Date: Fri, 17 Nov 2006 13:50:32 -0600
From: Tad Borek 
Newsgroups: misc.invest.financial-plan
Subject: Re: Sector Fund Investment Plan
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Gary wrote:
> Here I am, sitting on a fence, not quite sure whether to try this
> thing which is a temptation for me.  I find your comments very
> discouraging, and maybe extremely wisely so.  I guess I'll let the
> temptation drop until the next time it rears its ugly head.

Well there's always trying it with play money first, just create an 
imaginary portfolio with $10k in it and run it for awhile. Though if 
you're trying to capture multi-year cycles among the sectors, you might 
not live long enough to have a statistically valid sample of your sector 
picks!

The other point is...are sectors even significant as a selection 
criteria, or is it as irrelevant as "companies with blue logos"? If you 
buy into the Chicago-school view of passive investing (Fama/French 
research suggesting that risk and returns are largely explained by 
looking at book to market value and company size) you don't even care 
what the industry is. Has it been more valid to group JCPenney with 
Wal-mart, Williams-Sonoma or A&F, or were its characteristics driven 
entirely by non-sector factors?

-Tad