Trading
Indexes Newsletter 2008-1
January 17, 2008
FTI Staff
FTI System Trades and Returns for 2007
Actual Trades Using Guided Approach
The following are the lists of trades and results for 2007 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 portfolio starts with $100,000 on 12/31/06. 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, the sale is made on the Monday following the trade
signal and the proceeds (minus the trading fee) are 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.
We’ve made a few corrections to the
T. Rowe Price and Vanguard records that had not been listed at the time of the
weekly reports. In Vanguard, we added a
0.5% redemption fee previously not recorded and subtracted a 0.5% fee
erroneously recorded in an early transaction.
We also added in share increases from distributions for bond funds in
each portfolio.
Brokerage-Available Portfolio:
|
12/31 |
|
Holding
GCHCX at $19.25 |
5194.805
shares |
$100,000.00 |
|
|
|
3/5 |
|
Sell
GCHCX at $18.02 |
5194.805
shares |
$92,599.29 |
|
1%
redemption fee |
|
3/6 |
|
Buy BEARX
at $5.86 |
15801.926
shares |
$92,599.29 |
|
-7.40% |
|
3/26 |
|
Sell
BEARX at $5.79 |
15801.926
shares |
$90,503.22 |
|
1%
redemption fee |
|
3/27 |
|
Buy HRVIX
at $29.15 |
3104.742
shares |
$90,503.22 |
|
-9.50% |
|
5/7 |
|
Sell
HRVIX at $30.21 |
3104.742
shares |
$93,719.25 |
|
|
|
5/8 |
|
Buy IASMX
at $19.06 |
4917.064
shares |
$93,719.25 |
|
-6.28% |
|
8/20 |
|
Sell
IASMX at $20.57 |
4917.064
shares |
$101,069.01 |
|
|
|
8/21 |
|
Buy BRPIX
at $26.46 |
3819.691
shares |
$101,069.01 |
|
1.07% |
|
8/27 |
|
Sell
BRPIX at $26.13 |
3819.691
shares |
$99,733.51 |
|
|
|
8/28 |
|
Buy USCOX
at $12.91 |
7725.292
shares |
$99,733.51 |
|
-0.27% |
|
11/19 |
|
Sell
USCOX at $15.76 |
7725.292
shares |
$120,458.09 |
|
1%
redemption fee |
|
11/20 |
|
Buy BEARX
at $6.59 |
18278.921
shares |
$120,458.09 |
|
20.46% |
|
12/10 |
|
Sell
BEARX at $6.17 |
18278.921
shares |
$111,578.13 |
|
1%
redemption fee |
|
12/11 |
|
Buy SDMGX
at $30.00 |
3719.271
shares |
$111,578.13 |
|
11.58% |
|
12/31 |
|
Holding
SDMGX at $29.27 |
3759.761
shares |
$116,725.02 |
|
10.05%
(shares increased by dist.) |
|
12/31 |
|
Holding
FEQIX at $58.55 |
1707.942
shares |
$100,000.00 |
|
|
|
2/26 |
|
Sell
FEQIX at $60.27 |
1707.942
shares |
$102,937.66 |
|
|
|
2/26 |
|
Buy FDSCX
at $22.61 |
4552.749
shares |
$102,937.66 |
|
2.94% |
|
7/23 |
|
Sell
FDSCX at $24.87 |
4552.749
shares |
$113,226.87 |
|
|
|
7/23 |
|
Buy FPBFX
at $34.26 |
3304.929
shares |
$113,226.87 |
|
13.23% |
|
8/20 |
|
Sell
FPBFX at $29.15 |
3304.929
shares |
$94,893.61 |
|
1.5%
redemption fee |
|
8/20 |
|
Buy SPRXX
at $1.00 |
94893.605
shares |
$94,893.61 |
|
-5.11% |
|
8/27 |
|
Sell
SPRXX at $1.00 |
94959.258
shares |
$94,959.26 |
|
shares
increased by interest |
|
8/27 |
|
Buy FDFFX
at $24.59 |
3861.702
shares |
$94,959.26 |
|
-5.04% |
|
12/31 |
|
Holding
FDFFX at $28.19 |
3896.873
shares |
$109,852.84 |
|
9.85%
(shares increased by dist.) |
T. Rowe Price Funds:
|
12/31 |
|
Holding
PRGSX at $22.64 |
4416.961
shares |
$100,000.00 |
|
|
|
3/5 |
|
Sell
PRGSX at $22.13 |
4416.961
shares |
$97,747.35 |
|
|
|
3/5 |
|
Buy PRULX
at $11.59 |
8433.766
shares |
$97,747.35 |
|
-2.25% |
|
3/26 |
|
Sell
PRULX at $11.44 |
8456.739
shares |
$96,745.09 |
|
shares
increased by dist. |
|
3/26 |
|
Buy PRESX
at $21.11 |
4582.903
shares |
$96,745.09 |
|
-3.25% |
|
7/30 |
|
Sell PRESX
at $22.12 |
4582.903
shares |
$101,373.82 |
|
|
|
7/30 |
|
Buy PRULX
at $11.19 |
9059.323
shares |
$101,373.82 |
|
1.37% |
|
9/24 |
|
Sell
PRULX at $11.33 |
9119.796
shares |
$103,327.29 |
|
shares
increased by dist. |
|
9/24 |
|
Buy PRGSX
at $26.15 |
3951.330
shares |
$103,327.29 |
|
3.33% |
|
11/26 |
|
Sell
PRGSX at $25.78 |
3951.330
shares |
$99,827.99 |
|
2%
redemption fee |
|
11/26 |
|
Buy PRULX
at $12.21 |
8175.921
shares |
$99,827.99 |
|
-0.17% |
|
12/31 |
|
Holding
PRULX at $11.95 |
8208.293
shares |
$98,089.11 |
|
-1.91%
(shares increased by dist.) |
Vanguard:
|
12/31 |
|
Holding
VEIEX at $24.27 |
4120.313
shares |
$100,000.00 |
|
|
|
3/5 |
|
Sell
VEIEX at $22.45 |
4120.313
shares |
$92,038.52 |
|
0.5%
redemption fee |
|
3/5 |
|
Buy VWESX
at $9.41 |
9780.927
shares |
$92,038.52 |
|
-7.96% |
|
3/26 |
|
Sell
VWESX at $9.25 |
9780.927
shares |
$90,292.25 |
|
shares
increased by dist. |
|
3/26 |
|
Buy VPACX
at $13.18 |
6887.836
shares |
$90,781.68 |
|
-9.22% |
|
5/29 |
|
Sell
VPACX at $13.16 |
6887.836
shares |
$90,643.92 |
|
|
|
5/29 |
|
Buy VEIEX
at $27.09 |
3346.029
shares |
$90,190.70 |
|
-9.81%
(0.5% sales fee) |
|
8/20 |
|
Sell
VEIEX at $26.96 |
3346.029
shares |
$89,757.89 |
|
0.5%
redemption fee |
|
8/20 |
|
Buy VUSTX
at $10.91 |
8227.121
shares |
$89,757.89 |
|
-10.24% |
|
9/24 |
|
Sell
VUSTX at $11.01 |
8265.318
shares |
$91,001.15 |
|
shares
increased by dist. |
|
9/24 |
|
Buy VEIEX
at $31.95 |
2848.236
shares |
$90,546.15 |
|
-9.45%
(0.5% sales fee) |
|
11/26 |
|
Sell
VEIEX at $31.91 |
2848.236
shares |
$90,432.79 |
|
0.5%
redemption fee |
|
11/26 |
|
Buy VUSTX
at $11.80 |
7663.796
shares |
$90,432.79 |
|
-9.57% |
|
12/10 |
|
Sell
VUSTX at $11.37 |
7677.267
shares |
$87,290.53 |
|
shares
increased by dist. |
|
12/10 |
|
Buy VEIEX
at $34.98 |
2495.441
shares |
$86,854.08 |
|
-13.15%
(0.5% sales fee) |
|
12/31 |
|
Holding
VEIEX at $33.12 |
2540.005
shares |
$84,124.97 |
|
-15.88%
(shares increased by dist.) |
Fidelity VIP:
|
12/31 |
|
Holding
FAMEE at 24.306669 |
4114.09725
shares |
$100,000.00 |
|
|
|
3/5 |
|
Sell
FAMEE at 22.280000 |
4114.09725
shares |
$91,662.09 |
|
|
|
3/5 |
|
Buy FAVHI
at 31.990000 |
2865.33563
shares |
$91,662.09 |
|
-8.34% |
|
3/26 |
|
Sell
FAVHI at 32.269000 |
2865.33563
shares |
$92,461.52 |
|
|
|
3/26 |
|
Buy FAVVS
at 16.365000 |
5649.95510
shares |
$92,461.52 |
|
-7.54% |
|
6/25 |
|
Sell
FAVVS at 17.364582 |
5649.95510
shares |
$98,109.11 |
|
|
|
6/25 |
|
Buy FAMEE
at 28.176825 |
3481.90787
shares |
$98,109.11 |
|
-1.89% |
|
8/20 |
|
Sell
FAMEE at 26.370000 |
3481.90787
shares |
$91,817.91 |
|
|
|
8/20 |
|
Buy FAVMM
at 21.080000 |
4355.68836
shares |
$91,817.91 |
|
-8.18% |
|
8/27 |
|
Sell
FAVMM at 21.091873 |
4355.68836
shares |
$91,869.62 |
|
|
|
8/27 |
|
Buy FAVGR
at 69.250000 |
1326.63716
shares |
$91,869.62 |
|
-8.13% |
|
10/1 |
|
Sell
FAVGR at 76.342888 |
1326.63716
shares |
$101,279.31 |
|
|
|
10/1 |
|
Buy FAMEE
at 33.009764 |
3068.16226
shares |
$101,279.31 |
|
1.28% |
|
12/31 |
|
Holding
FAMEE at 33.864452 |
3068.16226
shares |
$103,901.63 |
|
3.90% |
VALIC:
|
12/31 |
|
Holding
Fund 33 at 2.070514 |
48297.1861
shares |
$100,000.00 |
|
|
|
8/13 |
|
Sell Fund
33 at 2.236724 |
48297.1861
shares |
$108,027.48 |
|
|
|
8/13 |
|
Buy Fund
6 at 2.092584 |
51623.9612
shares |
$108,027.48 |
|
8.03% |
|
8/27 |
|
Sell Fund
6 at 2.095335 |
51623.9612
shares |
$108,169.49 |
|
|
|
8/27 |
|
Buy Fund
46 at 0.550431 |
196517.8066
shares |
$108,169.49 |
|
8.17% |
|
11/12 |
|
Sell Fund
46 at 0.558443 |
196517.8066
shares |
$109,743.99 |
|
|
|
11/12 |
|
Buy Fund
13 at 2.501496 |
43871.34478
shares |
$109,743.99 |
|
9.74% |
|
12/10 |
|
Sell Fund
13 at 2.501537 |
43871.3448
shares |
$109,745.79 |
|
|
|
12/10 |
|
Buy Fund
78 at 1.140836 |
96197.69381
shares |
$109,745.79 |
|
9.75% |
|
12/31 |
|
Holding
Fund 78 at 1.121568 |
96197.69381
shares |
$107,892.26 |
|
7.89% |
Summary for 2002-2007:
|
|
|
|
|
|
|
|
2004-2007 |
2002-2007 |
|
Brokerage/Company
Returns |
2007 |
2006 |
2005 |
2004 |
2003 |
2002 |
Avg. Returns |
Avg. Returns |
|
Brokerage |
10.05% |
16.73% |
-6.42% |
-16.80% |
60.70% |
17.10% |
0.89% |
13.56% |
|
Fidelity |
9.85% |
12.70% |
12.09% |
19.90% |
N/A |
N/A |
13.64% |
N/A |
|
T. Rowe
Price |
-1.91% |
12.20% |
4.82% |
7.60% |
N/A |
N/A |
5.68% |
N/A |
|
Vanguard |
-15.88% |
6.81% |
15.44% |
7.60% |
N/A |
N/A |
3.49% |
N/A |
|
Annuity
Returns |
|
|
|
|
|
|
|
|
|
Fidelity
VIP |
3.90% |
16.34% |
15.60% |
3.00% |
59.40% |
3.90% |
9.71% |
17.02% |
|
VALIC
403b |
7.89% |
8.30% |
17.70% |
8.30% |
38.70% |
13.40% |
10.55% |
15.72% |
|
Average
of 6 FTI Portfolios |
2.32% |
12.18% |
9.87% |
4.93% |
|
|
7.33% |
|
|
|
|
|
|
|
|
|
|
|
|
Market
Indexes |
|
|
|
|
|
|
|
|
|
DJIA |
6.43% |
16.29% |
-0.61% |
3.10% |
25.30% |
-16.80% |
6.26% |
5.62% |
|
S&P
500 |
3.53% |
13.62% |
3.00% |
9.00% |
26.40% |
-23.40% |
8.54% |
5.36% |
|
NASDAQ |
9.81% |
9.52% |
1.37% |
8.60% |
50.00% |
-31.50% |
6.50% |
7.97% |
|
Russell
2000 |
-2.75% |
17.00% |
3.32% |
17.00% |
45.40% |
-21.60% |
12.44% |
9.73% |
|
Midcap
400 |
6.69% |
8.99% |
11.27% |
15.16% |
34.02% |
-15.45% |
11.81% |
10.11% |
Discussion:
For 2007, the average return of our 6 portfolios posted a gain of 2.32%, a
little behind the average of the 5 market indexes we track. The 4-year average return of our 6
portfolios is 7.33%. The 6-year average
return of the brokerage portfolio, which we have been tracking since 2002, is
13.56%. The 6-year return for the
Fidelity VIP and VALIC annuities is 17.02% and 15.72%. All 6-year returns measured exceed that of
all major market indexes.
It was a choppy up and down year for both the market indexes and the FTI System. The Dow Jones hit 14,000 in July before pulling back sharply to below 13,000. After another rebound and fall, it finished the year ahead 6.43%. Our returns varied between portfolios, with the most consistent (least volatile) being the Fidelity mutual fund account and the VALIC annuity. The Fidelity portfolio has out-performed all major market indexes over 4 years. The brokerage-available portfolio finished with a double-digit gain on the strength of the Guinness Atkinson Asia Focus and US Global Investors China Regional Opportunities funds. However, the Vanguard portfolio was repeatedly burned by several moves in and out of the volatile Emerging Markets fund. Mandatory 1% fees for a complete transaction compounded the loss. We’re currently evaluating whether we should continue to include this fund in our list. The Risk Factor of 4 is high and implies that even if the fund is trending strong over the long-term, short-term volatility can cause frequent trades in and out, wiping out gains. The downside to including these types of funds was very apparent in the Vanguard portfolio this year. In any case, those with a more conservative approach to investing should avoid funds with high Risk Factor values.
The strongest
recent years (since 2002) for the FTI System relative to the market were 2005,
2003 and 2002. During strong sustained
bull markets, such as 2003, we tend to be in the best growth funds. FTI helps to determine which funds are
trending the strongest and our gains by year’s end are vastly superior to the
market. We also saw superior returns
during the bull markets of the 90’s.
During strong bear markets, such as 2002, we spend much of the time in
money market, bond and in some cases, contrarian funds, shielding our
portfolios from the losses and allowing for some gains. During volatile markets that are largely
sideways, there are fewer good runs. We
can still make superior returns, as in 2005, but much will depend on our fund
selection and the timing of trades.
Even during the sub-par years, we still tend to be fairly close to the
market indexes on average. We don’t
know which way the market is headed in 2008.
There’s been some talk of an economic downturn, and the opening weeks of
2008 certainly indicate this. If the
stock market sustains drops over a period of time, portfolios following the FTI
System will be very well positioned.
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