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Seven Steps to a Better Portfolio

Kiplinger.com's How to Choose Winning Funds lists seven 'simple steps' to building a winning fund portfolio without the help of a broker:

  1. Determine your objective
  2. Home in on a specific category
  3. Watch your costs
  4. Study past performance
  5. Consider risk
  6. Size up the fund
  7. Know who's at the helm


Any similarity to our own Seven Golden Rules of Mutual fund Investing is purely coincidental:

  1. No Loads!
  2. Don't Overestimate Past Performance Figures
  3. No Fat Funds
  4. The Younger the Better
  5. Watch Expenses
  6. Check Performance Relative To Class
  7. Know The Fund's Risk Level

Fidelity is Having A Bad Year

02/19/07 - Fidelity

A tough year at Fidelity has Kiplinger.com's Steven Goldberg wondering if the overhaul of stockpicking operations that the mutual fund giant undertook a year and a half ago might need some serious tweaking.

I don't think the wheels are falling off at Fidelity. But plainly some mid-course corrections are in order for the huge revamping of the stockpicking operation that Fidelity launched 18 months ago. Someone high up at Fidelity may -- or may not -- agree. Stephen Jonas, who headed that restructuring, retired at the end of January. Bob Reynolds, Fidelity's chief operating officer, says Jonas, 53, wanted to spend more time with his family and that he and Jonas "came to a mutual agreement that this was a good jumping off point. Performance had nothing to do with it." Maybe so.

Longer-term performance at Fidelity hasn't been awful, but those of us old enough to remember when Peter Lynch turned Fidelity Magellan into the most famous fund in the land do long for the good old days. Over the past three, five and ten years, Fidelity's average U.S. diversified fund ranks above average -- in the 40th to 42nd percentile over each period. The trend at Fidelity's foreign funds has been disturbing. Over the past ten years, they're in the top 32% of diversified overseas funds. Over the past five years, they're in the top 40%. But over the past three years, they rank in the 73rd percentile (or the bottom 27%)."

Despite the rough patch, we still include several Fidelity funds in our MAXadvisor Powerfund Portfolios' Our Favorite Funds report. Fidelity Small Cap Growth (FCPGX) makes the cut in the small cap growth category. Fidelity Europe Capital (FECAX), Fidelity Southeast Asia (FSEAX), Fidelity Global Balanced (FGBLX), and Fidelity Spartan International (FSIIX) also get gold stars.