Four Investment Strategies To Bounce Back In 2014

It’s been a bumpy ride for investors since December of 2007, when the US recession officially began. As we blaze through the early months of 2014, it’s natural to feel apprehensive about which investment strategies will deliver the best returns. Financial experts have flashed the thumbs up to industrial stocks, bonds, mutual funds, and bank loan investments. Read on to discover which investment strategies could help you “bounce back” in 2014.

Industrial Stocks

Over the last decade, investors made decisions based on general trends. High-risk, small-cap stocks were all the rage in 2013. These behaviors are likely to change as investors zero in on higher-quality corporations in today’s blossoming bull market.

As manufacturing picks up speed, analysts expect industrial/technological stocks to hypnotize investors. Merrill Lynch lists the CSX Corporation (CSX), owner of CSX Transportation, as a company with explosive growth potential. Ford Motor Co. (F), Southwest Airlines Co. (LUV), and defense contractor General Dynamics Corp. (GD) also preside atop the Lynch list.

Stocks to Watch

Microsoft is a company to watch as consumers ponder the question on every investor’s mind: Will CEO Steve Ballmer’s exit help or hinder public interest in Microsoft products in 2014? Flotek Industries, developer of oilfield technologies and seller of drills and fracking chemicals, is another company to monitor as the environmental debate rages on in America. FedEx is one more notable company, in part because it boasts a solid balance sheet and in part because its performance serves as a barometer for America’s overall economic health.

Bonds

Last January, analysts feared a collapse in the bond market spurred on by rising interest rates in a bond bubble. By February, this negative view made a complete about-face. In what MarketWatch’s Chuck Jaffe called the “fastest reversal in thinking ever,” bonds are now one of 2014’s hottest commodities.

High-yield bonds experienced a stellar 2013, leaving investors to question whether they could ever be so lucky again. Conservative investors might appreciate a short-term bond portfolio that lasts up to four years. This type of investment is less vulnerable to interest rates that fluctuate over longer periods. The US News & World Report lauds the performance of the Thompson Bond Fund (THOPX), BlackRock US Mortgage Portfolio (MSUMX), and Homestead Funds Short Term Bond Fund (HOSBX), among others.

Mutual Funds

The typical investor appreciates the convenience and diversity of mutual funds, and for good reason: Mutual funds combine stocks, bonds, and other securities into a diverse, often lucrative, portfolio. What’s more, they are manged by professionals who take responsibility for the brunt of the legwork. Check out this Fisher Investments career opportunities video to learn more about finding, or becoming, a quality financial adviser.

The stock market experienced turbulence during first three months of 2014. Bloomberg Rankings compiled data from that stormy time to reveal the best-performing mutual funds as of April 1. At the top of Bloomberg’s leaderboard is Tocqueville Gold Fund (TGLDX), with a first-quarter return of 15.8 percent. The Matthews India Fund (MINDX) trails close behind at 14.6 percent, while the Fidelity Select Electronics Portfolio (FSELX) rings in at 11.9 percent.

Bank Loan Mutual Funds

A slightly different mutual fund option is the bank loan mutual fund. These portfolios typically offer higher-than-average interest rates to investors. For this reason, investors at the beginning of 2014 were chomping at the bit to get into the action.

Bank loan mutual funds have their own set of risks. In 2008, when the recession started, the value of these funds dropped by a whopping 30 percent. Because loans often go to companies with shaky credit ratings, the chance for default is also greater. Nevertheless, consumer demand continues to drive up the cost of these coveted portfolios. It seems that people these days are willing to risk a lot of money in order to make a lot of money.

The investment market can be tough to navigate, but 2014 looks promising for those who do their homework and play their cards right. If you’re a nervous investor, seek help from a qualified financial advisor now. Fear is the enemy, but a qualified adviser can show you how to live fearlessly by grasping the reins of your financial destiny.