Q. I have a substantial amount of my 401(k) plan in Fidelity Aggressive Growth Fund (FDEGX). Now that the fund has lost a significant amount of value, I’m considering getting out. I’m 30 years from retirement. Do you think it could make a comeback?
G.F., via the Internet
A. The results are dismal and the blame’s being pinned on the portfolio manager.
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The $6.86 billion Fidelity Aggressive Growth Fund declined 13 percent over the past 12 months, which puts it in the bottom 2 percent of all large growth funds.
Rob Bertelson, in charge for the past two years, has consistently failed to beat the stock market benchmarks with the Fidelity funds he has managed, according to Jim Lowell, editor of the Fidelity Investor newsletter (www.fidelityinvestor.com).
Bertelson’s timing in moving in and out of stocks has been terrible, said Lowell, who ranks Bertelson last among 30 growth fund managers he tracks at Fidelity.
“Fidelity Aggressive Growth is a good candidate for a portfolio manager replacement, hopefully a talented stock picker with a consistent record and the ability to resurrect this fund,” said Lowell.
Lowell thinks you’d do better with your money in Fidelity OTC or Fidelity Growth Co., both of which have managers with excellent records in both bull and bear markets.
More than 40 percent of the assets of Fidelity Aggressive Growth are in health care and 33 percent in technology. Other groups include retail, services and energy. This “no-load” (no sales charge) fund requires a $2,500 minimum initial investment.
Q. I am 57 years old and recently inherited $150,000. With the market so volatile, what would you advise I do to maximize the investment for my retirement?
C.G., via the Internet
A. Sit back, take a deep breath and give yourself time to formulate an effective game plan.
Too often, people receiving money from an inheritance or sale of a business are overrun by investment advisers, relatives and charities. They get the urge to do something with the money immediately, tossing it into stocks or elsewhere before assessing the consequences.
For now, simply put the money into a money-market fund, certificates of deposit or Treasury bills. “Ladder” the CDs or T-bills so the money becomes available over a 12- to 18-month period.
“Once you’ve carefully made the basic decisions on how you wish to invest, you can act,” said Ray Ferrara, certified financial planner and president of ProVise Management Group LLC in Clearwater, Fla. “In terms of stocks, you can best reduce volatility by constructing an asset allocation program in which each month over 12 or more months you put a set amount of money in the stock market.”
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Andrew Leckey answers questions Sunday in Business and Tuesday in Your Money. Address inquiries to Andrew Leckey, P.M.B. 184, 369-B Third St., San Rafael, Calif. 94901-3581, or by e-mail at [email protected].