Mutual Funds

No Load Mutual Funds Maximizer

March 11th, 2008 Subscribe To Our Feed

The Internet has spawned a lot of dot com companies since it’s heyday in the year 2000. They grew faster than a mushroom in a dark cave. They reached their peak that year and then crashed. If you had all of your investments in one basket of dot com companies you lost your shirt. This catastrophe illustrates why you need to diversify your investments. and not put all your investment assets in one financial basket.

High Growth Sectors

Rather than simply investing your money in diversified no load mutual funds such as Fidelity Magellan Fund or Fidelity Contrafund Fund, you would do well to look to sector funds as a means to create a better and more profitable diversified no load mutual fund portfolio. It means that, by constraining your investments according to particular sectors such as is the case with Fidelity Select Energy no load mutual fund, your investments would then be made in the energy industry, including in oil and gas corporations, integrated oil corporations and even companies providing services to oil fields would give you a better return on investment.

Sectors

How do such investments in sector based no load mutual funds actually increase the effectiveness of your money? The answer is that you need to select a sector with high growth potential, such as is the case with software and electronics. Such ‘core and satellite’ sectors will prove to be productive for you. So you can easily invest in Fidelity Select Software and Computer Services or Fidelity Select Electronics that will allow you to put your money in high growth industries and thus grow your money the most in the process.

Sector Rotation

However, there is more to this kind of no load mutual fund investing. Besides identifying the high growth sectors, you will also need to be proactively involved in your investments that means need to rotate between sectors. The best way by which an investor can maximize their potential is by switching every once in a while to sectors with highest growth potential.

You need to be tactically sound because you will then be able to see a hundred thousand dollar investment made in diversified no load mutual funds grow at approximately ten percent each year which would give you back about two and a half times the initial investment in just ten years. And, by also taking a small portion of your initial investment and apportioning it to no load sector mutual fund, you stand to gain dramatically more.

Fidelity Magellan Fund

At one time Fidelity Magellan Fund managed by Peter Lynch grew at eighteen percent a year. The fund grew so large that it became impossible for it to keep growing at that pace. So size matters. Look at some of the sector funds that are enjoying some good returns like Select Software, Select Software and Computer Services, and Select Electronics. Don’t forget to compare them to other funds in the no load select mutual fund groups.