2012 Weekly Trades

All distributions and dividends are assumed to be reinvested, which has no meaningful effect on the rates and percentages shown. For comparison, the same period returns of the Vanguard Index 500 Fund (symbol VFINX), whose performance is close to the S&P 500 index, are also shown.

It should not be assumed that trades in the future following the Fidelity Select Switching System will be profitable or will equal the performance of the trades shown below.

Note: Buy prices marked by a * have been adjusted for a distribution by the
      fund between the purchase and sale dates.  This distribution is assumed
      to be reinvested in the fund, which has no meaningful effect on the
      percent changes or overall rates of return shown. Fidelity normally
      makes any distributions for the Selects on the first two Fridays in
      April and on the first three Fridays in December.
                                                            Sell or          Index
Buy       Fund              Sale/Exchange              Buy   Recent  Percent  500
Date      Purchased         Date     Exchange to:      Price Price   Change   Change

1/3/12    Biotechnology     2/27/12  Natural Gas       86.39  99.06  14.7%    7.4%
1/9/12    Automotive        3/26/12  Banking           32.06  38.72  20.8%   10.6%
1/17/12   Biotechnology     2/27/12  Natural Gas       93.99  99.06   5.4%    6.0%
1/23/12   Electronics       3/19/12  Banking           51.06  54.62   7.0%    7.5%
1/30/12   Electronics       3/19/12  Banking           51.02  54.62   7.1%    7.7%
2/6/12    Electronics       3/19/12  Banking           53.08  54.62   2.9%    5.2%
2/13/12   Computers         4/16/12  Leisure           63.72  65.23   2.4%    1.5%
2/21/12   Automotive        3/26/12  Banking           38.52  38.72   0.5%    3.7%
2/27/12   Natural Gas       4/2/12   Banking           33.33  31.84  -4.5%    3.9%
3/5/12    Retailing         5/29/12  Biotechnology    58.09*  59.68   2.7%   -1.9%
3/12/12   Retailing         5/29/12  Biotechnology    59.30*  59.68   0.6%   -2.4%
3/19/12   Banking           5/14/12  Utilities        19.23*  18.36  -4.5%   -4.8%
3/26/12   Banking           5/14/12  Utilities        19.20*  18.36  -4.4%   -5.3%
4/2/12    Banking           5/14/12  Utilities        19.15*  18.36  -4.1%   -3.3%
4/16/12   Leisure           5/21/12  Money Market     112.28 103.77  -7.6%   -3.7%
4/23/12   Medical Delivery  5/29/12  Biotechnology     64.20  59.97  -6.6%   -2.3%
4/30/12   Const & Housing   6/4/12   Money Market      43.03  37.96 -11.8%   -8.3%
5/7/12    Utilities         7/16/12  Energy Service    55.10  57.18   3.8%   -0.7%
5/14/12   Utilities         7/16/12  Energy Service    55.28  57.18   3.4%    1.5%
5/21/12   Money Market      7/2/12   Biotechnology      1.00   1.00   0.0%    4.0%
5/29/12   Biotechnology     8/13/12  Commun Equip      98.15 105.12   7.1%    5.8%
6/4/12    Money Market      7/9/12   Biotechnology      1.00   1.00   0.0%    6.0%
6/11/12   Materials         7/16/12  Energy Service    62.99  64.63   2.6%    3.6%
6/18/12   Telecomm          8/27/12  Commun Equip      47.17  50.23   6.5%    5.3%
6/25/12   Biotechnology     8/13/12  Commun Equip     101.90 105.12   3.2%    7.2%
7/2/12    Biotechnology     8/13/12  Commun Equip     107.30 105.12  -2.0%    3.1%
7/9/12    Biotechnology     8/13/12  Commun Equip     107.90 105.12  -2.6%    4.0%
7/16/12   Energy Service    9/24/12  Biotechnology     60.92  70.29  15.4%    7.2%
7/23/12   Energy Service    9/24/12  Biotechnology     62.81  70.29  11.9%    7.4%
7/30/12   Energy Service    9/24/12  Biotechnology     66.74  70.29   5.3%    4.7%
8/6/12    Energy Service    9/24/12  Biotechnology     67.11  70.29   4.7%    4.0%
8/13/12   Commun Equip      10/8/12  Health Care       21.55  21.97   1.9%    4.0%
8/20/12   Commun Equip      10/8/12  Health Care       22.16  21.97  -0.9%    3.0%
8/27/12   Commun Equip      10/8/12  Health Care       22.24  21.97  -1.2%    3.5%
9/4/12    Retailing         10/15/12 Transportation    62.67  63.06   0.6%    2.7%
9/10/12   Biotechnology     10/22/12 Insurance        110.97 111.94   0.9%    0.5%
9/17/12   Natural Resources 10/31/12 Money Market      34.27  32.60  -4.9%   -3.2%
9/24/12   Biotechnology     10/31/12 Money Market     115.63 107.61  -6.9%   -2.9%
10/1/12   Medical Equip     11/5/12  Const & Housing   29.55  28.40  -3.9%   -1.7%
10/8/12   Health Care       11/19/12 Commun Equip     149.61 141.24  -5.6%   -4.5%
10/15/12  Transportation    12/10/12 Electronics       51.18  52.57   2.7%   -1.1%
10/22/12  Insurance         12/3/12  Retailing         53.52  52.51  -1.9%   -1.4%
10/31/12  Money Market      12/3/12  Retailing          1.00   1.00   0.0%    0.1%
11/5/12   Const & Housing   12/17/12 Commun Equip      47.83  49.10   2.7%    1.4%
11/12/12  Air Transport     2/19/13  Electronics      38.04*  44.50  17.0%   11.6%
11/19/12  Commun Equip      1/28/13  Energy Service   21.31*  24.69  15.8%    8.6%
11/26/12  Commun Equip      1/28/13  Energy Service   22.10*  24.69  11.7%    7.0%
12/3/12   Retailing         1/7/13   Automotive       63.82*  63.40  -0.7%    3.9%
12/10/12  Electronics       1/28/13  Energy Service    44.66  48.21   7.9%    6.0%
12/17/12  Commun Equip      1/28/13  Energy Service    23.17  24.69   6.6%    5.0%
12/24/12  Automotive        2/19/13  Electronics       38.03  41.45   9.0%    7.6%
12/31/12  Automotive        2/19/13  Electronics       39.02  41.45   6.2%    7.6%       

No money market interest assumed because rates are a small fraction of 1%
In order to keep this complicated page from becoming even more so, the trade results shown do NOT include the use of "stop-loss" tactics, which is my recommended strategy. These are discussed in several other pages on this site, and there are some examples that illustrate the potential beneficial effects of using stop-losses. The more volatile sector funds such as those in high technology, Biotechnology, and Energy Service are more likely to get stopped out. In many such cases, the fund likely would have been held less than 30 days. If so, it would have been hit with Fidelity's 0.75% short-term selling penalty for Select funds.

Since it is unlikely that any investor would act on all of the weekly signals shown above and on the linked pages for prior years, here is an illustration of one use of the weekly trade list tables.

Starting on 1/3/12, the closest Monday to the start of 2012, if one had invested
into a single Select fund and followed the system, these would be the trades:

Buy       Fund              Sale/Exchange            Percent  Index 500
Date      Purchased         Date     Exchange to:    Change   Change
--------------------------------------------------------------------
1/3/12    Biotechnology     2/27/12  Natural Gas       14.7%    7.4%
2/27/12   Natural Gas       4/2/12   Banking           -4.5%    3.9%
4/2/12    Banking           5/14/12  Utilities         -4.1%   -5.5%
5/14/12   Utilities         7/16/12  Energy Service     3.4%    1.5%
7/16/12   Energy Service    9/24/12  Biotechnology     15.4%    7.2%
9/24/12   Biotechnology     10/31/12 Money Market      -6.9%   -2.9%
10/31/12  Money Market      12/3/12  Retailing          0.0%    0.1%
12/3/12   Retailing         Still held as of 12/31/12  -2.6%    1.4%
--------------------------------------------------------------------
Total return as of 12/31/12                            13.6%   13.1%
    accounting for maximum 2% annual management fee    11.6%

The calculation for the total return for the track is:
 (1.147)(0.955)(0.959)(1.034)(1.154)(0.931)(1.000)(0.974) - 1  expressed as a percent.
Here is a table showing what have happened if one had followed the method illustrated above starting on the closest "Monday" to the beginning of each year since 1996. The returns shown are those for the following year (52 weeks). "Selects System" shows the results of trading the Select funds, which have been reduced by the maximum 2% annual management fee. Those returns do not reflect Fidelity's load (removed in September 2003) applied to initial purchases of Select funds, which ranged from 0% to 3% depending on the amount of the purchase. The links in the right column show the weekly trades for each year and the computations of the values in the table. Returns for the Vanguard Index 500 fund are included to provide a market condition context.
Year      Selects System    Index 500      Weekly Trade Lists & Computations

1996           31.2%           21.9%       1996 Weekly Trade List
1997           33.1%           28.6%       1997 Weekly Trade List
1998           17.1%           27.7%       1998 Weekly Trade List
1999           56.4%           19.6%       1999 Weekly Trade List
2000           32.0%          -10.8%       2000 Weekly Trade List
2001          -20.5%          - 9.5%       2001 Weekly Trade List
2002          -23.8%          -21.3%       2002 Weekly Trade List
2003           18.4%           28.2%       2003 Weekly Trade List
2004           14.7%            8.8%       2004 Weekly Trade List
2005           12.5%            7.4%       2005 Weekly Trade List
2006           12.8%           13.6%       2006 Weekly Trade List
2007           11.2%            6.9%       2007 Weekly Trade List
2008          -42.4%          -38.4%       2008 Weekly Trade List
2009           90.5%           32.9%       2009 Weekly Trade List
2010           31.4%           12.9%       2010 Weekly Trade List
2011            7.6%            2.4%       2011 Weekly Trade List
2012           11.6%           13.1%
              ------          ------
Average(96-12) 17.3%            8.5%

No claim is made that the system will perform in the future as it has in the past or as illustrated above. Also, there can be no assurances that the system will produce a profit in the future; it is possible that the system will produce losses.

Comments and Implementation Issues

(Past comments may be deleted when they are no longer relevant)

Januray 3, 2012:

We have now completed 2011 (actually Jan. 3, 2011 to Jan. 3, 2012), so we can see how the system did for the year. There were six completed trades plus the current one in Biotechnology that has been open for three weeks. There are almost always five to seven trades a year, so 2011 was on the high end of that range. (Follow the link for 2011 above to see the trade list.)

Four of the six completed trades were profitable as is the open trade so far. The second and third trades of the year did better than the broad market as measured by the Vanguard Index 500 fund, and that is true of the open trade. The other trades had results very close to buying and holding the index fund for the same periods. All told, the Selects Switching finished well ahead of the index fund in what turned out to be a volatile year for stocks that ended up close to where it started. For the tenth time in the sixteen years 1996-2011, the system has outperformed the index fund.

August 13, 2012:

Although it has been somewhat of a roller coaster ride, so far the year is following the presidential cycle pattern that on the average has seen decent stock market gains in the election year. This is in contrast to 2011, which did not follow the pattern of the pre-election years being the best of the four year cycle. I believe calendar based patterns such as these and the "January Barometer" often are worthwhile ways to manage one's investments. However, they can be very difficult to stick to because it can take quite a while, four years in this case, to convince oneself the "wrong" result (i.e. poor investment performance) was just one of those things due to no method working every time. Two or three losing periods are likely to convince many that the pattern no longer "works." I prefer to use methods that follow trends or, as in the case of Selects Switching, trade frequently enough to avoid the discouragement that often results for calendar based method.

December 31, 2012:

We have now completed 2012, so we can see how the system did for the year. Unlike most every year that sees five to seven trades, 2012 had seven completed trades and an eighth one that had been open for four weeks at the end of the year, so it was nearly complete.

One of the seven completed trades was in the money market fund, so it does not count as a winning or a losing trade. The broad market as represented by the Vanguard index fund was virtually unchanged during the period of that trade. Three of the other six completed trades were profitable, but the open trade at the end of the year was down at that point.

Overall, the system slightly outperformed the index fund for the the 52 week period, but when my management fee was taken into account, it trailed the broad market by one and a half percent. Even with 2012's slight underperformance taken into account, the average performance of the system with fees over the seventeen year period 1996-2012 is more than double the average of the index fund. The respective values, which are in the table above, are 17.3% and 8.5%.

Since December 31, 2012 is the closest Monday to the start of 2013, the track for the new year starts with Automotive being purchased now. The 2012 track will continue to be shown until the last trade, in Retailing, is closed. Since the fund has been owned for four weeks and there is a five week minimum holding period, that trade may be closed next week.

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