Fund recommendations:

From time to time I will be discussing finds which I like and those I do not like. If my recommendation changes you will find it posted here.

Fidelity Growth Company has been one of my favorite funds for years. Manager Steve Wymer has been running this fund for over 11 years. Since then he has a very good track record. In 2007 the fund returned almost 20% and has returned 19% per year over the last five years ending December 31, 2007. This fund is available in many 401K plans. My only drawback is this fund has gotten a little large 37 billion in assets. I would prefer a domestic large cap fund not exceed 5 Billion.

Marsico 21st Century (MXXIX) fund:

This find is a large cap growth fund. Its numbers have been impressive. In 2007 this fund gained 19.34% and over 2003-2007 five year period it averaged 22.68%. Corydon J. Gilchrist has been manager of the fund for most of that time. This fund is available through big firms such as Fidelity or Vanguard or for as little as $1000 you can open an IRA with Marsico. This fund is rated five star by Morningstar (I don’t always agree with Morningstar but I do in this case.) This fund has less then 3 billion in assets which makes it an ideal size. It is a relatively concentrated fund (less than 50 stocks).

Gabelli Asset AAA (GABAX):

This fund is a classified as a mid cap blend fund but I would classify it as a value fund. The last time I reviewed this funds holdings it had nearly 500 holdings. Some of the holdings are closed end mutual funds giving the fund even more diversification. Its numbers have been impressive. This fund invests both globally although it averages 80% North American assets. In 2007 this fund gained 11.84% and over 2003-2007 five year period it averaged 16.70% Mario Gabelli has been manager of this fund since 1986. This fund is available through big firms such as Fidelity or Vanguard or for as little as $1000 you can open an IRA with Gabelli. Like most funds I like this fund has just under 3 billion assets.

Index funds:

If your 401K does not offer really good funds I really think the best option is index funds if they are available. Approximately 20% of all mutual funds outperform their domestic index. (The figure gets higher with international funds.) That means 80% of all funds under perform their index. The Standard and Poors 500 index covers 75% of the US market and provides a great deal of diversity. Many of the top 500 US firms have international exposure. Many index funds have extremely low expense ratios and make very good core investments.

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