FYI: (The Linkster is not entirely buying what John is selling. For enhanced returns, up to 20% of ones portfolio should be invested in sector funds, especially health care, technology, and financials.) The key is buying more during downturns, and holding for the long-term, remembering investing is a marathon, not a sprint. Although sector funds are more volatile, don't confuse volatility with risk.)
As a first approximation of the truth, it’s fair to state that specialized funds are useless. By “specialized funds,” I mean any funds that are not core holdings. Examples include sector funds, regional or country funds, niche bond funds, and most alternative-investment funds. By “useless” I mean that such funds do not make money for their shareholders. They might perform well on paper, but they fail their owners in the real world, because investors typically buy those funds high and sell them low.
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=784562Sector Fund Returns 2007-2016: As of 9/30/16
http://www.sectorspdr.com/sectorspdr/Pdf/All Funds Documents/Document Resources/10 Year Sector ReturnsSector Tracker: (Click On 5 years)
http://www.sectorspdr.com/sectorspdr/tools/sector-trackerExample:
SPY: 3years 10.88%
5years 15.59%
10years 7.14%
15 Years 6.98%
PRHSX:
3years 12.10%
5years 23.11%
10 years 14.61%
15 years 12.46%
