Fidelity Seasonal Mutual Fund System

What about market timing?

Sometimes it's just not productive to be in the market, so a common request is to find a way to time fund purchases as a way to either improve your overall returns, or at least to reduce the risk and volatility of your returns. The problem doing this with mutual funds is twofold:

1) It's very hard to actually time the market well,

2) The fund companies have made it more difficult. They have introduced Early Redemption Fees (ERF's) that make it difficult to get in and out of the market very often without either destroying your returns with their extra fees every time you switch, or they may just ban you for overtrading in their funds.

With that in mind we have developed a simple calendar based system that improves the odds of getting better returns, and historically reduces volatility.

The most popular of the calendar based systems is explained by the adage "Sell in May and go away." Simply put, you stay out of the market for the 6 months beginning with May, and buy again in the beginning of October. And actually those 6 months do underperform. But exploring that a little deeper, you find that the 2 worst months of the year since 1950 have been August and September. Armed with that we looked at the performance of the Fidelity Equity system from January 1995 to January 2006. Specifically we looked at the performance during each of our quarterly holding periods. Read this article to learn more about seasonalty timing systems

The 3rd quarter (July thru September) underperformed on our system as well. The compounded return in that quarter was -1.1%, by far the worst. In addition, out of 8 negative quarterly returns, 4 of them were during the 3rd quarter, including the 3 worst quarters we had in the backtest (1998, 2001, 2002).

By going to cash in the 3rd quarter holding period, the overall return of the Fidelity Equity system improved slightly (just over 2%). However, the maximum drawdown improved from about 27% to 13%. While these are backtested results, it shows a significant improvement in the volatility of the system returns.

Since 4 of the 11 years were down in the 3rd quarter, that implies that over half the time there were positive returns in the 3rd quarter. So, if you choose to follow this system and sit out that quarter, be prepared to miss some positive returns about half the time. There are no certainties when it comes to investing in the markets, but anything you can do to push the odds in your favor is a smart move, and over the years taking your money out of the market in the 3rd quarter has helped do just that.

We think this system should prove to be somewhat lower risk than our Fidelity Equity System.

We will start real time tracking of this system (the Fidelity Seasonal System) in July of 2006.

It will use the same fund family and ranking system that the Fidelity Equity system uses, and will trade on the same dates, the only difference being that instead of buying a set of 4 funds the first of July, we will be going to money market funds, and buy again the beginning of October.

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.

stocks vs bonds | investing in oil stocks | asset allocation | help with investing | stocks and bonds |
bear mutual funds | best fidelity funds | invest in penny stocks | articles | currency etf
gold ETFs how much do you need to retire