(PUB) Investing 2016

January 2016 Vol. 24 No. 5

FundInvestor Research and recommendatio s for the s riou fund investo

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Where to Invest in 2016 and Beyond

are starting from very low levels, so a couple of interest-rate increases doesn’t mean the Fed is slamming the brakes on the economy. Should the economy trend downward, even the gradual rate-hike plan could be put on hold. Where to Invest Finding attractive investments today is something of a challenge because higher-risk assets have generally gotten cheaper while lower-risk assets have not. But you almost certainly don’t want to sell conservative investments across the board while buying risky ones. This isn’t Las Vegas. So, I’ll start with ideas on the low-risk side and work my way up to more-aggressive, opportunistic ideas. Conservative Ideas The best time to buy insurance is when it doesn’t appear to be needed. With oil prices plummeting, inflation-protected securities are now a pretty good deal by most measures. If you have a large part of your portfolio in fixed income, then some inflation insurance is a good idea. Ideally, you should own your Treasury Inflation- Protected Securities fund in a tax-sheltered account because you have to pay taxes on any uptick in the TIPS ’ values. There are three strong options here. Vanguard Short- Term Inflation-Protected Securities Index VTIPX is my favorite because it doesn’t come with much interest-rate risk. You can also go with Vanguard Inflation-Protected Securities VIPSX or Harbor Real Return HARRX . Harbor Real Return is run by PIMCO ’s Mihir Worah using a wide array of inflation- linked bonds outside the U.S. as well as derivatives.

RusselKinnel, Director of ManagerResearch and Editor

Fund Reports

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It was a pretty good year for the economy but a subpar year for investing. Most fund categories were in the red or just slightly in the black in 2015 . Falling oil prices, a rising dollar, and our first interest-rate hike since 2006 made for a volatile mix. On top of that, there’s some worry that a recession is not far around the corner. tripled from its 2009 low point. On the other hand, commodities and emerging markets have been much less rewarding in recent years, and that’s not a coincidence. Slower-than-expected growth in China hurt commodities prices because they’re closely tied to that country’s economy. In addition, Saudi Arabia’s crude production boost, combined with increased fracking in the United States, pushed oil prices to remarkably low levels. So you’ll find that energy and emerging markets played a big role in your 2015 fund returns. Funds that avoided both looked great while those that had meaningful exposure to either of them generally suffered dismal performance. That includes equity funds as well as high-yield bond funds. And now the Federal Reserve is raising rates. But that doesn’t spell doom. Fed chairwoman Janet Yellen has signaled that the plan is to hike very gently. We After a long bull market, it isn’t a shock to see markets back up a bit. After all, the S & P 500 has

Artisan Global Value Dodge & Cox Global Stock T. Rowe Price Blue Chip

Morningstar Research Great Small-Cap Funds

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The Contrarian Buy the Unloved

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Red Flags

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Funds With High Payout Ratios

Market Overview

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Leaders & Laggards

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Manager Changes and News

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Portfolio Matters

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Transitioning From Growth to Retirement Income

Tracking Morningstar

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Analyst Ratings

Income Strategist

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High Yield Faces Challenges but Isn’t in Third Avenue’s Shoes

Changes to the 500

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FundInvestor 500 Spotlight

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Follow Russ on Twitter @RussKinnel

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