Williamstown, MA, July 02, 2008 --(PR.com
)-- Don Dion’s Sector Momentum Tracker decided to maintain its position in Gold last week, and the mutual fund garnered an 8.84% return for investors in the Sector Momentum Portfolio.
“It was both the best-performing fund in the Portfolio and the best-performing fund in our universe—by a wide margin,” said Dion in his weekly commentary, “we are going to stand by this position and continue to hold Gold in the portfolio.”
Sector Momentum Tracker is a member of Fidelity Independent Adviser’s family of publications. The Sector Momentum Tracker Portfolio seeks to invest in growth-oriented mutual funds from outperforming sectors. The portfolio has returned 45.28% net of fees since its inception in June of 2004.
In the wake of the Federal Reserve’s recent decision to keep interest rates steady at 2.0 percent, the dollar sank to a three-week low against the euro on Friday, and oil settled above the $140 per barrel mark for the first time on the New York Mercantile Exchange. Both factors—the weak dollar and record-high oil prices—helped boost gold to a one-month high on the New York Mercantile Exchange’s Comex division during Friday’s session.
Dion’s defense of the portfolio’s Gold position stems from his analysis of the weak dollar and the high price of oil. “Although Bernanke & Co. appear to be increasingly concerned about inflation,” Dion noted, “most analysts who follow the central bank believe the Fed will not move to boost interest rates until it sees evidence of rising wages.” Dion believes that without a hike, the dollar will remain weak against other foreign currencies, and gold should continue to rebound.
Also on Dion’s radar is Pharmaceuticals, the big gainer on his table over the course of the last week. Merck weighed heavily on this fund earlier in the year, but the giant drugmaker has recently prevailed in a series of key Vioxx cases and remains a top fund holding. Nevertheless, manager Andrew Oh has been slowly reducing his fund’s exposure to Merck. As of April 30, Johnson & Johnson was the top stock, accounting for 12.84 percent of net assets. Dion predicts that pharmaceutical investors “are likely hedging their bets ahead of the presidential election in November. The democratic platform includes a universal health care program that could undermine the profitability of this sector.”
The latest issue of Sector Momentum Tracker lists the top three portfolio holdings as Energy Service, Natural Gas and Natural Resources. If Dion’s bets on oil and gold continue to pay off, his Sector Momentum Portfolio should continue to perform for the rest of 2008.
About Don Dion, Publisher of Sector Momentum Tracker:
Don Dion is the publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors Don’s commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the United States and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers. http://www.fidelityadviser.com/
Mr. Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Massachusetts, Dion Money Management manages more than $750 million in assets for clients in 49 states and 11 countries. A licensed attorney in Massachusetts and Maine, Mr. Dion has more than 25 years’ experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management. http://www.dionmm.com/