When it comes to investing, my advice is simple. Buy index funds and no-load mutual funds and ignore the stock market (and the endless media analysis and speculation on individual stocks). It’s easy enough to understand, but where should starting investors turn for guidance on which funds to choose? Kiplinger’s maintains a list of its favorite 25 mutual funds. Fifteen of those funds are “no-load” (i.e., they don’t charge a sales fee to invest in them). Here they are:
No-Load U.S. Stock Mutual Funds
- Baron Small Cap (BSCFX)
- CMG Focus (CGMFX)
- Dodge & Cox Stock (DODGX)
- Fidelity Contrafund (FCNTX)
- Longleaf Partners (LLPFX)
- Selected American Sahres S (SLASX)
- T. Rowe Price Equity Income (PRFDX)
- T. Rowe Price Mid-Cap Growth
- T. Rowe Price Small-Cap Growth
No-Load International Stock Mutual Funds
- Artio International Equity II A (JETAX)
- Dodge & Cox Int’l Stock (DODFX)
No-Load Bond Mutual Funds
- Dodge & Cox Income (DODIX)
- Harbor Bond Institutional (HABDX)
- Loomis Sayles Bond (LSBRX)
- Vanguard Infl-Protected Secs (VIPSX)
If you’re in your twenties and just starting out investing in an IRA or non-retirement account; I would think that a combination of three-four of these funds would make an ideal first portfolio (perhaps one or two U.S. stock funds, an international fund, and a very small investment in a bond fund).
Interested in learning more about a particular mutual fund? I recommend you set up a free account with Morningstar; my favorite source for mutual fund data.
What do you think? Do you have a favorite no-load mutual fund that is or isn’t included on this list?