best mutual funds for 2011

Best mutual funds for 2011 - Contra Bond Funds Funds Sell

Consider this a warning if it takes the best mutual funds for 2011 and years to be re vs bond funds. stock funds. Millions of people have these funds and many are wondering what is the best funds to own in these times of high uncertainty. Here we compare and discuss some things about which you may never have thought.

With the year 2011 approached a trend in mutual funds became very clear. Investors pulled money funds exhausted and ran to the perceived safety of bond funds. The reason: Bond funds had a good record, while equity funds investors had beaten up big time ... twice in the "lost decade" from 2000 to 2010. Forward could be a serious mistake to assume that the best mutual funds for 2011 and beyond will again be those that invest in fixed income securities called bonds. Let's look at the nature of both types of funds.

Bond funds are often marked INCOME funds because their goal is to earn relatively high interest income for its investors by investing in fixed income securities. The second objective is preservation of principal or stable prices of fund shares (security). Stock funds are often called Equity funds because they invest their money in equities (stocks) in the pursuit of total return ... higher with a higher degree of risk. Earn money here when stock prices rise, and secondarily dividend income. Most people have learned the value or price of their equity funds fluctuate, going up and down. Many have not learned that bond fund values fluctuate too, but pursues a relative price stability.

Few people care for their mutual funds, but they know more if you make or lose money. For example, few would know how or why they made a total yield of 10% for the year in a bond fund when paid only 3% or 4% dividend (interest) income. Where did the rest of the profits? Very simply, the price of fund shares rose on the year as interest rates fell in the economy. This has been the basic trend for years as interest rates have fallen to new lows. A consequence of falling rates of fixed income securities in bond fund portfolios have become more attractive to investors in general - which has offered up bond prices to higher levels and higher on the open market.

In vs bond funds. equity funds will debate could say that the former is more predictable. If the economy remains lackluster and interest rates continue to fall, bond funds might well be the best mutual funds for 2011 and future years. Moreover, these funds are even more predictable in the short side. If interest rates rise appreciably virtually all the bonds in the stocks become less attractive and lose value. Then make the funds that invest in them. This is one of the only ironclad rules to investing. Another is that each investment is at risk ... and there is significant risk to the investor relied on income funds when interest rates are at or near new lows. Plus, there is little potential gain upper left. After all, how much further they can fall in interest rates?

Equity funds, as the stock market has always been unpredictable from year to year. That's why these funds are required to warn investors about the risks involved in investing in them. On the other hand, they have produced long-term gains (returns) on the average about 10% per year vs. 5% to 6% returns for income funds. Some years they have produced returns of 30%, 40% or more for investors. Another advantage is the variety of equity funds available to average investors: general diversified funds, international, emerging markets, and specialty funds that specialize in gold, real estate and natural resources sectors to name a few. Not all equity funds tank when the U.S. stock market gets beaten for a loop.

In the best mutual funds for 2011 debate vs bond funds. equity funds here are my final thoughts for you. The average investor should invest in both. You can do this and cut their overall risk if you do the following. Avoid long-term fund income because they are very sensitive to higher interest rates. Go with intermediate-term funds for less risk. In the equity diversified funds the department as crazy even international and specialty funds in your portfolio. The general diversified equity funds should be your primary properties, but mix it up a little. Funds that specialize in the likes of gold, real estate, and oil stocks can sometimes bucking the trend in a lousy stock market.

You should not find the best mutual funds for 2011 and beyond on any category to succeed. Need the best collection of funds of stocks and bonds that bring their overall risk portfolio at a level that can live with.