"Good point," Roy said, smiling, "very good point. The experiences of the few people I've known who've tried sector timing have been so bad as to almost be funny. In-stead of switching at the opportune moment, they've switched from one sector fund when they've become frus-trated with its poor performance—sold low—into another sector fund that has boasted a much better recent track record—bought high."
"You know, using sector funds also tends to eliminate one of the major advantages of mutual funds that you mentioned earlier—diversification," I added proudly.
"Yes, I do know," Roy agreed with a wink. "With your ten percent solution, stick to a well-diversified fund whose manager emphasizes value and growth potential, not one whose manager chases fads or tries to be wherever the action is. Find one who uses common sense, discipline, and patience to select and hold stocks that offer good value— stocks that, at the time of purchase, others are overlooking. This is key!
"Four: Watch your commissions. The fund I used had a high commission structure, but it has been well worth the cost. Nonetheless, it's certainly in your best interest to limit your commission, or load, as it is frequently called. That load is sometimes quite high. Many financial experts recommend buying only no-load funds, adding that there are scores of excellent ones available. For the most part, I agree with that advice but, as with every rule, there are a couple of exceptions. If you need the help of a stockbroker, mutual fund salesperson, insurance agent, or financial planner in selecting a fund, obviously you should pay for that help. Frankly, their expertise can make it worth paying the load, especially if you are unable or unwilling to do the