Insightful Investing

While all of our Bond Funds picked up ground, Metropolitan West High Yield Bond (MWHYX) and PIMCO Foreign Bond (USD-Hedged) (PFODX) both gained a little over 2% to start out the year.

All of our stock funds lost some value in January, but FMI Large Cap (FMIHX) and Fidelity Small Cap Discovery (FSCRX) were the only two to drop less than 1%. Not surprisingly, this was one of those times when Long/Short funds outperformed traditional stock funds. Our winner this month was Hussman Strategic Growth (HSGFX) , which broke even in January.

Our Mutual Fund Portfolios, ETF Investment Portfolios, and Best Fidelity Funds have been updated through December 2009. The Mutual Funds in our Mutual Fund Portfolios are chosen from our 50 Best Mutual Funds. The ETF’s in our ETF Investment Portfolios are chosen from our List of 100 Best Exchange Traded Funds. The investment performance history of our mutual fund portfolios and ETF investment portfolios are tracked on our investment portfolio performance page.

After a nice finish to 2009, and a strong opening week to the new decade, stocks headed south to have their worst month since October. A slowing economy in China and financial problems in Spain and Greece hurt stock markets around the world. Just as they did when the financial crisis started in 2008, investors chased US Treasury Bonds in a flight to safety.

Emerging Markets Stocks fell the most for the month with a drop of -5.5%. International stocks were next in line, losing -4.4%. The best performing stock category were Mid Cap Stocks, dropping only -2.5% in January.

In contrast to stocks, the average Bond fund picked up 1.5% in January, interestingly, led by the High Yield variety.