Three Simple Ways to Achieve Your Goals
Assemble long-term, mid-term and short-term portfolios using the Kiplinger 25 funds.
Successful fund investing doesn't stop with choosing the best funds. The next step is equally vital -- combining the funds into a rational investment plan.
It's also important to diversify your portfolio. Different kinds of stocks -- those of large companies versus small companies, rapidly growing companies versus undervalued companies, foreign versus U.S. -- take turns leading (and lagging) the markets. The performance divergences are unpredictable and often enormous.
| Row 0 - Cell 0 | The 25 best mutual funds |
| Row 1 - Cell 0 | How our 2005 picks performed |
| Row 2 - Cell 0 | What's in, what's out since last year |
| Row 3 - Cell 0 | When a fund's size matters |
Over the long term, different types of stock funds tend to produce roughly similar results, although small-company stocks perform better (and are also riskier). The reason for owning some of each category is to smooth your portfolio's ups and downs.
Article continues belowFrom just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
How should you divvy up your stock money? Roughly 50% belongs in large-company funds, split between funds that invest in growing companies and funds that invest in bargain-priced ones. Put 25% in foreign funds, and divide the final 25% among small-company funds that invest in growth companies and value stocks. But you may have to make adjustments, as we do in our suggested portfolios, for funds that buy different kinds of stocks.
