improves and interest rates start to turn up this year, bond funds will be hurt, so investors are likely to move money into growth stocks.”
How should you react to your portfolio being clawed by the bear market of 2000-2001?
Of course, monitor your holdings. Before making radical asset shifts, keep in mind the resilience of the stock market. For instance, the S&P 500 was up an impressive 16.8% in the four months after its September 21 low (the index plummeted, due in large part to terrorist attacks on the World Trade Center and the Pentagon). Historically, the S&P 500 has had an average gain of 18.6% during rebounds after nine preceding post-war bear markets.
FINDING BALANCE WITH BONDS
Long-term investors should heed this bit of advice: Stay diversified across-the-board. In addition to growth and value stock funds, purchase bond funds as well.
In some cases, Hammond has repositioned his clients’ assets, putting more of their money into bond funds last year. But he may not be as aggressive going forward. “Since interest rates are more likely to go up from here than to go down further,” he asserts, “I’m reluctant to advise a greater allocation to bond funds.”
The Browns, however, like safe instruments and increased their fixed-income allocation last year, moving dollars into bond offerings such as Alliance California Municipal Income Fund (NYSE: AKP), a closed end fund which provides income free of state or federal tax. The couple will continue to embrace diversification and quality. In order to maximize their holdings and retire comfortably, with a $1 million portfolio, the Browns will stay away from “stunt” investing. And you should too.
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B.E.’s TOP MUTUAL FUND PERFORMERS |
|||||||
| AVG. ANNUALIZED TOTAL RETURN | |||||||
|
FUND NAME |
TICKER |
1-YEAR |
3-YEAR |
5-YEAR |
MIN. INIT. |
ASSETS* |
PHONE |
| Large Growth | |||||||
| Rydex Arktos Inv. | RYAIX | 15.13% | -13.39 | NA | $25,000 | $91,597,511 | 800-820-0888 |
| Potomac OTC/Short | POTSX | 6.77 | -18.07 | NA | 10,000 | 5,588,566 | 800-851-0511 |
| Rydex Retailing Inv. | RYRIX | 3.23 | -3.99 | NA | 25,000 | 24,899,117 | 800-820-0888 |
| Bear Stearns Focus List A | BSFAX | 2.93 | 3.87 | NA | 1,000 | 19,353,659 | 800-766-4111 |
| Fidelity Export & Multinational | FEXPX | 0.72 | 13.17 | 17.02 | 2,500 | 672,889,376 | 800-544-8888 |
| Mid-cap Growth | |||||||
| Heritage Mid-Cap Stock A | HMCAX | 19.15 | 21.74 | NA | 1,000 | 83,936,454 | 800-421-4184 |
| Needham Growth | NEEGX | 12.07 | 29.33 | 24.56 | 5,000 | 345,008,813 | 800-625-7071 |
| Fidelity Select Bus Serv & Outsrcg | FBSOX | 9.59 | 11.84 | NA | 2,500 | 57,734,959 | 800-544-8888 |
| Liberty Acorn Twenty Z | ACTWX | 8.00 | 15.97 | NA | 1,000 | 69,369,717 | 800-322-2847 |
| Strong Discovery | STDIX | 2.75 | 3.99 | 5.94 | 2,500 | 158,266,367 | 800-368-1030 |
| Small Growth | |||||||
| Buffalo Small-Cap | BUFSX | 31.18 | 33.21 | NA | 2,500 | 536,477,702 | 800-492-8332 |
| William Blair Small-Cap Growth N | WBSNX | 25.99 | NA | NA | 5000 | 12,278,700 | 800-742-7272 |
| Dreyfus Premier Micro-Cap Growth A | DPMGX | 25.44 | NA | =”MIDDLE”>NA | 1,000 | 16,348,000 | 800-782-6620 |
| Oberweis Micro-Cap | OBMCX | 23.86 | 10.8 | 9.47 | 1,000 | 28,317,533 | 800-323-6166 |
| Exeter Small-Cap A | MNSMX | 22.05 | 13.64 | 7.31 | 2,000 | 103,472,085 | 800-466-3863 |
| Large Blend | |||||||
| ProFunds UltraBear Inv. | URPIX | 22.65 | 1.34 | NA | 15,000 | 51,711,817 | 888-776-3637 |
| Thompson Plumb Growth | THPGX | 19.13 | 16.81 | 20.09 | 1,000 | 327,817,909 | 800-999-0887 |
| Rydex Ursa Inv. | RYURX | 16.33 | 6.17 | -5.19 | 25,000 |
ACROSS THE WEB
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