Trading
Indexes Newsletter 2006-1
January 18, 2006
FTI Staff
FTI System Trades and Returns for 2005
Actual Trades Using Guided Approach
The following are the lists of trades and results for 2005 for each of the
portfolios in the FTI Guided Approach. Included are trades for the
Brokerage-Available portfolio, the trades for the fund company portfolios
(Fidelity, T. Rowe Price, and Vanguard), and the trades for the annuities
(Fidelity VIP/VALIC). The trades can be verified from the FTI reports and/or
TI lists available to members.
Each strategy is assumed to have started with $100,000 on 12/31/04. We
use Fidelity for the brokerage account. Fidelity charges a short term
trading fee of $75 each time you sell or exchange shares of No Transaction Fee
(NTF) funds held less than 180 days (short-term trade). When a trade is
signaled for a mutual fund in a brokerage account, we assume that the sale is
made on the Monday following the trade signal and the proceeds (minus the
trading fee) used to buy the new fund on Tuesday. For individual mutual
fund accounts and annuities, the sale and subsequent purchase are both made on
Monday.
The year-to-date gains/losses are shown in percent at each transaction point to
mark the progress of each portfolio.
Brokerage-Available Portfolio:
|
12/31 |
|
Holding
BARAX at $52.52 |
1904.037
shares |
$100,000.00 |
|
|
|
1/24 |
|
Sell
BARAX at $50.52 |
1904.037
shares |
$96,191.93 |
|
|
|
1/25 |
|
Buy IEGCX
at $15.83 |
6076.559
shares |
$96,191.93 |
|
-3.81% |
|
4/18 |
|
Sell
IEGCX at $16.10 |
6076.559
shares |
$97,757.60 |
|
|
|
4/19 |
|
Buy BRPIX
at $32.46 |
3011.633
shares |
$97,757.60 |
|
-2.24% |
|
5/23 |
|
Sell
BRPIX at $31.34 |
3011.633
shares |
$94,309.57 |
|
|
|
5/24 |
|
Buy TGCNX
at $18.28 |
5159.167 shares |
$94,309.57 |
|
-5.69% |
|
7/5 |
|
Sell
TGCNX at $18.09 |
5159.167
shares |
$93,254.33 |
|
|
|
7/6 |
|
Buy SSMGX
at $28.28 |
3297.536
shares |
$93,254.33 |
|
-6.75% |
|
10/17 |
|
Sell
SSMGX at $29.81 |
3297.536
shares |
$98,224.56 |
|
|
|
10/18 |
|
Buy BEARX
at $5.69 |
17262.664
shares |
$98,224.56 |
|
-1.78% |
|
11/7 |
|
Sell
BEARX at $5.44 |
17262.664
shares |
$92,894.80 |
|
1%
redemption fee |
|
11/8 |
|
Buy TGCNX
at $19.67 |
4722.664
shares |
$92,894.80 |
|
-7.11% |
|
12/27 |
|
Sell TGCNX
at $20.18 |
4722.664
shares |
$94,275.33 |
|
1%
redemption fee |
|
12/28 |
|
Buy PGERX
at $18.97 |
4969.706
shares |
$94,275.33 |
|
-5.72% |
|
12/30 |
|
Holding
PGERX at $18.83 |
4969.706
shares |
$93,579.57 |
|
-6.42% |
|
12/31 |
|
Holding
FIEUX at $34.15 |
2928.258
shares |
$100,000.00 |
|
|
|
5/2 |
|
Sell
FIEUX at $34.12 |
2928.258
shares |
$99,912.15 |
|
|
|
5/2 |
|
Buy FDRXX
at $1.00 |
99912.152
shares |
$99,912.15 |
|
-0.09% |
|
5/23 |
|
Sell
FDRXX at $1.00 |
100065.750
shares |
$100,065.75 |
|
shares
increased by distribution |
|
5/23 |
|
Buy FDGRX
at $55.45 |
1804.612
shares |
$100,065.75 |
|
0.07% |
|
8/15 |
|
Sell
FDGRX at $58.20 |
1804.612
shares |
$105,028.43 |
|
|
|
8/15 |
|
Buy FOSFX
at $37.91 |
2770.468
shares |
$105,028.43 |
|
5.03% |
|
10/24 |
|
Sell
FOSFX at $37.16 |
2770.468
shares |
$102,950.58 |
|
|
|
10/24 |
|
Buy FDRXX
at $1.00 |
102950.583
shares |
$102,950.58 |
|
2.95% |
|
10/31 |
|
Sell
FDRXX at $1.00 |
103020.074
shares |
$103,020.07 |
|
shares
increased by distribution |
|
10/31 |
|
Buy FEXPX
at $20.90 |
4929.190
shares |
$103,020.07 |
|
3.02% |
|
12/19 |
|
Sell
FEXPX at $21.28 |
5100.979
shares |
$108,548.83 |
|
shares
increased by distribution |
|
12/19 |
|
Buy FPBFX
at $25.36 |
4366.405
shares |
$108,548.83 |
|
8.55% |
|
12/31 |
|
Holding
FPBFX at $25.67 |
4366.405
shares |
$112,085.62 |
|
12.09% |
T. Rowe Price Funds:
|
12/31 |
|
Holding
PRESX at $19.90 |
5025.126
shares |
$100,000.00 |
|
|
|
5/2 |
|
Sell
PRESX at $19.48 |
5025.126
shares |
$97,889.45 |
|
|
|
5/2 |
|
Buy PRULX
at $12.09 |
8096.728
shares |
$97,889.45 |
|
-2.11% |
|
6/20 |
|
Sell
PRULX at $12.22 |
8148.603
shares |
$99,575.93 |
|
* shares
increased by distribution |
|
6/20 |
|
Buy PRDSX
at $12.95 |
7689.261
shares |
$97,730.51 |
|
-2.27% |
|
9/6 |
|
Sell
PRDSX at $13.53 |
7689.261
shares |
$102,995.34 |
|
|
|
9/6 |
|
Buy PSILX
at $11.11 |
9270.508
shares |
$102,995.34 |
|
3.00% |
|
10/24 |
|
Sell
PSILX at $10.82 |
9270.508
shares |
$98,300.76 |
|
2%
redemption fee |
|
10/24 |
|
Buy TSCXX
at $1.00 |
98300.759
shares |
$98,300.76 |
|
-1.70% |
|
11/7 |
|
Sell TSCXX
at $1.00 |
98434.267
shares |
$98,434.27 |
|
shares
increased by distribution |
|
11/7 |
|
Buy PRGSX
at $18.51 |
5317.897
shares |
$98,434.27 |
|
-1.57% |
|
12/31 |
|
Holding
PRGSX at $19.37 |
5411.677
shares |
$104,824.18 |
|
4.82%, shares
increased by dist. |
* Re-invested shares for dividends
for PRULX from 6/1/05 to 6/20/05 were not recorded in our 6/18/05 FTI
report. The correction results in a
year-end return about 0.2% higher than the 12/31/05 report indicates. FTI Reports through 12/31/05 have not been
updated to include this correction.
Vanguard:
|
12/31 |
|
Holding
VEIEX at $14.68 |
6811.989
shares |
$100,000.00 |
|
|
|
4/18 |
|
Sell VEIEX
at $14.31 |
6811.989
shares |
$97,479.56 |
|
|
|
4/18 |
|
Buy VWESX
at $9.65 |
10101.509
shares |
$97,479.56 |
|
-2.52% |
|
6/20 |
|
Sell
VWESX at $9.82 |
10193.292
shares |
$100,098.13 |
|
* shares
increased by distribution |
|
6/20 |
|
Buy VSEQX
at $22.33 |
4482.67495
shares |
$100,098.13 |
|
0.10% |
|
8/8 |
|
Sell
VSEQX at $22.84 |
4482.675
shares |
$102,384.30 |
|
|
|
8/8 |
|
Buy VEIEX
at $16.85 |
6076.21934
shares |
$102,384.30 |
|
2.38% |
|
10/17 |
|
Sell
VEIEX at $17.02 |
6076.21934
shares |
$102,900.17 |
|
0.5%
redemption fee |
|
10/17 |
|
Buy VPACX
at $10.25 |
10039.04067
shares |
$102,900.17 |
|
2.90% |
|
12/31 |
|
Holding
VPACX at $11.34 |
10180.063
shares |
$115,441.92 |
|
15.44% |
* Re-invested shares for dividends for VWESX from 6/1/05 to 6/20/05 were not recorded in our 6/18/05 FTI report. The correction results in a year-end return about 0.3% higher than the 12/31/05 report indicates. FTI Reports through 12/31/05 have not been updated to include this correction.
Fidelity VIP:
|
12/31 |
|
Holding
FAMEE at 13.382093 |
7472.67262
shares |
$100,000.00 |
|
|
|
4/18 |
|
Sell
FAMEE at 13.162500 |
7472.67262
shares |
$98,359.05 |
|
|
|
4/18 |
|
Buy FAVMM
at 19.374693 |
5076.67675
shares |
$98,359.05 |
|
-1.64% |
|
5/9 |
|
Sell
FAVMM at 19.371000 |
5076.67675
shares |
$98,340.31 |
|
|
|
5/9 |
|
Buy FAMMT
at 17.480000 |
5625.87559
shares |
$98,340.31 |
|
-1.66% |
|
7/11 |
|
Sell
FAMMT at 18.180000 |
5625.87559
shares |
$102,278.42 |
|
|
|
7/11 |
|
Buy FAWSC
at 12.300000 |
8315.31855
shares |
$102,278.42 |
|
2.28% |
|
8/8 |
|
Sell
FAWSC at 11.990000 |
8315.31855
shares |
$99,700.67 |
|
|
|
8/8 |
|
Buy FAMEE
at 15.420000 |
6465.67246
shares |
$99,700.67 |
|
-0.30% |
|
12/31 |
|
Holding
FAMEE at 17.878676 |
6465.67246
shares |
$115,597.66 |
|
15.60% |
VALIC:
|
12/31 |
|
Holding
Fund 67 at 0.5778 |
173070.5661
shares |
$100,000.00 |
|
|
|
1/10 |
|
Sell Fund
67 at 0.56146 |
173070.5661
shares |
$97,172.55 |
|
|
|
1/10 |
|
Buy Fund
33 at 1.32926 |
73102.6285
shares |
$97,172.55 |
|
-2.83% |
|
5/23 |
|
Sell Fund
33 at 1.39546 |
73102.6285
shares |
$102,011.72 |
|
|
|
5/23 |
|
Buy Fund
46 at 0.44406 |
229725.0841
shares |
$102,011.72 |
|
2.01% |
|
6/27 |
|
Sell Fund
46 at 0.43161 |
229725.0841
shares |
$99,150.72 |
|
|
|
6/27 |
|
Buy Fund
66 at 0.64218 |
154397.3326
shares |
$99,150.72 |
|
-0.85% |
|
12/19 |
|
Sell Fund
66 at 0.73966 |
154397.3326
shares |
$114,201.53 |
|
|
|
12/19 |
|
Buy Fund
33 at 1.68344 |
67838.3159
shares |
$114,201.53 |
|
14.20% |
|
12/31 |
|
Holding
Fund 67 at 0.577799 |
67838.3159
shares |
$117,704.03 |
|
17.70% |
Summary for 2002-2005:
|
|
|
|
|
|
2004-2005 |
2002-2005 |
|
Brokerage/Fund
Company Returns |
2005 |
2004 |
2003 |
2002 |
Avg. Returns |
Avg. Returns |
|
Brokerage |
-6.42% |
-16.80% |
60.70% |
17.10% |
-11.61% |
13.65% |
|
Fidelity |
12.09% |
19.90% |
N/A |
N/A |
16.00% |
N/A |
|
T. Rowe
Price |
4.82% |
7.60% |
N/A |
N/A |
6.21% |
N/A |
|
Vanguard |
15.44% |
7.60% |
N/A |
N/A |
11.52% |
N/A |
|
Annuity
Returns |
|
|
|
|
|
|
|
Fidelity
VIP |
15.60% |
3.00% |
59.40% |
3.90% |
9.30% |
22.10% |
|
VALIC
403b |
17.70% |
8.30% |
38.70% |
13.40% |
13.00% |
20.10% |
Average of 6 FTI Portfolios |
9.87% |
4.93% |
|
|
7.40% |
|
|
|
|
|
|
|
|
|
|
Market
Indexes |
|
|
|
|
|
|
|
DJIA |
-0.61% |
3.10% |
25.30% |
-16.80% |
1.25% |
2.75% |
|
S&P
500 |
3.00% |
9.00% |
26.40% |
-23.40% |
6.00% |
3.75% |
|
NASDAQ |
1.37% |
8.60% |
50.00% |
-31.50% |
4.99% |
7.12% |
|
Russell
2000 |
3.32% |
17.00% |
45.40% |
-21.60% |
10.16% |
11.03% |
|
Midcap
400 |
11.27% |
15.16% |
34.02% |
-15.45% |
13.22% |
11.25% |
Discussion:
For 2005, the average return of our 6 portfolios was 9.87%, which solidly beat
all major market indexes except the Midcap 400, which edged our return by
1.4%. The 4-year average return of the
brokerage portfolio, which we have been tracking since 2002, exceeds that of
all major market indexes. The FTI
System excels the most when there are strong trends in the market. 2005 was another sideways market to a large
degree, yet we still were able to beat most market indexes.
Our brokerage return again lagged behind the fund company returns for 2005. A major reason for this is availability and use of bear funds, which resulted in 8.78% in losses. If we had instead put our money in a money market fund, our brokerage return would be +2.36%, with the 6-fund average return being 11.34%. Although we don’t discourage the use of bear funds, they are not for the risk averse, since a quick turn in the market can result in a “double loss” against the market indexes. These funds work very well when there are pronounced trends in the market, as we saw through much of the 90’s and through 2003, and tend to not work as well in a choppy sideways market, as we have seen more recently. We will continue to track these funds and endorse their usage, but we don’t recommend using them exclusively for anyone who is the least bit risk averse.
Newsletters 2003-14 and 2003-15, on "Choices and the
Time Value of Money" are good reading to see what a few percentage points difference
in annual returns on investments can make in the long run. Past
newsletters are available at:
http://www.fundtradingindexes.com/historical.htm.
To
subscribe to the Weekly Trading Indexes and/or buy the book, click on www.fundtradingindexes.com and follow the instructions.
FTI Staff
Fund Trading Indexes