MarketWatch featured a piece called “Bottom Fishing.” The story mentions one mutual fund that for one brief shining moment last week showed a positive return for the year:
It’s best not to judge fund managers on short-term results, but in this harrowing market climate, anyone who can even approach breakeven is probably worth a closer look.
Forester’s eponymous Forester Value Fund (FVALX) lost 2.9% this year as of Nov. 6, according to fund-tracker Lipper Inc. By comparison, its average large-cap value rival slumped 38.1%.
“It’s been one of those years where you just can’t buy and hold,” Forester said. “You have to be opportunistic.”
Perhaps Forester’s best opportunity this year came because of what he didn’t own: financial stocks. He sidestepped the big landmines in that troubled sector, while investing heavily in defensive consumer-staples and pharmaceutical stocks to support the portfolio.
[emphasis added]
I did not think that I would ever hear those words from a fund manager. Since you never know what a new year will bring, you always need to be prepared. This fund manager may have been simply lucky, or maybe he realized that the use of sell stops and subsequent clearly defined exit points have a place when managing money.
This is not to say that you should jump in and buy this fund, after all, we’re still in a bear market. I am merely pointing out that there was one individual who beat all of his peers by a big margin, and I applaud him for that.