Best Fidelity Mutuals Funds to invest in?

Question

I have about 10k+ to invest. I have heard that Energy i.e., Natural gas, Oil "short", etc. are good. I would imagine funds that are heavy in housing/real estate might also be good in the long term as they are down but historically should go way up. Does anyone have any suggestions on which Fidelity funds might be a good bet. I can keep it in for about a year or more- time is not the big factor although some liquidity would be nice. It would be great to get about 10%.

Answer 1

"a year or more" tells me that you're looking to speculate, not invest.

If you want to INVEST, you need to have a 5-7, and preferably 10+ year time frame.

I don't know enough about specifics of the daily ups and downs of the market to advice you on funds to speculate in.

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But, if you want to invest, then past performance is a good-but-not-great indicator of future returns.

Pick out 4 mutual funds and put $2500 into each of them.

1 from each category:

Large-cap stock (growth & income)

Mid-cap stock (growth)

Small-cap stock (aggressive growth)

International

For each fund, you need to look at "10-year average rate of return", and you want 12%/yr or more for each of the funds.

Because if a fund can do that, then it managed to turn $10,000 in 1998 into $30,000 in 2008, DESPITE:

The dot.com dot.crash

September 11

The Iraq war

The Afganistan war

A government that inspired everyone to buy duck tape as a defense against chemical weapons

The oil crunch

The subprime mess

The dollar's fall

Bank failures

Global warming

All of that, and the fund still managed to triple in value!?!

That's where I would invest my money for the next 10 years.

Answer 2

If the markets ever return to some kind of normalcy, you can get close to your 10% goal in something as simple as FGBLX... a balanced fund with international flavor.

...or go with part of the money in international bonds/financials..( FNMIX)... pays a monthly dividend in the form of more shares...could easily accrue close to 10 in a year.

Funds do not short the market...you would need to look to a few ETFs...but it's really not a good idea...shorting needs constant attention...better to look for something to do better than to hope for the worst... ( especially in energy or nat resources...the world is just demanding too much )

If you DO want to watch your stuff close...FSCHX is in chemicals...and it is going to ride the crest of a booming agricultural market with fertilizers...but I would caution you to watch it closely and sell off some profitable shares if it goes UP too fast...and you might have to wait maybe 90 days  if there is a " short-term" trading fee. ( If you're using a Fidelity site that info should be in the " snapshot")

Answer 3

If you only have a year, I would highly recommend something other than mutual funds.  There is simply too much short-term risk, which is why funds should only be used as long-term (5+ years) vehicles.  For your time horizon, I would recommend a 1 year CD for however much you can afford to be illiquid (and keep the remainder in a money market).

I know the current rates are not great, but at least you know you will not lose $$ (a very real possibility if investing in funds for only a year).

That said, if you still want to gamble, I would be much more comfortable in a diversified fund like an S&P 500 fund.  If you really want to roll the dice and bet on sectors like energy and real estate, I would split your money up and not invest more than 25% in any one sector.  In particular, energy stocks/funds are very likely at a top right now, but still could move higher.  I like real estate more, but only slightly.

So, IF you're willing to take on a LOT of risk (short term), here would be my recommended allocation:

25% FHECX (Real Estate)

25% FSENX (Select Energy)

50% FCNTX (Contrafund)

I hope that helps.  Good luck!

EDIT - Sorry, I forgot that Contrafund is closed to new investors; try Disciplined Equity (FDEQX) instead.