As Americans look back at 2011 and look ahead to 2012, many are wondering what
to do about their 401(k) retirement accounts and mutual fund investments. After
a year like this one with lots of short-term fireworks but little overall gains
for the market it seems harder than ever to plot a way to get ahead with your
401(k) mutual funds. Thankfully, you can still find opportunities even in a
choppy stock market. You just have to know where to look. Here are the facts:
Many widely held mutual funds will never do anything other than track the market
because they're tied to an index like the Dow Jones Industrials or S&P 500,
and chalk up returns in kind. On the other hand, active managers often do even
worse than the major indices. A parade of studies and statistics show that the
average returns of mutual fund managers lag about one percentage point behind
the stock market index that most closely resembles their strategy. That means to
get ahead, you either have to pick a better index to follow or a better manager
to run your 401(k) funds. With this in mind, here are the 10 best mutual funds
to consider for 2012, with two picks each across five distinct investment
classes: blue-chip stocks, midsize stocks, small stocks, global investments and
bonds.
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