The Best Mutual Funds for 2012 and Top ETFs for 2012: AlphaProfit to Provide New Recommendations
The AlphaProfit Focus and Core model portfolios will be reconstituted on March 30 with the best mutual funds for 2012 and top ETFs for 2012.
Fears of the European sovereign debt crisis have now faded. Stocks have been on an unstoppable rally since 2011's fourth quarter.
Better-than-expected corporate earnings and U. S. economic data have helped to add nearly $3.5 trillion in value to U. S. stocks from their October lows.
On March 19, the S&P 500 Index ($SPX) closed at its highest level since May 2008.
Small-cap stocks have done better. The S&P SmallCap 600 Index ($SML) has risen to an all-time high while the Nasdaq Composite Index ($COMP) has set an 11-year high.
The volatility index ($VIX), a measure of investor fear is down 70% from the highs set in the third quarter of 2011.
Discussing the recent performance of the U. S. stock market, Dr. Sam Subramanian, Editor of AlphaProfit's Premium Service Investment Newsletter said, 'Investor confidence has improved in the past six months as U. S. economic indicators suggest acceleration in growth. This has manifested in many ways. Stock price volatility is down. The strongest rallies have materialized in economically sensitive sectors while defensive sectors have taken the backseat.'
Financial and technology stocks have led the stock market rally since October 2011. Among top ETFs for 2012 are Financial Select Sector SPDR ETF (XLF) and Vanguard Information Technology ETF (VGT) up over 40% and 34%, respectively.
Mirroring the performance of top ETFs, Fidelity Select Financial Services (FIDSX) and Fidelity Select Technology (FSPTX) with gains of 45% and 34%, respectively are among the best mutual funds for 2012.
In contrast, Utilities Select Sector SPDR ETF (XLU) and Consumer Staples Select Sector SPDR ETF (XLP) are up 8% and 17%, respectively. Fidelity Select Utilities (FSUTX) and Fidelity Select Consumer Staples (FDFAX) are up 10% and 20%, respectively.
Healthy dose of economic sensitivity included in the AlphaProfit Fidelity and ETF Core and Focus model portfolios enabled them to gain between 24% and 27% since October 2011.
Subscribers also scored handy gains from several AlphaProfit stock recommendations. Large-cap stock recommendations, National Oilwell Varco (NOV) and Textron (TXT) reached their target sell prices to deliver readers gains approaching 16%. Small-cap stocks Ann, Inc. (ANN), Jabil Circuit (JBL), and United Therapeutics (UTHR) produced gains of 15%, 18%, and 19%, respectively in just 4 to 8 weeks each.
While Dr. Subramanian is bullish in his long-term outlook for stocks, he is less enthusiastic near-term.
'Investor expectations for U. S. economic growth, job creation, and corporate earnings are running high. Less-than-robust economic data or first quarter corporate earnings can cause stocks to surrender some gains as investors lock profits. The decline is however likely to be modest', explained Dr. Subramanian.
The decline can mark the start of a range bound market for the next some months as stocks consolidate recent gains.
However, stocks are likely to add to their gains over the longer-term. Continued recovery from the Great Recession and modest valuation can support higher stock prices.
Dr. Subramanian points out, 'The 46 basis point increase in the 10-year Treasury yield is encouraging at this stage of the economic cycle as it confirms improvement in economic conditions'.
The strong recovery and growth in corporate profits have helped to limit the expansion in P/E multiple for stocks. S&P 500 companies trade at just 14.1 times earnings even after their strong advance since 2009.
The Best Mutual Funds for 2012 and Top ETFs for 2012
AlphaProfit's sector-based Fidelity & ETF Core and Focus model portfolios will be repositioned with the best mutual funds and top ETFs on March 30. Learn more about AlphaProfit's Fidelity fund recommendations and ETF model portfolios.
Compounding at an annual rate of 20.6%, a dollar invested in this selection process in 1994 is now worth $30.61 while a comparable investment in the S&P 500 is worth just $4.20. This market leading performance has enabled AlphaProfit Premium Service investment newsletter to bag Hulbert Financial Digest's #1 rank 12 times.
During the past three years, the Fidelity and ETF Core and Focus portfolios have gained between 79% and 85%.
Although 2011 was a tough year for many investors, AlphaProfit's market timing system got the key turning points correct as in prior years. This enabled AlphaProfit subscribers to thrive in 2011.
Seeking the shelter of defensive sectors, subscribers made money from the 21% gain scored by iShares Dow Jones U.S. Pharmaceuticals (IHE) and the 19% gain scored by Fidelity Select Biotechnology (FBIOX).
AlphaProfit's proven sector selection method has come through in 2012 as well providing a timely entry into the housing sector. The result: Subscribers have earned 25% from SPDR S&P Homebuilders (XHB) and 18% from Fidelity Select Construction & Housing (FSHOX) in less than 3 months.
Looking ahead to the new mutual fund and ETF recommendations Dr. Subramanian said, 'Our objective is to continue helping subscribers invest in the best mutual funds for 2012 and top ETFs for 2012 at the right allocation levels. We look forward to help subscribers add substantial value to their accounts by blending recommendations for the best mutual funds and ETFs with the right market timing advice.'
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By Hulbert #1 rank winner Dr. Sam 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.
It also includes actionable stock recommendations. This newsletter features among MarketWatch's top 10 investment newsletters and has won
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