With the best best stocks to buy fund investment portfolio you have better odds than most stock investors of making money in 2011. Broad diversification is your best stock fund strategy going forward, and you can achieve this by owning just 4 basic fund types.
Here we simplify the stock (equity) fund universe of thousands to choose from so you can put together your own best stock fund package. There are general categories based on where a fund invests. Most are domestic diversified funds that invest in American companies, but others invest internationally or in special sectors. Then, each fund is placed into one of 9 boxes based on: size of companies (LARGE, MID, or SMALL-CAP) and the nature or style (GROWTH, VALUE, or a BLEND of both) of the holdings in their portfolio. This will all make sense to you as we now narrow down the field to just your 4 best stock fund types for 2011.
In your best stock fund investment package you’ll want to have a flagship or primary fund to serve as your main or largest equity holding. Your best fund to fit the bill here would be a LARGE-CAP BLEND fund. If you want to own just one fund, this is your best shot as well. Here you will own a small part of a portfolio of mostly very LARGE and well-known American companies like Apple, IBM and GE. Plus, you will own a BLEND of both growth and dividend-paying value stocks. The very best stock fund as a main holding: an S&P 500 Index fund. This will give you heavy diversification and a piece of 500 of the biggest and best corporations in the USA.
Your second-largest holding should be a LARGE-CAP BLEND, FOREIGN or INTERNATIONAL fund. This will broaden your diversification to overseas markets. Since no one really knows where to find the best stock investment in 2011 and beyond, why not go abroad and include some of the biggest and best companies around the globe in your investment portfolio? Going with smaller less-known foreign equities is a bit risky for most folks. To eliminate the chance of picking the wrong fund in this category, simply go with an INDEX fund that tracks the whole sector.
In the event that smaller companies outperform in 2011 and going forward, make your third fund choice a MID-CAP BLEND fund. Here you will be invested in a diversified portfolio of both growth and value equities of smaller companies, all in one investment portfolio. Your very best stock fund here: an INDEX fund. Advantage: low-cost investing and performance that tracks the mid-cap sector.
The fourth stock fund to consider in 2011 is not a general diversified fund, but rather a specialty or sector fund that invests in commercial real estate. This is a great and simple way to add even more diversification to your investment portfolio. Your best stock fund investment here is a fund that invests in equity REITs (real estate investment trusts), diversified across the USA. Historically (excluding the financial crisis) this fund category has offered average investors both growth and good dividends. Again, I suggest an INDEX fund for lower cost, broad diversification and more consistency in performance.
Put these 4 fund selections together and you’ve got one of the best stock fund investment packages to face the uncertainties of 2011 and beyond. If the equity markets continue upward, you’ll be in fine shape. If things take a turn for the worse you will be heavily diversified in some of the best investment options and best companies in the world. While a lousy stock market is always possible and could spell disaster for unprepared investors – it should be only a setback if you hooked up with the best stock fund combination.
