How Does the Sector Rotation System Work? The Sector Rotation System newsletter uses a proprietary rating system to rank Fidelity Select (Sector) mutual funds based on their recent price momentum. The Fidelity sector fund that has shown the highest momentum gain would get a rank of “1” while the fund with the worst momentum gain/loss would be ranked “42”.
We then use the momentum rankings to create and maintain a model portfolio. Our model portfolio invests in 10 Fidelity sector funds at all times.
Our newsletter reviews the portfolio weekly and sells any fund that has been held for a minimum of 30 days (this is to avoid Fidelity’s short term trading penalty) and is no longer ranked in the top 10 of our ranking system. We invest all proceeds from weekly fund sales into the highest ranked funds that are not currently held in the portfolio. For example if we sell 3 funds we would replace them with the 3 highest ranked funds not already in the portfolio.
By following the system we are constantly rotating out of funds that are loosing momentum and into funds that are currently showing the most momentum.
What are the benefits to using the Sector Rotation System newsletter? One of the biggest benefits of this system in our opinion is that it eliminates the human emotions that are typically involved with buy and sell decisions.
Our Fidelity newsletter does not allow an investor to stick with a Fidelity Sector fund that is falling faster than other funds with the hope that it will turn around.
For example, in 2000 when Fidelity Technology sector funds started to drop many investors continued to hold them with the hope that they would rebound. Unfortunately those investors were wrong and subsequently lost a lot of money. If they followed the Sector Rotation System newsletter they would have sold the Fidelity technology oriented funds due to their low momentum rank.
Another major benefit of the Sector Rotation System is that it quickly identifies which sectors have the greatest momentum. By identifying these funds early you have the opportunity to invest in them on the way up before the rally is over. Most investors are usually late and miss most of the gains.
What does the Sector Rotation System newsletter cost? We have subscriptions for as little as $65. You can see our current subscription rates here.
Will I always make money? The system does not guarantee that every purchase will make money. The whole idea of the system is to invest your money in the sectors that are performing better than the others and avoid the funds that are not.
Can I see a sample issue before giving my information? To see a recent issue of the newsletter click here.
How do I sign up? To receive the newsletter weekly you can subscribe using the form here
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If you have any questions you can call toll free (877) 905-2643.
The Sector Rotation System newsletter is a newsletter focused on Fidelity sector mutual funds. The system was developed by Lange Asset Management and is not associated with Fidelity Investments.
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