Recently (about two months ago) I invested a year’s wages in Fidelity Mutual Funds. This is a good time for me to do this for a number of reasons:
- I am still living with my parents and have virtually no living expenses.
- I am early in life and thus an investment of $1000 will have a lot longer to grow than $1000 invested later in life.
- Because of my small income, tax-wise this is a good time to have non-tax-deferred returns
I studied the energy situation and saw a lot of potential as energy prices continue to sky-rocket. 23.6% of my investment went into Fidelity Select Energy Service. It has risen 15.32% since my purchase. My entire portfolio has risen 7.59% since purchase.
Here is a breakdown (fund, percent of investment put into fund, percent return since purchase):
- FIDELITY CAPITAL APPRECIATION, 13.6%, +5.82%
- FIDELITY DIVIDEND GROWTH, 13.6%, +3.39%
- FIDELITY CHINA REGION, 11.3%, +6.08%
- FIDELITY JAPAN SMALLER COMPANIES, 13.6%, +3.71%
- FIDELITY LATIN AMERICA, 13.6%, +11.59%
- FIDELITY SELECT ENERGY, 13.6%, +3.10%
- FIDELITY SELECT ENERGY SERVICE, 20.5%, +15.32%
First, I went into Select Energy only about a week ago. That explains the discrepancy in numbers (23.6% and 20.5%) between the two mentions of percentage of portfolio that Energy Service comprises. The higher percentage is as a percentage of my initial investment. The lower percentage is a percentage of my current portfolio. The also explains the relatively “anemic” (snort! 3% in a week…) return of Energy beside Energy Service.
Second, above results aren’t typical. I got lucky (Ok, I did a bunch of research, but I still got lucky) on energy. That helped a lot. Past performance is never a guarantee of future gain.
Third, I am not a professional and don’t sue me if you lose money.
Fourth, I would like to greatly encourage young people to invest their money. Don’t spend it on junk that dosen’t last. That money that you’ll forget what you spent it on in a week could be a stable financial future 5-10 years down the road. It could be a house bought and paid for.
My Dad has always put the maximum allowable under law each year into an IRA (a tax-deferred investment account) retirement account since he was 21. Get a jump on him! Start earlier!
Fifth, I would discourage anyone from investing in a short-term way. If you are going to invest it, look at the long term. If you try to time the market, you will usually just catch the wrong end of the market swings. Unless you know what you are doing (unlike myself), the best thing to do is to invest in mutual funds and let professionals manage it. You can choose what sectors you think will do well, but definitely spread your risk by diversifying.