2015 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

1/5/15    Natural Gas       2/23/15  IT Services       31.05  32.54   4.8%    4.7%
1/12/15   Construct & Hous  3/9/15   Biotechnology     56.48  58.96   4.4%    2.9%
1/20/15   Biotechnology     5/4/15   Natural Gas     230.33* 246.10   6.8%    5.1%
1/26/15   Biotechnology     5/4/15   Natural Gas     234.22* 246.10   5.1%    3.3%
2/2/15    Natural Resources 3/9/15   Biotechnology     31.08  30.31  -2.5%    3.2%
2/9/15    Natural Resources 3/16/15  Biotechnology     31.62  29.93  -5.3%    1.9%
2/17/15   Natural Gas       3/23/15  Biotechnology     33.57  30.59  -8.9%   -0.1%
2/23/15   IT Services       4/20/15  Natural Gas      37.65*  38.23   1.5%   -0.2%
3/2/15    Biotechnology     5/4/15   Natural Gas     244.09* 264.10   0.8%    0.1%
3/9/15    Biotechnology     5/4/15   Natural Gas     250.28* 264.10  -1.7%    1.9%
3/16/15   Biotechnology     5/4/15   Natural Gas     258.19* 246.10  -4.7%    1.7%
3/23/15   Biotechnology     5/4/15   Natural Gas     260.25* 264.10  -5.4%    0.6%
3/30/15   Pharmaceuticals   5/18/15  Envir & Alt En   39.24*  38.86  -1.0%    2.3%
4/6/15    Energy Service    6/15/15  Banking           55.20  56.57   2.5%    0.6%
4/13/15   Energy Service    6/15/15  Banking           55.73  56.57   1.5%    0.0%
4/20/15   Natural Gas       6/1/15   Biotechnology     34.42  32.44  -5.8%   -0.4%
4/27/15   Energy Service    6/15/15  Banking           58.44  56.57  -3.2%   -0.8%
5/4/15    Natural Gas       6/8/15   Biotechnology     35.14  31.79  -9.5%   -1.1%
5/11/15   IT Services       7/6/15   Biotechnology     39.25  39.65   1.0%   -1.4%
5/18/15   Envir & Alt En    6/29/15  Medical Delivery  20.91  20.30  -2.9%   -3.1%
5/26/15   Biotechnology     8/10/15  Retailing        260.32 267.78   2.9%    0.4%
6/1/15    Biotechnology     8/10/15  Retailing        262.87 267.78   1.9%    0.0%
6/8/15    Biotechnology     8/10/15  Retailing        263.64 267.78   1.6%    1.5%
6/15/15   Banking           8/3/15   Retailing         27.73  27.84   0.4%    0.8%
6/22/15   Banking           8/3/15   Retailing         28.05  27.84  -0.7%   -1.0%
6/29/15   Medical Delivery  8/3/15   Retailing         93.49  92.36  -1.2%    2.1%
7/6/15    Biotechnology     8/10/15  Retailing        272.77 267.78  -1.8%    1.9%
7/13/15   Pharmaceuticals   8/24/15  Utilities         24.62  22.23  -9.7%   -9.6%
7/20/15   Biotechnology     8/24/15  Utilities        294.82 232.86 -20.9%  -10.8%
7/27/15   Software          9/14/15  Electronics      117.83 113.08  -4.0%   -5.2%
8/3/15    Retailing         10/26/15 Electronics      100.61 104.68   4.0%   -0.8%
8/10/15   Retailing         10/26/15 Electronics      101.66 104.68   3.0%   -1.2%
8/17/15   Utilities         10/12/15 Natural Gas       71.54  67.89  -5.1%   -3.7%
8/24/15   Utilities         10/12/15 Natural Gas       67.27  67.89   0.9%    7.5%
8/31/15   Energy Service    10/5/15  Utilites          48.07  45.74  -5.2%    0.9%
9/8/15    Money Market      10/19/15 Energy             1.00   0.00   0.0%    3.5%
9/14/15   Electronics       12/21/15 Materials        69.25*  75.53   9.1%    4.0%
9/21/15   Biotechnology     10/26/15 Electronics      252.19 226.20 -10.3%    5.4%
9/28/15   Consumer Staples  11/2/15  Software          87.97  94.26   7.2%   11.9%
10/5/15   Utilities         11/9/15  Brokerage & Inv   67.13  65.11  -3.0%    4.8%
10/12/15  Natural Gas       11/16/15 Biotechnology     26.41  25.25  -4.4%    2.0%
10/19/15  Energy            11/23/15 Banking           40.30  39.83  -1.2%    2.8%
10/26/15  Electronics       12/21/15 Consumer Staples 74.20*  75.53   1.8%   -2.0%
11/2/15   Software          12/21/15 Consumer Stap   122.28* 120.08  -1.8%   -3.6%
11/9/15   Brokerage & Inv   12/14/15 Consumer Staples  71.53  66.93  -7.8%   -2.5%
11/16/15  Biotechnology     1/11/16  Utilities       226.18* 195.76 -13.4%   -6.0%
11/23/15  Banking           12/28/15 Utilities        26.89*  25.86  -3.8%   -1.3%
11/30/15  Construct & Hous  1/11/16  Utilities        59.44*  54.25  -8.7%   -7.3%
12/7/15   Electronics       1/11/16  Utilities         77.88  68.31 -12.3%   -7.2%
12/14/15  Consumer Staples  3/7/16   Natural Gas      89.73*  92.50   3.1%   -0.5%
12/21/15  Consumer Staples  3/7/16   Natural Gas       90.25  92.50   2.5%    0.1%
12/28/15  Utilities         3/14/16  Natural Gas       64.27  70.06   9.0%   -1.3%

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 12/29/14, the closest Monday to the start of 2015, 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
--------------------------------------------------------------------
12/29/14  Utilities         2/9/15   Natural Res.      -5.2%   -1.9%
2/9/15    Natural Resources 3/16/15  Biotechnology     -5.3%    1.9%
3/16/15   Biotechnology     5/4/15   Natural Gas       -4.7%    1.7%
5/4/15    Natural Gas       6/8/15   Biotechnology     -9.5%   -1.1%
6/8/15    Biotechnology     8/10/15  Retailing          1.6%    1.5%
8/10/15   Retailing         10/26/15 Electronics        3.0%   -1.2%
10/26/15  Electronics       12/21/15 Consumer Staples   1.8%   -2.0%
12/21/15  Consumer Staples  Still held as of 12/28/15   1.8%    2.3%
---------------------------------------------------------------------
Total return as of 12/28/15                           -16.1%    1.2%
    accounting for maximum 2% annual management fee   -18.1%

The calculation for the total return for the track is:
 (0.948)(0.947)(0.953)(0.905)(1.016)(1.030)(1.018)(1.018) - 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%       2014 Weekly Trade List
2015          -16.1%            1.2%
              ------          ------
Average(96-15) 15.2%           9.7%

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)

December 28, 2015:

The "year" 2015 (actually the 52 weeks from 12/2/14 to 12/28/15) has now be completed. There were seven completed trades plus the first week of an eighth one. The first four were losers that did much worse than the broad market index fund. Although the next three were profitable and outperformed the index fund, the gap was far too wide to be closed. The first two weeks of the last trade, like the index fund, are down a little.

The difference between the returns for the track shown and the index fund is certainly bothersome, even for a trading method that is hardly adverse to risk. To some extent, it due to "bsd luck" in the particular starting date. To get a more comprehensive evaluation, there were 54 possible weekly trades that were completed in 2015, some that started in 2014. Of those, 26, slightly less than half, did better than the index fund over the period of the trade. The average difference in returns was 1.6% in favor of the index fund. Not as bad as the track, but hardly a year to brag about.

Even with the very bad 2015, the average return of the 20 year period, 1996-2015, is still strongly in favor of Selects Switching. It is significant that the trading method and parameters have been the same over the period and were established in 1995. Consequently, it is a meaningful "out-of-sample" validation of the method. The standard disclaimers point out that past performance is no guarantee of future results and there can be no assurance the method will be profitable in the future. Unfortunately, the latter was too evident in 2015.

The track shown above will continue to be shown until the current open trade has been completed, which is at least four weeks away due to the five week minimum holding period. The 2016 track starts next week. The new track will be displayed either when the 2015 one is completed or when the first fund bought is sold and switched into another Select fund.

February 17, 2015:

There is a unusual, but not unprecedented situation this week. Natural Gas is signaled for selling, but it is also the top-ranked fund. That is due to the extreme volatility in the energy sector over the past few months.

In a case like this, the procedure is not to sell, but continue to hold the fund signaled for selling, Natural Gas. If that fund is signaled for a sell when the next Friday's data are incoporated and it is no longer the top-ranked fund, then it would be exchanged into the new top-ranked fund. If Natural Gas is purchased this week, it would be subject to the five week minimum holding period.

Go to Implementation Issues

Return to the SelectsPage

Return to the Managed Accounts Page

Return to the Investing Page

Return to the Home Page