Mutual Fund Picks for 2012 and The Best ETFs for 2012
AlphaProfit to Provide New Fund Picks on December 30
The AlphaProfit Core and Focus model portfolios will be reconstituted on December 30 to include newly recommended mutual fund picks for 2012 and the best ETFs for 2012.
Year 2011 has been one of violent swings.
Starting the year on upbeat prospects of continued economic recovery, U. S. stocks stayed in positive territory for most of the first-half. The S&P 500 ($SPX) marked its high for the year on May 2.
Volatility increased in the second-half, as the sovereign debt crisis heightened in Europe, political turmoil increased in North Africa & the Middle East, and Standard and Poor's downgraded U. S. debt rating.
Stock prices swooned through the third quarter. Declining 22% from its high, the S&P 500 marked its low for the year on October 4.
Well into the home stretch, the SPDR S&P 500 ETF (SPY), that tracks the namesake index, is up 1% for the year.
The European crisis has taken a heavier toll on developed market stocks with the iShares MSCI EAFE ETF (EFA) down nearly 15%.
The year has been squarely disappointing for investors expecting stronger growth and superior solvency of emerging economies to deliver superior returns. The Vanguard ETF (VWO) that invests in emerging markets is down 20% for the year.
Commenting on global stock markets, Dr. Sam Subramanian, Managing Principal of AlphaProfit Investments, LLC and Editor of the AlphaProfit's Premium Service Investment Newsletter said, 'The resilience of the U. S. economy and the corporate sector to financial distress in the euro zone has helped U. S. stocks fare better than foreign stocks in 2011.'
From a sector perspective, investors have favored defensive groups in this milieu of rising macroeconomic concern.
Utilities Select Sector SPDR ETF (XLU) and Consumer Staples Select Sector SPDR ETF (XLP) lead the year-to-date performance tables with double-digit gains. Laggards, Financial Select Sector SPDR ETF (XLF) and Materials Select Sector SPDR ETF (XLB) are down 19% and 12%, respectively.
Mutual Fund Picks for 2012 and the Best ETFs for 2012
Global economic and policy risks remain elevated.
Despite some progress made in resolving the sovereign debt crisis, many euro zone economies including Italy and Spain are struggling to finance their debt. Furthermore, several European countries are mired in a recession and dampening global growth.
There are policy risks in the U. S. as well. The inability of Congressional leaders in the U. S. to agree on fiscal reform adds to uncertainty.
Dr. Subramanian believes policy decisions made in Washington as well as Brussels and Beijing will have a major influence on the course of stock prices in 2012.
'While the U. S. economy has been resilient to troubles abroad, the economy is not immune to the risks of a European contagion or significant slowdown in China' asserts Dr. Subramanian.
'Asset allocation is likely to be tricky task for investors in 2012,' says Dr. Subramanian.
Elaborating, Dr. Subramanian adds, 'Trend following systems are likely to favor economically resilient groups, given this uncertain economic environment and the relative out-performance of such groups in recent months. Yet, U. S. corporate profits are relatively strong and stock valuation metrics are attractive.'
'Investors who eschew risk and lean too much towards avoiding economic cyclicality run the risk of underperforming the benchmarks particularly if global economic and policy risks subside', cautions Dr. Subramanian.
As such, a prudent course is to adopt a flexible and adaptive process like AlphaProfit's ValuM investment process that combines fundamental and technical factors to consistently choose the best Fidelity Select funds and the best sector ETFs.
AlphaProfit's Premium Service investment newsletter provides subscribers recommendations on best mutual funds, ETFs, and stocks. The AlphaProfit's Core and Focus model portfolios will be repositioned with new mutual fund picks for 2012 and the best ETFs for 2012 on December 30.
Compounding at an annual rate of 20.1%, a dollar invested in AlphaProfit's selection process in 1994 is now worth $27.13 while a comparable investment in the S&P 500 is worth just $3.77.
Consistent selection of winning mutual fund picks has enabled AlphaProfit's Premium Service to rank #1 in Hulbert Financial's investment newsletter rankings 12 times.
During 2011, AlphaProfit enabled Premium Service subscribers to make money with mutual funds picks like Fidelity Select Biotechnology (FBIOX), Fidelity Select Utilities (FSUTX), and Fidelity Select Defense & Aerospace (FSDAX).
Timely selection and removal of ETFs SPDR Gold Shares (GLD), Market Vectors Gold Miners ETF (GDX), Vanguard Health Care ETF (VHT), and PowerShares S&P SmallCap Health Care ETF (PSCH) enabled subscribers to lock gains.
Dr. Subramanian said 'As macroeconomic conditions deteriorated around the world, AlphaProfit ValuM investment process became progressively defensive in 2011, a factor that helped in providing subscribers downside protection.'
'We look forward to provide the best mutual fund picks for 2012 and the best ETFs for 2012. We also intend to provide timely advice on asset allocation changes to help investors maintain adequate downside protection during the bearish phases of 2012 and position their portfolios for market-beating gains during the bullish phases of the year', concluded Dr. Subramanian.
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AlphaProfit Investments, LLC is an independent investment research firm based in Sugar Land, TX. AlphaProfit publishes the AlphaProfit Sector
Investor's Newsletter, edited by Dr. Sam Subramanian. Leveraging sector funds, the Newsletter provides high-performance model portfolios
with Fidelity funds and exchange-traded funds.
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