Best Bond Funds & Best Stock Funds to Invest In
by James Leitz
The best bond funds and best stock funds have two things in common. One
thing could be excellent investment performance, since you invest money in
stock funds to get growth and in bond funds for higher income or
dividends. Then again, investing is rarely that simple.
Past performance figures are readily available. That's the good news. The
bad news is that past performance is not a good predictor of future
performance for mutual funds in general. And future performance is what
you invest money to get.
Last year's best performing stock funds can be losers when economic or
market conditions change, and change is the norm. Bond funds that pay the
highest dividends take risks that many investors are not even aware of.
For example, high yield funds invest in low-quality bonds and are often
referred to as "junk" bond funds in the business.
So, what two factors can you get your arms around when looking for the
best funds to invest money in? First, look at the reputation and track
record of the investment company or mutual fund family that offers and
manages a fund. They should be well-established and offer a broad array of
funds to choose from. Every fund should tell you when it was established
in its literature.
Ask for free information. Get a guide to all the funds a mutual fund
company offers. There should be numerous stock funds and bond funds to
choose from. Plus, some balanced funds and money market funds as well.
Some funds should be well established, while others might be but a few
years old. Their largest funds should manage well over $1 billion in
assets. You're looking for stability and a track record here before you
invest money.
While you have the mutual fund info in front of you, move on and look for
the second thing you need to know to pick the best stock funds and best
bond funds. Every fund must show you what it will cost if you invest
money. You can't predict future performance, but you sure as the devil can
get a handle on sales charges, fees and expenses.
These numbers are laid right out for you if you look. For example, one
stock fund might have sales charges of 5% that comes right off the top
when you invest money. Plus, yearly expenses and other fees could nail you
for 2% a year. Another might have no sales charges at all, and have total
expenses of less than 1%.
Don't throw your money away. High charges, fees and expenses are NO
indication of quality. The best funds in the country offer low-cost
investing and a good track record for reputation and integrity.
A retired financial planner, James Leitz has an MBA (finance) and 35 years
of investing experience. For 20 years he advised individual investors,
working directly with them helping them to reach their financial goals.
Jim is the author of a complete investor guide, Invest Informed, designed
for average investors or would-be investors of all levels of financial
background and experience. To learn more about investments and investing
and his new financial guide go to
http://www.investinformed.com
