2014 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

1/6/14    Industrials       2/18/14  Electronics       33.08  33.13   0.2%    1.0%
1/13/14   Biotechnology     3/17/14  Banking          199.17 213.51   7.2%    2.6%
1/21/14   Biotechnology     3/17/14  Banking          212.72 213.51   0.4%    1.2%
1/27/14   Biotechnology     3/17/14  Banking          199.89 213.51   6.8%    4.7%
2/3/14    Electronics       4/28/14  Natural Gas      61.82*  68.88  11.4%    7.8%
2/10/14   Communications Eq 3/17/14  Banking           30.78  30.98   0.6%    3.5%
2/18/14   Electronics       4/28/14  Natural Gas      67.41*  68.88   2.2%    1.9%
2/24/14   Biotechnology     3/31/14  Utilities        226.19 194.85 -13.9%    0.1%
3/3/14    Pharmaceuticals   4/7/14   Energy Service    21.23  20.22  -4.8%    0.1%
3/10/14   Transportation    4/14/14  Natural Gas      77.95*  74.70  -4.2%   -2.3%
3/17/14   Banking           4/21/14  Natural Gas      25.85*  25.45  -1.6%    0.8%
3/24/14   Banking           4/28/14  Natural Gas      26.47*  24.99  -5.6%    0.8%
3/31/14   Utilities         5/27/14  Transportation   71.53*  73.53   2.8%    2.4%
4/7/14    Energy Service    8/4/14   Medical Delivery  84.26  93.73  11.2%    5.2%
4/14/14   Natural Gas       6/23/14  Natural Resources 40.63  46.17  13.6%    7.2%
4/21/14   Natural Gas       6/23/14  Natural Resources 42.62  46.17   8.3%    4.8%
4/28/14   Natural Gas       6/23/14  Natural Resources 42.68  46.17   8.2%    4.8%
5/5/14    Pharmaceuticals   6/9/14   Electronics       20.08  20.19   0.5%    3.8%
5/12/14   Pharmaceuticals   6/23/14  Natural Resources 19.81  20.82   5.1%    3.3%
5/19/14   Telecomm          6/23/14  Natural Resources 60.56  61.10   0.9%    3.9%
5/27/14   Transportation    7/7/14   Medical Equipment 81.21  82.66   1.8%    3.2%
6/2/14    Technology        9/2/14   Biotechnology    114.77 125.36   9.2%    4.1%
6/9/14    Electronics       8/11/14  Biotechnolgy      75.94  76.30   0.5%   -0.9%
6/16/14   Biotechnology     7/21/14  Electronics      196.71 188.86  -4.0%    1.6%
6/23/14   Natural Resources 8/4/14   Medical Delivery  43.77  41.86  -4.9%   -1.1%
6/30/14   Energy Service    8/4/14   Medical Delivery  98.22  93.73  -4.6%   -1.0%
7/7/14    Medical Equipment 8/18/14  Biotechnolgy      38.26  38.08  -0.5%   -0.1%
7/14/14   Multimedia        8/25/14  Construct & Hous  82.44  82.31  -0.2%    1.3%
7/21/14   Electronics       9/15/14  Biotechnology     79.85  79.19  -0.8%    0.9%
7/28/14   Medical Delivery  9/29/14  Pharmaceuticals   77.57  79.43   2.4%    0.3%
8/4/14    Medical Delivery  9/29/14  Pharmaceuticals   77.26  79.43   2.8%    2.4%
8/11/14   Biotechnology     10/13/14 Money Market     199.52 201.69   1.1%   -2.9%
8/18/14   Biotechnology     10/13/14 Money Market     210.63 201.69  -4.2%   -4.6%
8/25/14   Construct & Hous  10/20/14 Money Market      56.49  54.85  -2.9%   -4.5%
9/2/14    Biotechnology     10/13/14 Money Market     218.62 201.69  -7.7%   -6.2%
9/8/14    Construct & Hous  10/20/14 Money Market      56.76  54.85  -3.4%   -4.7%
9/15/14   Biotechnology     11/24/14 Air Trans        212.82 236.93  11.3%    4.7%
9/22/14   Pharmaceuticals   11/10/14 Transportation    21.65  21.99   1.6%    2.4%
9/29/14   Pharmaceuticals   11/10/14 Transportation    21.81  21.99   0.8%    3.3%
10/6/14   Pharmaceuticals   11/10/14 Transportation    21.67  21.99   1.5%    3.9%
10/13/14  Money Market      11/17/14 IT Services        1.00   1.00   0.0%    9.1%
10/20/14  Money Market      11/24/14 Air Trans          1.00   1.00   0.0%    8.9%
10/27/14  Biotechnology     12/29/14 Utilities       206.65* 223.44   8.1%    7.0%
11/3/14   Biotechnology     12/29/14 Utilities       210.42* 223.44   6.2%    4.0%
11/10/14  Transportation    1/12/15  Construct & Hous 92.54*  92.02  -0.6%   -0.2%
11/17/14  IT Services       1/5/15   Natural Gas      35.38*  36.07   2.0%   -0.8%
11/24/14  Air Trans         1/20/15  Biotechnology    70.66*  72.54   2.7%   -2.0%
12/1/14   Air Trans         1/20/15  Biotechnology    72.23*  72.54   0.4%   -1.3%
12/8/14   Electronics       2/2/15   Natural Res.      83.82  83.55  -0.3%   -1.7%
12/15/14  Biotechnology     2/9/15   Natural Res.     211.24 227.98   7.9%    3.1%
12/22/14  Biotechnology     2/9/15   Natural Res.     225.25 227.98   1.2%   -1.3%
12/29/14  Utilities         2/9/15   Natural Res.      77.66  73.62  -5.2%   -1.9%

Money Market fund assumed not to earn any interest    
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 12/30/13, the closest Monday to the start of 2013, 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
--------------------------------------------------------------------
12/30/13  Industrials       2/18/14  Electronics       -1.2%    0.2%
2/18/14   Electronics       4/28/14  Natural Gas        2.2%    1.9%
4/28/14   Natural Gas       6/23/14  Natural Resources  8.2%    4.8%
6/23/14   Natural Resources 8/4/14   Medical Delivery  -4.9%   -1.1%
8/4/14    Medical Delivery  9/29/14  Pharmaceuticals    2.8%    2.4%
9/29/14   Pharmaceuticals   11/10/14 Transportation     0.8%    3.3%
11/10/14  Transportation    Still held as of 12/29/14   4.4%    2.8%
--------------------------------------------------------------------
Total return as of 1/5/15                              12.4%   15.3%
    accounting for maximum 2% annual management fee    10.4%

The calculation for the total return for the track is:
 (0.988)(1.022)(1.082)(0.951)(1.028)(1.008)(1.044) - 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%       2012 Weekly Trade List
2013           15.2%           31.7%       2013 Weekly Trade List
2014           10.4%           15.3%
              ------          ------
Average(96-14) 16.8%           10.1%

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)

February 18, 2014:

Two funds are signaled for sales this week. If one owned both of them and wanted to maintain diversification by owning two or more of the Selects as opposed to having all of the assets in a single fund or reducing the number of funds held, there are a couple of ways to do so. The easiest would be to exchange one of the funds into the current top-ranked fund, Electronics, and the other fund into the money market fund. When a fund not in the high technology sectors rose to the top, the cash would be used to buy that fund assuming no fund already owned was signaled for sale and exchange that week and no other fund held was highly correlated with the new top-ranked fund.

As an alternative to exchanging into the money market fund, the other fund could be exchanged into the second ranked fund this week. That fund is Utilities, which is not a high technology one, so it would be able to maintain diversification if it is not already owned or strongly correlated to one that is.

June 23, 2014:

This week sees a rare signal combination. While two funds being signaled for sales in a week happens a few times a year, I can't remember the last time three were. The way to handle this is similar to what is described above. If one owns two funds, and they are two of the three, the February 19 discussion applies directly. If an investor owns all three of the funds to be sold, there are two basic ways to go. One is to move one of them into this week's top-ranked fund, Natural Resources, and the other two to the money market fund. As it turns out the three highest ranked funds this week are not highly correlated. They are Natural Resources, Biotechnology, and Electronics, which have been the top-ranked ones in each of the three most recent weeks. So an exchange of the three to be sold into these three would make sense if one does not want to reduce market exposure.

November 17, 2014:

The first of two money market purchases, the one on October 13, is signaled for an exchange into IT Services. The second purchase, a week later, has not yet been held for the five week minimum period. That minimum avoids the 0.75% charge for selling a Select fund before it has been owned for 30 days. However, that charge does not apply to the money market fund, so there is no need to hold the second purchase for another week. If one wanted to exchange completely out of money market (or even if that had been done earlier when the market rebounded off of its October lows), I would not consider that to be a "violation" of the system rules. Nonetheless, I follow the system exactly in the tables on this site, so the October 20 money market purchase will be held for another week.

I follow the track shown above in a personal account. That track never switched into the money market fund, so I never needed to question the wisdom of exchanging out of money market before it was held for at least five weeks.

December 29, 2014:

We have now completed "2014" (the 52 weeks from 12/30/13 to 12/29/14), so we can see how the system did for the year. In most years there are five to seven trades, and that was essentially the case this year. The seventh trade is still open at the end of the year, but it has already lasted for seven weeks, so it can count as a full trade.

Four of the seven trades did better than the broad market as represented by the Vanguard index fund over the period of the trade. However, the trades that trailed did so by too large of a margin to be overcome by the ones that outperformed the index fund.

The track for the year was profitable, but trailed the index fund. For the 19 years shown in the table, the average yearly performance of the system, with management fees included, is still well above that of the index fund.

There were 49 trades that ended in 2014, including some that started last year. Those included two in the money market fund after stocks dropped sharply in October before recovering quite quickly. Those two trades did far worse than the index fund. Even so, the average system trade did 1.8% better than the index fund for the period of the trade, and 25 of the 49 outperformed the index fund. That indicates that the underperformance of the track was due in part to luck.

Since December 29, 2014 is the closest Monday to the start of 2015, the track for the new year starts with Utilities being purchased now. The 2014 track will continue until Transportation is sold, and I will continue to show its progress. The new track will be shown when either the 2014 track is complete or when Utilities is sold and another Select fund is purchased.

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