Ira 401k Investing: Are We Entering a Growth Spurt?
Last time I wrote on mutual funds, I was hot on Fidelity Low Priced Stock (FLPSX) and Fidelity Value (FDVLX). Since writing two years or so ago, a switch seems to have occurred. Its late 2011 and all mutual funds in addition as the overall stock market are down. But some funds are down less than others:
FDVLX is down a whopping -16.0%; FLPSX ( which I am nevertheless hot on) is down -8.0%. But look at Fidelity Growth Company (FDGRX) its only down 3.39% YTD. Have large cap growth stocks started to take off and leave value stocks, which have been taking off since after the 2000 crash some 11 years ago, started to make a reappearance?
ingemination the market shifts between growth and value stocks. After 2000 crash, I was in FLPSX and FDVLX and averaged 11.36% yearly with these two stock until the crash in 2008! So has the value reign for value stocks started to shift to growth stocks in a no growth economy? Only time will tell…..so lets keep our eyes open and start tracking Large Cap Growth stock mutual fund companies with the likes of FDGRX. Also track Fidelity Contra Fund (FCNTX) down YTD – 5.76%
Remember to invest in fund families, so you can switch between growth and value in your IRA and 401K plans at work. Always bet on the jockey (the fund manager) and not the horse! Stop chasing the next hot mutual fund and start looking to invest in a family of funds on a longer, long term basis. I like Fidelity. Also look into Vanguard and T. Rowe Price. As you get older, you will switch more into bonds and go into the likes of Fidelity Strategic Real Return (FSRRX) down YTD 1.04% or into a balanced fund. But you will nevertheless need exposure to stocks well into your 70’s and beyond. And do not forget that financial advisers recommend a 5% to 10% allocation into alternate investments like real estate – but do you want the headaches? Try an auto-traded futures account to generate monthly income. Some traders are starting to cater to the lay person when it comes to education in futures and self-directed IRA accounts as a different to traditional stock and mutual fund investments – futures also serve as a compliment to these traditional forms of investing for regular investing and for retirement investing too!
Learn and prosper!