Mutual Fund Marathon: The Top Funds Over Five Years: 2002-2006

    by John Markese

    Mutual Fund Marathon: The Top Funds Over Five Years: 2002 2006 Splash image

    The bears have dominated the market over the last month or two, but the last five years were dominated by a bull market for common stocks—one bear year followed by four bull years. Over these years, some funds thrilled, others withered. And for long-term investors, it is the marathon winner, not the short-term sprinter, that counts.

    To be a top fund requires beating a benchmark, and that benchmark is peer group performance. Just remember: For a fund to be one of the best, it can’t look like all the rest. A top fund must distinguish itself by being different. Often, however, being different simply means taking on higher risk—for instance, industry concentration, few holdings, risky strategies, longer maturities, poorer credit risks.

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