7 Best Mutual Funds for 2009
As our economic outlook continues to be poor and as the stock
market is in turmoil, stock investing has become increasingly difficult. Maintaining a
solid investment portfolio can be hard work. One alternative to the
difficult work of stock selection is to invest in mutual funds.
With thousands of mutual funds to choose from, how can you tell
which ones are the best?
That's why I have compiled a list of the 7 Best Mutual Funds for
2009. After researching the
performance, stability, and income of hundreds of top-rated funds,
I found the best mutual funds to invest in for 2009 and
beyond.
Income-Dividends
One part of my selection process was to find mutual funds with cash
flow, either through dividends or bond interest payments (in the
form of dividends for mutual funds). This factor is becoming ever
more important during a time when stocks continue to decline.
Through dividends you can know that you will have an income of the
yield percentage.
Future
Trends
Another selection criteria was to find mutual funds that are going
to perform well for years to come. As you will see, I have included
a mutual fund that invests in stocks of alternative energy or
"green" companies. The whole environmentally-friendly, green
movement is just getting started and will be a boon to the economy
for the next 10-20 years. One aspect that is somewhat more of a
near-term strategy is the gold focused fund because of the
predicted rise in the price of gold over the next year or
two.
Long-Term
Performance
The last and most important selection criteria was the long-term
performance of the mutual fund. Any one stock or mutual fund can
perform well over one or two years by luck, but it takes true skill
to manage a portfolio that has good returns over a ten year period.
A major failure of many investors that buy mutual funds is that
they chase the fund that is currently performing the best or just
recently had its best year. If the mutual fund is having an
unbelievably great year, then either stay away from it because it's
too late or sell it if you own it.
The 7 Best Mutual Funds for 2009:
1. American Century High-Yield Fund (AHYVX)
- With the current state of the economy, your best bet for making
money is finding an investment with a stated income (i.e.
dividends, bond interest payments). American Century's High Yield
Fund has a dividend yield of
9.38%, which is much larger
than most high yielding mutual funds or stocks.
2. The
New Alternatives Fund (NALFX)
- this is the perfect
mutual fund for times when people and companies are looking for
environmentally-friendly ways of doing things. This mutual fund
invests in companies that focus on renewable energy sources, as
well as companies that are concerned with energy conservation and
environmental protection. Over the next decade green and
alternative energy stocks will most likely sky-rocket with gaining
popularity and necessity.
3.
Franklin Utilities Fund (FKUTX)
- A utilities fund is
also a great way to get a flow of decent income during a time of
poor stock performance. This mutual fund has a dividend yield of 4%
and a 10-year annualized return of
5.17%, which is very
impressive. Utility companies are a solid investment for having a
stream of dividend income.
4. ING
Corporate Leaders Trust Fund (LEXCX)
- Although its 10-year
annualized return has been hurt by the recent stock market downturn
putting it at 3.67% (which is better than all but two main value
strategy mutual funds), ING's fund has performed
10% better than the
S&P 500 over the past
year. It also has a dividend yield of
2.46%.
5.
Franklin Gold and Precious Metals (FKRCX)
- This mutual fund has
been a top performer over the past decade with a
10-year annualized
return of 14.42% and a
current dividend
yield of 8.34%. This mutual
fund has performed amazingly, and it will continue to perform with
gold becoming more of a flight-to-safety investment for
investors.
6. Vanguard Energy Fund
(VGENX)
- although the
commodities boom of earlier this year has faded, oil prices will
come back. It is only a matter of time. Vanguard's Energy Fund has
had a 10-year annualized return of
14.81%, which is better than
most mutual funds of any kind. It is positioned to perform well
over the next few years.
7.
Municipal Bond Fund (of your choice)
- municipal bond rates
have gone up in recent months and continue to be a great source of
extra income. For example, some bonds in Florida are paying 6% a
year in interest. Remember with municipal bonds that interest
payments are tax-exempt; just make sure you pick a bond that is
within your state (otherwise interest payments become
taxable). How does a tax-free income of
5% or 6% on your investment sound for 2009- with the U.S. still in
recession?
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