FundzTrader Hedged Mutual Fund Portfolio

FundzTrader Diversified and Hedged Portfolios

What about risk management?

In our newsletter series, we cover three basic techniques to manage your portfolio risk:

1. Market Timing (simple systems that can be used with Fidelity Mutual Funds)
2. Portfolio Diversification (how to find funds that provide real diversification)
3. Hedging (how to reduce the market risk in your portfolio)

With that in mind we have started tracking two portfolios to put those risk management techniques to work.

The first of these portfolios is the Diversified Fidelity Portfolio. It is designed for those who are looking for a system that uses only Fidelity Mutual Funds. It is a diversified portfolio, holding only "long" funds and is not hedged, simply because Fidelity Investments do not offer any "short" or "bear" funds.

It starts with our Fidelity Seasonal System (with it's simple market timing), and diversifies with the addition of our Fidelity Select System. To increase the diversification of this portfolio, we add Fidelity Real Esate Fund (FRESX) and Fidelity Select Health Care (PSPHX). The holdings are shown as follows:

• 34% Fidelity Seasonal Fund System (about 8.5% per fund for each of the 4 funds)
• 33% Fidelity Select System (about 16.5% per fund for each fund)
• 16.5% Fidelity Real Estate Fund
• 16.5% Fidelity Select Health Care

For the purposes of tracking the portfolio performance the holdings are rebalanced quarterly. To learn more about the construction of this portfolio, subscribe to our email newsletter.

We would expect this portfolio over time to yield about 10 to 15% per year, with a maximum drawdon below 15%.p>

FundzTrader Hedged Portfolio

Finally, we are also creating a hedged portfolio. This portfolio will use the same systems of Fidelity Funds as above, but will add funds from outside the Fidelity Funds Family. Specifically, we are adding Exchange Traded Funds. We already offer the FundTrader ETF system, and we will add that system to our holdings.

In addition, we will also add a hedge to this system, by holding the Proshares SP500 UltraShort ETF (SDS). This fund is a "bear" fund, designed to move in the opposite direction to the SP 500 index, at approximately twice the SP500 movement. (E.g., if the SP500 were to go up 1% in a day, the Proshares fund would drop in value by about 2%.)

The portfolio holdings are shown as follows:

• 20% Fidelity Seasonal Fund System (about 5% per fund for each of the 4 funds)
• 20% Fidelity Select System (about 10% per fund for each fund)
• 20% FundzTrader ETF System (about 5% per fund for each of the 4 funds)
• 10% Fidelity Real Estate Fund
• 10% Fidelity Select Health Care
• 20% ProShares SP500 Ultrashort (SDS)

Once again, for the purposes of tracking the portfolio performance the holdings are rebalanced quarterly. To learn more about the construction of this portfolio, subscribe to our email newsletter.

We think this system should prove to be somewhat lower risk than any of our individual systems. By design, this system is always hedged, so in strong markets it will underperform somewhat, but should have better performance in down markets. The goal of this portfolio would be to keep drawdowns under 10% while still seeing better than 10% annually on average.

We will start real time tracking of these portfolios in February of 2007.

As always, you can see the up to date performance of our portfolios on our Recent Performance page.

Sign Up Today

Go here now and create a user account to see our model portfolios. Start following one or both and make your money start working for you!

Click here to create a FREE user account now!

When you sign up, you get web access to:

1. ETF System Trades
2. ETF Fund Rankings (Pick your own trades)
3. Fidelity Equity Fund System Trades
4. Fidelity Select Fund System Trades
5. Fidelity Seasonal System Trades
6. Fidelity Select Fund rankings (You can time your own trades)
7. Fidelity Equity Fund rankings (You can use these to trade the funds available in your account)

Important note: As trading systems become popular, they start to lose their edge as more people trade them. So to guard against that, we are going to limit these free systems to the first 1000 users that sign up. These are the systems we trade ourselves, so we want them to continue working. Too many people trading them will break them, so we really are going to limit the number of users. Sign up today before we close them down!

Signing up is simple. Just HERE, fill out the form with your name and email information, pick a user name and password, and you're done. We will email you more information on using the system, and it really is free.

If you don' t want to try our system for some reason, please do yourself a favor and get off the buy and hold treadmill. Look at the record over the last five to seven years: The S&P 500 has been treading water and the Nasdaq has been taking on water. Find a system you can trade with a good track record, and get to work securing your future.

By the way, we hate spam as much as you do. We promise we won't rent, sell, or trade your email address when you sign up. And if you change your mind you can easily remove your email address from our database.

Not Ready to sign up yet? Want to know more?

Here’s what we have done. We've put together a FREE report on the Success Investing in Mutual Funds. There's no obligation, all you have to do is give us your name and email address. You don't have to buy anything, but we think you will find the information in this course to be not only a refreshing change of pace from the normal advice you see, but effective as well. There's no obligation to buy anything. But you will learn how to beat the markets, and do it trading just a few times a year.

Why should you bother to look? Because using the approaches in this report, over the first 4 years we published our system

The S&P 500 was up less than 3 % per year

Our system was up 16% a year

You can get that kind of advantage too! To start on the path to building real wealth with mutual funds, simply put your name and email address in the form below.


By the way, we hate spam as much as you do. We promise we won't rent, sell, or trade your email address when you sign up. And if you change your mind you can easily remove your email address from our database.

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