Foreign-Invested Mutual Funds

CNN Money recently posted a listing of their opinion of the 70 best mutual funds that you can buy. I was very interested because I have an affinity for mutual funds as opposed to individual stocks and bonds, as an investment.

I think that mutual funds (a collection or ‘grab-bag’ of stocks picked by an investment professional, from companies that often are from the same sector or geographic area) are the best investment for my money because it allows me the opportunity to diversify without having to study hundreds of stock options and it allows me to invest in an area or industrial sector I feel confident about.

In the past I’ve shared how I’ve invested in mutual funds that are connected to the Asian and European markets. If you know me, you know that I’m partial to foreign funds. I think that many domestic investors avoid foreign investments because they believe that they can carry more risk that American investments, due to foreign government instability, world economic issues, and other reasons. I think that many Americans feel more confident and patriotic buying into good old GM, IBM, and Sears, than they do about companies from Asia or Latin America. However, being from a foreign country originally, I appreciate that fact that many foreign countries have stable governments, educated populations, valuable resources, and growing industries. Personally, I think that for maximum investment growth potential it’s better to invest in a foreign country. I was curious to see what CNN Money had to say about my choices and to see what other recommendations that had to make.

What was pleasing to me was to see that they listed my old friend American Funds EuroPacific Growth A (AEPGX); it’s got over 21% returns on a 5-year investment, and over 16% on a 2-year investment. Other items that caught my eye were American Funds New World A (NEWFX), T. Rowe Price Emerging Markets Stock (PRMSX), T. Rowe Price International Discovery (PRIDX), Vanguard Emerging Markets Stock Index (VEIEX), and Vanguard Emerging Markets ETF (VWO).

I recommend doing a Google search on these funds (see search bar convieniently placed below) and taking a look at their past performance and the areas and industries they’ve invested into, and compare them to domestic funds. You'll find that they meet or beat the competition every time. For me, as a younger investor with a lot of years to go before retirement, I can be a little more aggressive and speculative in my investment strategy. My philoposphy is that I should aim for high gains now while time is on my side, and then in ten years or so, start to pull back into a safer position. Although there will be losses, as is natural and expected, I guarantee (to me, not to you) that I'll be way ahead of the other guy. I have over 10K in AEPGX and REREX together and have experienced 20%+ returns so far, and some of these others seem promising as well.

Images: Mumbai (India), Kuala Lumpur (Malaysia), Shanghai (China)

Enter your search terms Submit search form

Web www.richmoneymillion.com