Seesaw market action today resulted in the Dow Jones Industrial Average briefly reaching an all-time high level before pulling back at the end of the trading session. Perhaps the most disappointing is the performance of companies in the social media and biotechnology sectors. These sectors led the bull market last year, but they no longer appear to be in in favor with investors.
While market volatility and sector rotation can be confusing on the short run, it is worthwhile to take a look at the long-term picture from time-to-time. The five-year charts below show three excellent Fidelity funds (FNARX, FSNGX and FSENX) that invest in the natural resources sector. This sector includes natural gas, oil and other energy sources, in addition to metals and materials stocks.
The charts show that the natural resources sector resumed its long-term uptrend last July, which coincided with an about 10% increase of crude oil prices. This positive trend is also supported by the American energy renaissance, which includes the development of unconventional and alternative energy resources.
While stocks of natural resources companies can be volatile, this sector continues to be an attractive choice for investors seeking diversification in 2014, because both the fundamental and the technical drivers are in place.
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