Shooting for Big Returns.MARCIA Marcia can refer to:
Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , D.C., retiree. "Before I retired, I decided how much I would need to live on, and I get a check for that amount, each month, from my mutual funds. I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in not changing my strategy because I know I have a good mix of funds." Just as Mitchell keeps a full set of clubs in her bag to help her wherever her ball happens to land, smart investors are following a similar tack--investing in a varied assortment assortment /as·sort·ment/ (ah-sort´ment) the random distribution of nonhomologous chromosomes to daughter cells in metaphase of the first meiotic division. as·sort·ment n. of mutual funds so they can reap huge returns despite different market conditions. Some funds boomed while others bombed in the first half of 2001. Moreover, this year's leaders were the dogs that many investors spurned spurn v. spurned, spurn·ing, spurns v.tr. 1. To reject disdainfully or contemptuously; scorn. See Synonyms at refuse1. 2. To kick at or tread on disdainfully. v. just a few years ago. A SIX-MONTH LOOK AT THE MARKET There were many losers. Overall, the first half of 2001 was quite dismal dis·mal adj. 1. Causing gloom or depression; dreary: dismal weather; took a dismal view of the economy. 2. for stock market investors. The Standard & Poor's 500 (the index pros use as a benchmark for the U.S. stock market) lost nearly 7%, This came on top of a 9% loss in 2000. The blue chip-focused Dow Jones industrial average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. lost less ground, but the Nasdaq composite index Nasdaq Composite Index An index that indicates price movements of securities in the over-the-counter market. It includes all domestic common stocks in the Nasdaq System (approximately 5,000 stocks) and is weighted according to the market value of each listed , dominated by technology stocks, suffered a double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. decline. Many mutual fund investors felt the pain. The average domestic equity fund lost more than 6% in the first six months of the year, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Morningstar Inc., the Chicago-based mutual fund research firm. The big-company growth funds that led the way in the 1990s lost nearly 16% in the first half, while specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. technology funds lost more than 26%. Some specialized funds that did well in 2000, those focusing on healthcare, natural resources, and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , produced mediocre me·di·o·cre adj. Moderate to inferior in quality; ordinary. See Synonyms at average. [French médiocre, from Latin mediocris : medius, middle; see medhyo- to poor results. And investing overseas didn't did·n't Contraction of did not. didn't did not didn't do help: The average foreign stock fund lost more than 14%, dragged down by weakness in European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. markets. (For the midyear mid·year n. 1. The middle of the calendar or academic year. 2. a. An examination given in the middle of a school year. b. midyears A series of such examinations. performance of funds managed by African American African American Multiculture A person having origins in any of the black racial groups of Africa. See Race. asset managers, see B.E. Black Fund Watch in this issue's Money-wise section.) There were a few winners, however. Some rays of hope broke the first half gloom gloom n. 1. a. Partial or total darkness; dimness: switched on a table lamp to banish the gloom of a winter afternoon. b. A partially or totally dark place, area, or location. . "While high-priced Adj. 1. high-priced - having a high price; "costly jewelry"; "high-priced merchandise"; "much too dear for my pocketbook"; "a pricey restaurant" pricey, pricy, costly, dear technology stocks continued to fall, which hurt growth funds, value stocks Value stocks Stocks with low price/book ratios or price/earnings ratios. Historically, value stocks have enjoyed higher average returns than growth stocks (stocks with high price/book or P/E ratios) in a variety of countries. did relatively better," says Christine Benz Benz , Karl Friedrich 1844-1929. German automobile pioneer credited with manufacturing the first vehicle powered with an internal-combustion engine, patented in 1886. , a senior analyst at Morningstar. "At the same time, the stocks of small companies outperformed those of large companies. Small banks, manufacturers, and cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. companies did particularly well, so mutual funds holding those types of companies had good returns in the first half of 2001." Morningstar divides mutual funds that hold a diversified portfolio of U.S. stocks into nine categories. (To evaluate the different types of funds, log on to www.blackenterprise.com this month.) In the first half of 2001, "small value" funds were up roughly 13%, bringing the 12-month return for this category to more than 25%--a good year by any standard, but especially so during a period when the broad U.S. stock market was clawed claw n. 1. A sharp, curved, horny structure at the end of a toe of a mammal, reptile, or bird. 2. a. A chela or similar pincerlike structure on the end of a limb of a crustacean or other arthropod. b. by the proverbial pro·ver·bi·al adj. 1. Of the nature of a proverb. 2. Expressed in a proverb. 3. Widely referred to, as if the subject of a proverb; famous. bear. Generally, small-company funds topped the funds that invested in the blue chips while value funds trumped growth funds. In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke" put differently , the market has done a 180-degree turn in a three-year period. Back in 1998, Morningstar's small value category lost slightly more than 5%, while large growth funds topped the charts, returning more than 33% for the year. Technology funds, which gained 54% in 1998 and an amazing a·maze v. a·mazed, a·maz·ing, a·maz·es v.tr. 1. To affect with great wonder; astonish. See Synonyms at surprise. 2. Obsolete To bewilder; perplex. v.intr. 137% in 1999, lost 33% in 2000 before dropping a further 26% in the first half of 2001, as mentioned. Other specialized funds have seen similar reversals. Precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. funds, which lost money during the booming 1990s, posted a 13% gain in the first half of 2001. "That gain probably was the result of investors becoming defensive with their money," says Benz. "The price of gold really hasn't has·n't Contraction of has not. hasn't has not hasn't have moved up. However, if the world economy falls into recession and stocks continue to slide, precious metals might be a safe haven 1. Designated area(s) to which noncombatants of the United States Government's responsibility and commercial vehicles and materiel may be evacuated during a domestic or other valid emergency. 2. ." Real estate funds had a decent first half, too, returning more than 8%, on top of a gain of more than 26% in 2000. But real estate funds lost money in 1998 and 1999, so they're they're Contraction of they are. they're be still on the rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective . "The move to value stocks has helped real estate funds," says Benz. "In addition, real estate stocks offer relatively high yields and a way to participate in an economic recovery." SCORING WITH EQUITIES Mitchell, who recently retired after 35 years with a local phone company (now Verizon), believes in stocks so much that her portfolio is 100% invested in equities, mainly stock funds. The conventional wisdom is that retirees should turn conservative, with a healthy allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of their portfolios to bonds and bond funds, but "she's she's 1. Contraction of she is: She's going away for the weekend. 2. Contraction of she has: She's been to the symphony twice this month. a very young retiree, in her early 50s," maintains Mitchell's advisor, Charlene D. Monts, an assistant vice president and senior financial advisor in the private client group at Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. in Baltimore Baltimore, city (1990 pop. 736,014), N central Md., surrounded by but politically independent of Baltimore co., on the Patapsco River estuary, an arm of Chesapeake Bay; inc. 1745. . "We must plan on a long retirement. She'll she'll Contraction of she will. she'll she will or she shall she'll will need growth in her investments to maintain a comfortable lifestyle, and stocks are likely to provide long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth." Mitchell passed up a pension and rolled over all of her retirement funds into an IRA Ira, in the Bible Ira (ī`rə), in the Bible. 1 Chief officer of David. 2, 3 Two of David's guard. IRA, abbreviation IRA. , which is currently invested in five equity funds: AIM Blue Chip, AIM Value, AIM Weingarten, American Funds  Please see the discussion on the talk page. Washington Mutual (or WaMu; NYSE: WM) is the United States' largest savings and loan association. Investors. "Her portfolio is fairly evenly divided among those funds," says Monts, "with slightly more in Washington Mutual, which has a strong record going back nearly 50 years. These are funds that invest in high-quality companies, growth and value, so Marcia has a portfolio designed to keep her from losing sleep. We don't anticipate any changes in the near future, even if the stock market remains volatile." Some investors are pursuing a similar strategy, counting on long-term gains Long-term gain A profit on the sale of a capital assets held longer than 12 months, and eligible for long-term capital gains tax treatment. from the equity markets even though their advisors would recommend a little more caution. "My wife, D'Ann, and I invest mainly in individual stocks and stock funds," says Derrick derrick: see crane. Derrick famous hangman; eponym of modern hoisting apparatus. [Br. Hist.: Espy, 170] See : Execution Snearl, a programmer-analyst at the Los Angeles Department of Water and Power The Los Angeles Department of Water and Power (LADWP) is the largest municipal utility in the United States, serving 3.9 million residents in 2006. It was founded in 1902 to deliver water and electricity supplies to residents and businesses in Los Angeles. . "At 37, I feel I'm young enough to be aggressive with our own funds and the money we're investing for our two young children, ages 2 and 6." The market's recent turmoil has reduced Snearl's appetite for buying individual stocks, he says, but he still favors aggressive growth funds such as Janus Twenty, where he invests $350 each month. "The price of that fund has come down," he says, "so my monthly statements show that I'm buying more shares. Long-term, I expect that to pay off." At work, Snearl has a deferred compensation plan that permits him to channel money into stock funds such as Janus Olympus, RS Emerging Growth, and American Funds' Growth Fund of America--three growth funds--and Vanguard Vanguard Any of three unmanned U.S. experimental satellites. Vanguard I (1958), the second U.S. satellite placed in orbit around Earth (after Explorer 1), was a tiny 3.25-lb (1.47-kg) sphere with two radio transmitters. 500 Index, a fund with a substantial weighting in financial services and technology stocks. "I'll probably keep putting money into these funds unless something drastic happens in the market," he says. Snearl's financial planner Financial Planner A qualified investment professional who assists individuals and corporations meet their long-term financial objectives by analyzing the client's status and setting a program to achieve these goals. , Percy E. Bolton of Pasadena, wishes that this client were a tad more conservative. "A 20% allocation to bonds or bond funds probably would be appropriate," he says. "Bond funds can help you avoid losses when stocks are weak, which has been the case recently." He favors the Fremont Bond Fund and Columbia Fixed-Income Securities Fixed-income securities Investments that have specific interest rates, such as bonds. , both of which are well balanced and well managed, in his opinion.
B.E.'s Top Mutual Fund Performers
Y-T-D
TOTAL
FUND NAME TICKER RETURN(*)
Large ([dagger])Fidelity
Growth Adv Lev Co Stk A FLSAX 6.84
Hussman Strategic
Growth HSGFX 4.81
Smith Barney Aggr
Growth A SHRAX 3.66
Potomac OTC/Short POTSX 2.46
Fidelity Export &
Multinational FEXPX 1.84
Mid-Cap Needham Growth NEEGX 18.13
Growth ([dagger])Heritage
Mid Cap Stock A HMCAX 12.44
Strong Discovery STDIX 9.76
Westcore Select WTSLX 9.29
([dagger])Goldman
Sachs Growth Opp A GGOAX 8.97
Small Kinetics Small Cap
Growth Opp KSCOX 25.36
Perkins Opp POFDX 24.11
([dagger])J Hancock
Small Cap Val A SPVAX 22.36
Buffalo Small Cap BUFSX 21.26
([dagger])Dreyfus
Prem Micro-Cap
Growth A DPMGX 20.6
Large Fidelity Select
Blend Leisure FDLSX 13.12
ProFunds
UltraBear Inv URPIX 12.12
Grizzly Short Fund GRZZX 11.29
Rydex Leisure Inv RYLIX 10.73
Thompson Plumb
Growth THPGX 8.83
Mid-Cap Legg Mason Opp Prim LMOPX 17.72
Blend Eagle Growth EGRWX 17.66
StockCar Stocks SCARX 16.64
Index
Turner Midcap Val CCEVX 12.03
INVESCO Leisure Inv FLISX 11.77
Small Wasatch Core Growth WGROX 31.84
Blend FBR Small Cap Val A FBRVX 29.52
SAFECO Growth Opp SAFGX 26.15
Liberty Acorn USA Z AUSAX 26.04
CGM Focus CGMFX 25.95
Large ([dagger])J Hancock
Value Focused Rel Val A JFVAX 29.16
Masters' Select Val MSVFX 19.23
([dagger])Merrill
Lynch Mid Cap Val D MDRFX 17.95
Dean Large Cap Val A DALCX 15.57
Memorial Val Equity
Inst MVEIX 15.26
Mid-Cap Columbia
Value Strategic Val CSVFX 24.4
Meyers Pride Val MYPVX 21.73
Olstein Financial
Alert Adv OFAFX 20.42
TCW Galileo Val
Opp N TGVNX 20.11
Marshall Mid-Cap
Val Adv MVEAX 17.61
Small Boston Part Sm Cap
Value Val II Inv BPSCX 40.46
Franklin MicroCap
Val A FRMCX 34.46
Perritt Micro
Cap Opp PRCGX 33.8
Aegis Val AVALX 30.31
Turner Small Cap Val TCSVX 28.71
Foreign Longleaf Part Intl LLINX 15.67
Stock Oakmark Int Small
Cap I OAKEX 6.92
First Eagle SoGen
Overseas A SGOVX 5.52
Tweedy, Browne
Global Val TBGVX 2.35
Oakmark Intl I OAKIX 0.39
World RS Parts RSPFX 21.37
Stock Oakmark Global I OAKGX 14.94
([dagger])Mutual
Discovery A TEDIX 6.25
RS Contrarian RSCOX 3.26
([dagger])Van Kampen
Tx Mgd Glo Fran A VGFAX 0.54
Domestic Boston Part Long/
Hybrid Short Eq Inv BPLEX 14.36
Oakmark Equity &
Income I OAKBX 12.53
Bruce BRUFX 10.95
EquiTrust Mgd FBMGX 8.17
Rydex Arktos Inv RYAIX 7.1
U.S. Pauze U.S. Govt Ltd
Govern- Duration PGTRX 12.89
ment Maxus Income Inv MXSFX 8.83
Funds Vanguard Infl-
Protected Secs VIPSX 6.39
Franklin Strategic
Mortgage FSMIX 3.83
Amer Cent Tgt Mat
2010 Inv BTTNX 0.08
Muni ([dagger])Nuveen High
Natio- Yld Muni Bond R NHMRX 6.97
nals Victory Nat Muni
Bond A VNMAX 3.31
SAFECO Muni Bond SFCOX 3.02
Harris Insight Tax-Ex
Bond N HXBAX 2.95
([dagger])Eaton Vance
Muni Bond Inst EVMBX 2.25
AVG. ANNUALIZED
TOTAL RETURN
FUND NAME 1-YEAR 3-YEAR 5-YEAR
Large ([dagger])Fidelity
Growth Adv Lev Co Stk A N/A N/A N/A
Hussman Strategic
Growth N/A N/A N/A
Smith Barney Aggr
Growth A 0.63% 34.72% 29.85%
Potomac OTC/Short 45.07 -28.66 N/A
Fidelity Export &
Multinational -1.46 15.78 22.27
Mid-Cap Needham Growth 1.55 35.02 27.62
Growth ([dagger])Heritage
Mid Cap Stock A 18.66 20.35 N/A
Strong Discovery 2.42 6.07 8.08
Westcore Select -0.12 N/A N/A
([dagger])Goldman
Sachs Growth Opp A 16.99 N/A N/A
Small Kinetics Small Cap
Growth Opp 36.53 N/A N/A
Perkins Opp -8.79 -1.25 31.41
([dagger])J Hancock
Small Cap Val A 2.09 29.43 23.93
Buffalo Small Cap -32.01 30.59 N/A
([dagger])Dreyfus
Prem Micro-Cap
Growth A N/A N/A N/A
Large Fidelity Select
Blend Leisure -3.97 8.31 16.72
ProFunds
UltraBear Inv 38.45 -8.76 N/A
Grizzly Short Fund 41.33 N/A N/A
Rydex Leisure Inv -6.51 0.64 N/A
Thompson Plumb
Growth 32.21 15.77 22.47
Mid-Cap Legg Mason Opp Prim 11.5 N/A N/A
Blend Eagle Growth 40.02 8.4 10.67
StockCar Stocks
Index 25.17 N/A N/A
Turner Midcap Val 20.65 6.37 11.27
INVESCO Leisure Inv 9.47 22.93 22.2
Small Wasatch Core Growth 67.2 26.0 23.86
Blend FBR Small Cap Val A 12.12 10.45 N/A
SAFECO Growth Opp 23.34 3.44 16.73
Liberty Acorn USA Z 36.68 9.5 N/A
CGM Focus 81.6 23.72 N/A
Large ([dagger])J Hancock
Value Focused Rel Val A N/A N/A N/A
Masters' Select Val 24.6 N/A N/A
([dagger])Merrill
Lynch Mid Cap Val D 35.73 12.28 15.34
Dean Large Cap Val A 25.64 4.61 N/A
Memorial Val Equity
Inst 35.58 4.56 N/A
Mid-Cap Columbia
Value Strategic Val N/A N/A N/A
Meyers Pride Val 21.43% 17.15% 19.08%
Olstein Financial
Alert Adv 26.83 N/A N/A
TCW Galileo Val
Opp N N/A N/A N/A
Marshall Mid-Cap
Val Adv 44.25 N/A N/A
Small Boston Part Sm Cap
Value Val II Inv 72.08 20.7 N/A
Franklin MicroCap
Val A 41.32 7.24 12.9
Perritt Micro
Cap Opp 13.68 7.68 8.7
Aegis Val 35.15 18.56 N/A
Turner Small Cap Val 38.52 19.28 19.9
Foreign Longleaf Part Intl 29.6 N/A N/A
Stock Oakmark Int Small
Cap I 1.6 16.84 6.4
First Eagle SoGen
Overseas A 7.61 11.11 10.19
Tweedy, Browne
Global Val 8.74 11.23 15.48
Oakmark Intl I 5.68 13.28 9.88
World RS Parts 45.98 7.24 9.16
Stock Oakmark Global I 28.02 N/A N/A
([dagger])Mutual
Discovery A 11.71 9.62 N/A
RS Contrarian 6.65 5.31 -4.75
([dagger])Van Kampen
Tx Mgd Glo Fran A 15.36 N/A N/A
Domestic Boston Part Long/
Hybrid Short Eq Inv 52.29 N/A N/A
Oakmark Equity &
Income I 29.43 14.41 17.23
Bruce 32.28 5.11 9.85
EquiTrust Mgd 27.9 4.8 6.13
Rydex Arktos Inv 56.58 N/A N/A
U.S. Pauze U.S. Govt Ltd
Govern- Duration 21.59 4.39 6.44
ment Maxus Income Inv 13.24 6.23 7.67
Funds Vanguard Infl- 12.57 N/A N/A
Protected Secs
Franklin Strategic
Mortgage 12.07 7.06 7.78
Amer Cent Tgt Mat
2010 Inv 13.24 5.03 8.9
Muni ([dagger])Nuveen High
Natio- Yld Muni Bond R 11.57 N/A N/A
nals Victory Nat Muni
Bond A 11.18 5.87 6.68
SAFECO Muni Bond 11.27 4.46 6.49
Harris Insight Tax-Ex
Bond N 11.78 5.17 5.77
([dagger])Eaton Vance
Muni Bond Inst 12.19 3.72 6.87
MIN. ASSETS(*)
INIT. (in
FUND NAME PHONE INVEST. millions)
Large ([dagger])Fidelity
Growth Adv Lev Co Stk A 800-522-7297 $2,500 0.76
Hussman Strategic
Growth 800-487-7626 1,000 20.26
Smith Barney Aggr
Growth A 800-451-2010 1,000 2,075.37
Potomac OTC/Short 800-851-0511 10,000 3.31
Fidelity Export &
Multinational 800-343-3548 2,500 537.02
Mid-Cap Needham Growth 800-625-7071 5,000 275.15
Growth ([dagger])Heritage
Mid Cap Stock A 800-421-4184 1,000 38.33
Strong Discovery 800-368-1030 2,500 170.45
Westcore Select 800-392-2673 2,500 32.09
([dagger])Goldman
Sachs Growth Opp A 800-526-7384 1,000 430.42
Small Kinetics Small Cap
Growth Opp 800-930-3828 1,000 4.49
Perkins Opp 800-998-3190 2,500 31.41
([dagger])J Hancock
Small Cap Val A 800-225-5291 1,000 444.38
Buffalo Small Cap 800-492-8332 2,500 53.44
([dagger])Dreyfus
Prem Micro-Cap
Growth A 800-782-6620 1,000 15.18
Large Fidelity Select
Blend Leisure 800-343-3548 2,500 301.67
ProFunds
UltraBear Inv 888-776-3637 15,000 24.91
Grizzly Short Fund 800-273-6886 10,000 4.94
Rydex Leisure Inv 800-820-0888 25,000 18.12
Thompson Plumb
Growth 800-999-0887 1,000 127.47
Mid-Cap Legg Mason Opp Prim 800-577-8589 1,000 1,692.61
Blend Eagle Growth 800-525-6201 500 3.8
StockCar Stocks
Index 800-494-2755 250 4.42
Turner Midcap Val 800-224-6312 2,500 46.56
INVESCO Leisure Inv 800-525-8085 1,000 770.85
Small Wasatch Core Growth 800-551-1700 2,000 1,098.21
Blend FBR Small Cap Val A 888-888-0025 2,000 9.44
SAFECO Growth Opp 800-624-5711 2,500 871.68
Liberty Acorn USA Z 800-322-2847 1,000 257.85
CGM Focus 800-345-4048 2,500 100.11
Large ([dagger])J Hancock
Value Focused Rel Val A 800-225-5291 1,000 13.03
Masters' Select Val 800-960-0188 5,000 143.13
([dagger])Merrill
Lynch Mid Cap Val D 888-654-6837 1,000 11.77
Dean Large Cap Val A 800-268-4007 1,000 15.86
Memorial Val Equity
Inst 888-263-5593 2,000 14.67
Mid-Cap Columbia
Value Strategic Val 800-547-1707 $1,000 68.62
Meyers Pride Val 800-410-3337 1,000 14.34
Olstein Financial
Alert Adv 800-799-2113 1,000 30.04
TCW Galileo Val
Opp N 800-386-3829 2,000 36.04
Marshall Mid-Cap
Val Adv 800-236-8560 500 2.12
Small Boston Part Sm Cap
Value Val II Inv 888-261-4073 2,500 103.45
Franklin MicroCap
Val A 800-342-5236 1,000 217.96
Perritt Micro
Cap Opp 800-332-3133 1,000 10.87
Aegis Val 800-528-3780 10,000 6.18
Turner Small Cap Val 800-224-6312 2,500 117.78
Foreign Longleaf Part Intl 800-445-9469 10,000 685.43
Stock Oakmark Int Small
Cap I 800-625-6275 1,000 103.72
First Eagle SoGen
Overseas A 800-334-2143 1,000 412.4
Tweedy, Browne
Global Val 800-432-4789 2,500 3,834.49
Oakmark Intl I 800-625-6275 1,000 844.86
World RS Parts 800-766-3863 5,000 109.01
Stock Oakmark Global I 800-625-6275 1,000 39.96
([dagger])Mutual
Discovery A 800-342-5236 1,000 933.91
RS Contrarian 800-766-3863 5,000 85.38
([dagger])Van Kampen
Tx Mgd Glo Fran A 800-421-5666 1,000 15.8
Domestic Boston Part Long/
Hybrid Short Eq Inv 888-261-4073 2,500 7.66
Oakmark Equity &
Income I 800-625-6275 1,000 204.84
Bruce 800-872-7823 1,000 3.29
EquiTrust Mgd 877-860-2904 250 35.99
Rydex Arktos Inv 800-820-0888 25,000 53.67
U.S. Pauze U.S. Govt Ltd
Govern- Duration 800-327-7170 25,000 45.85
ment Maxus Income Inv 800-446-2987 1,000 37.81
Funds Vanguard Infl- 800-662-7447 3,000 295.02
Protected Secs
Franklin Strategic
Mortgage 800-342-5236 1,000 137.46
Amer Cent Tgt Mat
2010 Inv 800-345-2021 2,500 271.00
Muni ([dagger])Nuveen High
Natio- Yld Muni Bond R 800-257-8787 3,000 2.92
nals Victory Nat Muni
Bond A 800-539-3863 500 49.33
SAFECO Muni Bond 800-624-5711 2,500 527.29
Harris Insight Tax-Ex
Bond N 800-982-8782 1,000 1.17
([dagger])Eaton Vance
Muni Bond Inst 800-225-6265 250,000 85.63
Bolton recently revised his model portfolios, advising clients to spread their risks even more on the equity side. "Now," he says, "we not only recommend growth and value funds, we also tell investors to put money into blended (core) funds, which combine growth and value stocks. In addition to having some of your money managed by specialists, you should have generalists investing for you. Dreyfus Appreciation is a large-cap Large-cap A stock with a high level of capitalization, usually at least $5 billion market value. large-cap 1. Of or relating to the common stock of a big corporation that has considerable retained earnings and a large amount of core fund that we like, for example." Investors tend to focus too much on past performance when selecting funds, according to Bolton. "Stability of management is just as important," he says. "Why buy a fund that has done well if the manager who produced that record has left? You also should look for funds that are tax-efficient, if you're investing outside of a retirement account." The funds Bolton prefers are those that are available, at no fee, through the mutual fund supermarkets fund supermarket A financial institution that offers a large number of mutual funds from many different sponsors. The term is often used to refer to brokerage firms that offer customers a very large number of no-load funds. offered by Schwab, Fidelity, and TD Waterhouse TD Waterhouse is the brand used for both British and Canadian brokerages within the TD Bank Financial Group. The brand originated as a United States brand for discount brokerage when TD purchased Waterhouse Securities. . "If you buy, funds that have minimum investments of $5,000 or less," he says, "you can have a portfolio of eight mutual funds with as little as $40,000 to invest." DRIVING THROUGH DIVERSIFICATION Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. But others find safety and consistent returns through the development of a diversified mutual fund portfolio. While stock funds had their ups and downs ups and downs pl.n. Alternating periods of good and bad fortune or spirits. ups and downs Noun, pl alternating periods of good and bad luck or high and low spirits in the first half, most bond funds posted small gains (up to 4%), a result that pleased Frederick and Cecelia Carter of Westerville, Ohio Westerville is a city in Franklin and Delaware Counties in the U.S. state of Ohio. It is a suburb of Columbus. The population was 35,318 at the 2000 census. Geography Westerville is located at (40.123496, -82. . "We had about 60% of our investment assets in bond funds," says Fred, president of Carter Raynes Claims Service, an insurance adjustment agency. "We lost some money on our stock funds but our bond funds gained, so we weren't hit too hard." The Carters, who have been tilting tilt 1 v. tilt·ed, tilt·ing, tilts v.tr. 1. To cause to slope, as by raising one end; incline: tilt a soup bowl; tilt a chair backward. 2. toward bonds since 1998 on the advice of their financial advisor, Bill Harris Bill Harris can refer to several people. In arts:
The Carters, who are investing to build up education funds for their three children, ages 11 to 18, as well as for their own retirement, truly believe in a diversified portfolio. "We invest in more than a dozen funds, in several categories," says Fred. "We have domestic and international funds, small-caps and large-caps, fixed-income as well as stock funds." Among their holdings are BlackRock Large Cap Growth Equity, LSV LSV Laser Surface Velocimeter LSV Low-Speed Vehicle LSV Linear Sweep Voltammetry LSV Logistics Support Vessel LSV Large-Scale Vehicle (US Navy) LSV Light Strike Vehicle LSV Landing Ship, Vehicle (WW II) Value Equity, Nicholas-Applegate Small Cap Growth, and Artisan Small Cap Value. On the fixed-income side, their funds include BlackRock Core Bond Total Return Portfolio and Baird Core Bond Investors. "With this type of portfolio," says Fred, "we can take risks with some of our money while cushioning those risks with other funds." Back in 1998, the risks seemed to lie with high-priced growth stocks, especially technology stocks. "I advised my clients, including the Carters, to take some profits and put more money into bonds, which seemed undervalued Undervalued A stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. then," says Harris. "Now, stocks are down and the economy is likely to improve, after six interest rate cuts by the Federal Reserve. An improving economy should help the stock market to rally, so I'm recommending more equity funds in clients' portfolios." Even though he's upbeat, Harris is not telling clients to bet all their chips on a comeback Comeback Australian breed of wool sheep, bred by crossing Merino with Corriedale, Polwarth or Zenith sheep; wool is 21 to 25 microns. It is a registered breed, but the term is more commonly used in the sense of a type of sheep produced by crossbreeding a crossbred Merino back to Merino. by tech or growth funds. "Instead of 40% in equity funds, I might suggest a 60% allocation," he says. "It's necessary to keep a balance by investing in funds that are not correlated cor·re·late v. cor·re·lat·ed, cor·re·lat·ing, cor·re·lates v.tr. 1. To put or bring into causal, complementary, parallel, or reciprocal relation. 2. with each other." That is, small value funds don't rise and fall in sync with large growth funds. If one fund category runs into hard times, another probably will provide positive returns. James McQuirter, too, believes in casting a wide net. "I usually own between 10 and 15 funds," says McQuirter, who lives in Dallas and retired two years ago from IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , where he was a technical support manager. "My wife, Ardath, and I live on my IBM pension now, but we also have a mutual fund portfolio to provide future growth." Investors need to consider such moves. After the results of the past year, mutual fund investors may be willing to sacrifice a little offense in order to strengthen their defense now that the bears have come out of hibernation. |
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