity Independent Adviser Sector Momentum Tracker is a strategy which entails investing in high-quality, top-performing, growth-oriented mutual funds. Weekly, we will give you advice on how to allocate your portfolio in the appropriate funds based on tested buy-and-sell signals. Our approach to sector investing is technical and focused exclusively on improving long-term results. The Sector Momentum Tracker follows a real-time trading strategy that monitors and evaluates 41 Fidelity Select sector funds at all times, then determines which sectors you should invest in. That means you don’t have to worry about guesswork because our proprietary system’s automatic buy, sell, and hold recommendations tell you exactly what to do and when to do it. Fidelity has 41 sector funds. Each week we rank these funds from best to worst, 1 – 43 (there are two index funds for reference). Here, for your review, we list the top 4 (1-4) and bottom 4 (40-43) ranked funds in our weekly Sector Momentum Tracker newsletter. (NOTE: This should not be confused with our Power Index system, in which, as you know, the higher the number the better.) We also present, by way of comparison, the previous three weeks rankings for these same funds. This allows you to see the trend.
As always, you may also visit our website for additional information at http://www.fidelityadviser.com Please take a moment and add this email address to your address book or “white list”: info@fidelityadviser.com And for more information about email delivery problems or to make sure that our emails are not being blocked, please click here. You can now update your Email preferences in our Email Preference Center. In the preference center, you can specify which hotlines you would like to receive. Once updated, you will only receive the content you specify. Fidelity Independent Adviser is completely independent of, and not affiliated with, Fidelity Investments or any of the Fidelity mutual funds listed above. Performance Disclosure.All models and tables presented in this publication are the product of Fidelity Independent Adviser Newsletter, LLC, an independent company operated by Donald R. Dion, Jr., President of Dion Money Management, LLC (DMM), a registered investment adviser that manages assets for individuals, families, trusts and non-profit organizations. The Fidelity Independent Adviser is completely independent of and not affiliated with Fidelity Investments. The model performance returns are compiled by Fidelity Independent Adviser from historical returns of a determined mix of selected mutual funds or exchange-traded funds based upon investment strategies. These results include the reinvestment of all dividends and capital gains. Beginning 3/31/2007, portfolio returns are net of Dion Money Management’s highest fee, 0.4375% per quarter. The model results do not represent actual recommendations or trading. Model results do not reflect the impact of material economic and market factors that impact DMM's decision-making if DMM were actually managing clients' money. Because DMM manages its actual client portfolios according to each client's specific investment needs and circumstances, model results may in some cases differ significantly from the results our clients achieve, due in part to timing of the recommendations by DMM, market conditions, client money market balances, and timing of client deposits and withdrawals. In addition, client portfolios may contain less or more funds and may contain different funds in order to meet client needs. Model performance results may have inherent limitations. No representation is made that any account will or is likely to achieve profits or losses similar to those shown, and there are frequently significant differences between hypothetical performance results subsequently achieved by following a particular strategy. Model trading does not involve financial risk, and no model trading record can completely account for the impact of financial risk associated with actual trading. Other factors related to the markets in general or the implementation of any specific trading strategy that can adversely affect actual trading results cannot be fully accounted for in the preparation of model performance results. The volatility of the S&P 500, Wilshire 5000, Russell 2000, Dow Jones and Nasdaq indices may be materially different from that of the client's account, the securities holdings of which may differ significantly from those of the indices. The indices' results shown reflect reinvestment of dividends unless otherwise noted. These indices have not been selected to represent appropriate benchmarks to compare the clients' performance, but rather are disclosed to allow for comparison of the client's performance to that of well-known, widely recognized indices. This material has been prepared solely for informational purposes. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. All investments involve risk including loss of principal. |
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Interview with Paul Frank
For this interview, Don Dion met with Paul Frank, portfolio manager of the ETF Market Opportunity Fund (ETFOX), formerly the Navigator Fund (NAVFX), to get an inside look at one of the top-rated ETF-comprised mutual funds available today. In the rapidly growing ETF industry, ETFOX will hit the five-year mark in spring 2009, and it recently garnered a five-star rating from Morningstar and the distinction of Lipper Leader for Preservation of Assets from Lipper Fund Services. |
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The Fidelity Independent Adviser |
The Fidelity Independent Adviser is read monthly by thousands of investors, like you, who value our advice and rely on my model portfolios to assist them in developing or adjusting their own portfolios to reach their investment goals. It is important to be informed before making financial decisions. That’s why the Fidelity Independent Adviser prides itself on giving investors the necessary information to further their financial profits – and we’ve been doing this for over 10 years. |
