Using Sector Funds to Construct Diversified Mutual Fund Portfolios. 3 Tips For Dealing With Dog Emergencies.
&Sector funds are too risky.' &I doubled my money with Fidelity Select Technology in 12 months!' &Avoid sector funds.' If all of this sounds confusing, you are not alone. Sector funds are among the more misused and misunderstood investments. So, how should you use sector funds?
Before looking at one of the uses of sector funds in detail, let's review what sector funds really are: Sector funds confine their investments to a particular sector of the economy. Fidelity Select Healthcare (NDQ: FSPHX) is an example of a sector fund. By focusing on stocks of companies in the healthcare sector, the price moves of this fund are more dependent on factors that impact the healthcare sector rather than the economy as a whole. Demographic change, such as increasing age of the population, is an example of a factor that particularly drives investments in healthcare. By diversifying its assets across over 60 companies within the healthcare sector, Fidelity Select Healthcare provides investors with the opportunity to benefit from secular trends driving the demand for healthcare while mitigating company-specific risks such as failure of clinical trials conducted by a particular company.
Let's now look at a high-potential approach of using sector funds.
Using sector funds to create a diversified mutual fund portfolio By allocating assets across a group of sector funds, investors can effectively create a diversified mutual fund portfolio using sector funds. This approach gives the investor flexibility to over-weight or under-weight certain sectors versus broadly diversified indexes such as the S&P 500�½.To implement this active approach to money management, it helps to have a diverse group of sector funds to choose from. Fidelity Investments manages 41 sector funds under the Fidelity Select Portfolios�½ umbrella which makes this family of sector funds well-suited for this purpose. By dividing assets across, say, 8 sector funds in the Fidelity Select Portfolios, e.g., Fidelity Select Biotechnology (NDQ: FBIOX), Fidelity Select Computers (NDQ: FDCPX), Fidelity Select Energy Service (NDQ: FSESX), Fidelity Select Home Finance (NDQ: FSVLX), Fidelity Select Medical Delivery (NDQ: FSHCX), Fidelity Select Multimedia (NDQ: FBMPX), Fidelity Select Retailing (NDQ: FSRPX), and Fidelity Select Wireless (NDQ: FWRLX), one can build a customized diversified portfolio. With each of the sector fund managers actively scouting for the best investment ideas within their sectors, this cluster of Fidelity Select Portfolios packs a lot of power into your diversified portfolio.
Other mutual fund families that provide a relatively wide choice of sector funds include ProFunds and Rydex Funds. Exchange traded sector funds such as Select Sector SPDRs, iShares, and Sector HOLDRS, that trade on the American Stock Exchange, can also be used to construct diversified sector fund portfolios.
The wide selection of sector funds available provides you with the ability to take advantage of changing market conditions and continually optimize the risk-reward characteristics of your diversified portfolio. To employ this approach effectively, you need to understand and follow the dynamics of the individual sectors. You must also be able to make informed decisions on sectors to select and sectors to avoid. At the end of the day, you should be right more often than wrong with the sectors you select.
AlphaProfit.com's research suggests that by constructing diversified mutual fund portfolios using sector funds, investors have the potential to outperform the market averages on the basis of relative returns as well as risk-adjusted returns.
The track-record of AlphaProfit's model portfolios indicates the potential of this approach.
A Caveat
Diversification is one of the cornerstone principles of mutual fund investing. Sector funds that focus on high-growth sectors or narrow niches of the economy tend to be volatile. It is generally not advisable to commit a substantial portion of your total assets to a single sector fund. Maintaining adequate diversification across sectors in your overall mutual fund portfolio is good investing practice.
Key Points to Remember
1. Sector funds are investment vehicles that focus their investments on a particular sector or industry group. Sector funds provide investors with an opportunity to profit from trends impacting a particular sector or industry while reducing company-specific risks.
2. High-potential diversified portfolios can be constructed by dividing assets among a group of sector funds. This active investment approach requires investors to make informed decisions on sector selection. The power-packed cluster of sector funds may offer investors the potential to outperform the market averages.
3. Diversifying mutual fund portfolios across sectors is good investing practice.
Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind.
AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by applying any of the information in this report.The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Past performance is neither an indication of nor a guarantee for future results. No part of this document may be reproduced in any manner without written permission of AlphaProfit Investments, LLC. Copyright © 2004 AlphaProfit Investments, LLC. All rights reserved.
About The Author
Sam Subramanian, PhD, MBA is Managing Principal of AlphaProfit Investments, LLC. Sam developed the ValuM(tm) Investment Process for managing investments. He edits the AlphaProfit Sector Investors' Newsletter(tm). For the 5 year period ending December 31, 2003, AlphaProfit model portfolios increased by up to 288%, a compound annual return rate of 31%. To learn more about AlphaProfit and to subscribe to the FREE newsletter, visit: http://www.alphaprofit.com
Article Source: http://EzineArticles.com/
Have you ever thought about what you need to do should your dog - or another dog - ever suffer a serious, life-threatening injury? What if they have a severe allergy to an insect bite or a bee sting? It's great to know your vet's phone number, but what if something happens during off hours? What if you don't know where the closest emergency animal clinic is located?
Augh! Enough with the questions already, right? Any emergency is stressful and scary, and one involving that furry little four-legged member of your family is no exception. The toughest of owners can be instantly reduced to helpless balls of mush if something's wrong with their dogs and they can't figure out what to do.
1. Preparation is key.
The key to getting through a veterinary emergency is preparation. You may think you have that covered with a first aid kit and having the phone number to your vet handy, but what if there isn't enough time to move your dog? You need to be well-versed in some of the more common animal emergencies just in case a situation ever arises. And hey, if a situation never arises, you'll still feel more confident knowing that you have the ability to deal with one.
2. Know how to care for wounds.
Did you know that you shouldn't use hydrogen peroxide on a bleeding wound? Nope. It slows clotting to the area, which means your dog could actually lose more blood than he would if you didn't use the peroxide at all. In fact, the best way to treat a deep, severely bleeding wound is to apply a clean cloth and hold it in place for five minutes, then tape the cloth to the wound. That original cloth should never be removed - that also slows clotting - and should instead be layered with more clean cloths if blood soaks through.
3. Know what to do about poisoning.
Did you know that certain varieties of toads, salamanders, newts, and other amphibians are poisonous if licked? Hey, guess who loves to hold little woodland critters in his mouth! Your dog. If you notice your pup drooling, whining, and wiping at his mouth after a trip into the forest, get him to a clean water source and rinse his mouth thoroughly. While the poison can be fatal if left in the mouth, it's fairly easy to cleanse from the tongue and glands.
Now imagine all of the scenarios that can happen to your dog, from fractured limbs to choking and everything in between. Do you really want to risk not knowing how to handle them? You don't have to anymore, since I've written Secrets to a Healthy and Happy Pooch to help you learn how to cope with nearly any emergency as well as have the basis for handling all of the everyday and lifelong problems and situations you'll face with your dog. From choosing toys to cancer and everything in between, it's all in the book... as well as how to create the most effective first aid kit and handle the most common emergencies. Listen, even the most experienced dog owner needs a little help and advice now and then.
Secrets to a Healthy and Happy Pooch is that constant source of help and advice.
Mark Eckenrode is a lover of dogs, his own is named Ryker. Mark also offers free step-by-step tips on how to spoil your dog, cook up delicious dog recipes, insights into health, and communicating with your dog.
"Finally! A Quick and Easy Way For YOU to Learn Exactly What Your Dog is Looking For... Without Being a Vet, Visiting an Animal Shrink, or Paying Outrageous Prices for Dog Toys!" http://www.DogMatters.com
Mark Eckenrode is a lover of dogs and owner of http://www.DogMatters.com
Article Source: http://EzineArticles.com/
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