Fidelity funds supermarket investment strategy

tejero23f

I started investing in April this year, my only strategy is to use the Money Observer investment funds tables on past performance from 6 months to 3 years.

I don’t read any details of funds or try to work out the next move, it’s purely on the figures and the rising charts

My intention is to as you might say ride the wave in different sectors by switching to rising funds.

After 6 months I have switched out of 3 funds –Aberdeen emergingMkts, Aberdeen Japan and Fidelity American S/sits, they having achieved nogrowth and all down on the bid price.

My other choices in the uk smaller companies, uk equitiesand uk all comps are all on the rise. I am giving newton Asian income a little longer.

The strategy so far is working as I’m over 2k up on a 40k investment in 6 months.

I would appreciate any comments on this strategy

BarleyGB

This is pretty much my strategy, except I use past Barclays Stockbrokers website.

I look at performance averages over the last 3, 6, 12 and 36 months and look for consistant funds that appear in the top 10.

So far its yeilded pretty good results, expecially Fidelity UK Smaller Companies which has doubled in 18 months. Many of my other investments are in UK Smaller Co funds which have also doing well.

Im pretty exposed to UK Smaller Co funds across the fund based part of my portfolio but am loathe to diversify as they so far pretty consistant performers.

Another good fund I picked out using the above method is AXA Framlington Biotech. My only bad pick to date is a Japan fund.

Ive not even swithed any fund monies around yet as all my picks have been doing so well.


DISCLAIMER: Ive probably no more idea than you, just going by feel.

barak

tejero23f wrote: »

..... FONT=Times New Roman]I would appreciate any comments on this strategy[/FONT]

I don't like your strategy at all! Jumping in and out of funds is not the way to make long term gains of both capital and income.

Marazan

This seems like the very definition of buying high and selling low.

M.R.W.

tejero23f wrote: »

After 6 months I have switched out of 3 funds –Aberdeen emergingMkts, Aberdeen Japan and Fidelity American S/sits, they having achieved nogrowth and all down on the bid price.

The strategy so far is working as I’m over 2k up on a 40k investment in 6 months.

Hi there,

I would have to agree with Barak's post above; switching out of funds after only 6 months is too short-term in my opinion. Remember that fund managers aim to delivery returns over a 3 - 5 year period as an absolute minimum.

I appreciate that the 'quick switch and gain' strategy has worked for you so far, and I'm glad that it has! But my comments would be to slow down and invest for a longer term.

Matt

grey_gym_sock

the fact that you're making money doesn't prove that your strategy is working. you need to compare your return to an appropriate benchmark.

choosing a appropriate benchmark may be tricky. if you're buying lots of more volatile funds (e.g. smaller companies, or emerging markets), then your benchmark should also include a higher proportion of volatile areas.

actually, this gets really difficult to work out. there are a few different things going on.

there are different returns from small and big companies.

there is some evidence that momentum investing can work - i.e. that the same investment niche will continue to do well (until it doesn't). but there isn't any good evidence for "hot hands" - i.e. the the same investment manager will continue to add value. if you switch funds, are you trying to follow momentum in investment area that are doing well, or to follow successful (so far) managers, or a bit of both? and what timescale do you use to judge momentum?

it all sounds very difficult to me. much easier to concentrate on keeping costs down. that i can understand.

marathonic

Marazan wrote: »

This seems like the very definition of buying high and selling low.

I agree. Reading this thread has gave me a potential investment strategy to investigate for purchasing individual shares:

• Turn the table upside down and look at the worst performing funds in the smaller companies sector over the past 1-3 years
• Analyse the poorest performers top 10 holdings to see whether their are any companies that look good value, but have been brought down by people exiting the fund as opposed to some underlying fundamental problem

I must have a look into this early next year when I start with individual shares.

ChesterDog

You'll be bored with hearing this stuff by now... :-)

The trouble is you're using a non-speculative, long-term investment vehicle in a speculative, short-term way.

You might do okay, or even well. But you probably won't continue to do so.

Pick something good in the first place and leave it to do it's job, is my viewpoint.

Marazan

ChesterDog wrote: »

The trouble is you're using a non-speculative, long-term investment vehicle in a speculative, short-term way.

The problem is he's trying to time the market.

tejero23f

Thank youfor all your replies and ideas, yes 6 months does seem a short period to bailout in long term investments but there has to be a time period when you cannotsustain a losing or going nowhere fund especially when others are rising in theopposite direction. (My sister has been hanging on JPM natural resources foryears always waiting for an upturn).

I justintend to watch the trends and movements through the sectors and take actionaccordingly…and of course a little luck!

jimjames

tejero23f wrote: »

Thank youfor all your replies and ideas, yes 6 months does seem a short period to bailout in long term investments but there has to be a time period when you cannotsustain a losing or going nowhere fund especially when others are rising in theopposite direction. (My sister has been hanging on JPM natural resources foryears always waiting for an upturn).

I justintend to watch the trends and movements through the sectors and take actionaccordingly…and of course a little luck!

The whole idea of a balanced portfolio is that different investments move differently at times. Rather than bailing out I've been adding to the ones that have dropped as I think they are good long term.

If there is a good reason such as natural resources then that may be a reason to not top up but I don't think that applies to the whole emerging regions.

I had doubts about Fidelity Special Values a couple of years ago, sold some and kept the rest. They went up 63% in the last 12 months proving to me that I really need to hold my nerve better sometimes!