AlphaProfit Provides New Mutual Fund Recommendations

The AlphaProfit No Load Growth model portfolio is reconstituted with best no load mutual funds in domestic, international, and emerging market categories.

Stocks are in the black for the year.

Fidelity Spartan 500 Index Fund (FUSEX) that tracks the large-cap S&P 500 index ($SPX) is up 10% for the year.

Euphoria on stimulus measures from central banks caused stock prices to spike on September 14.

Gains have however been trimmed since then on concerns of the fiscal cliff derailing the U. S. economy.

The sell-off has taken a bigger toll on smaller capitalization stocks.

Fidelity Spartan Small Cap Index Fund (FSSPX) and Schwab Small Cap Index Fund (SWSSX) that track the small-cap Russell 2000 index ($RUT) are down a hefty 10%. This decline has cut their year-to-date gain to just 6%.

While overseas markets lagged domestic markets during the early part of the year, losses in recent months have been modest here.

Fidelity Spartan International Index Fund (FSIIX) that tracks the MSCI EAFE index is up 7% for the year after losing nearly 6% since September 14.

Likewise, the Fidelity Spartan Emerging Markets Index Fund (FPEMX) that tracks FTSE Emerging Index is up 9% after losing just 4%.

From a regional perspective, optimism on stimulus measures spurring growth in China and other parts of Asia has helped stocks hold their footing during the recent sell-off.

Meanwhile, Latin America stocks have suffered the most on concerns of the region’s exports being impacted by the U. S. fiscal cliff and China’s leadership change.

Among Fidelity funds, Fidelity Pacific Basin (FPBFX) is essentially flat since September 14 while Fidelity Latin America (FLATX) has dropped 7%.

Commenting on the market environment, Dr. Sam Subramanian, Editor of AlphaProfit’s Premium Service Investment Newsletter said, ‘The sell-off in stock prices has accelerated since November 6. Investors were looking to the elections to improve the odds of Congress avoiding the fiscal cliff. The election results however maintain political status quo and leave the odds unchanged.’

‘Given what happened during the Congressional deliberations on raising the debt ceiling in 2011, investors are understandably nervous on the fiscal cliff outcome now,’ added Dr. Subramanian.

Navigating through the volatility, AlphaProfit No-Load, No-Transaction-Fee Growth Model Portfolio is up over 9% this year.

The model portfolio has benefited from contributions made by Fidelity Mega Cap Stock (FGRTX), Parnassus Workplace (PARWX), Wasatch International Growth (WAIGX), and Westcore International Small Cap (WTIFX) that are up 15%, 17%, 26%, and 17%, respectively.

The model portfolio has also benefited from dividend yielding stocks in the better performing Asian region while avoiding Latin American stocks. Matthews Asia Dividend (MAPIX) included in the portfolio has gained 12% during the past six months.

The Fiscal Cliff and Global Stock Markets

If Congress doesn’t act, over $600 billion in government spending cuts and tax increases will trigger automatically at year-end.

This combination of spending cuts and tax increases has the possibility of measurably impacting GDP growth in 2013.

Negotiations between the two parties on the fiscal cliff issue are likely to be messy and pressure stocks in the near-term.

However, investor pessimism is already high. The American Association of Individual Investors’ bearish sentiment reading at 49% is well-above its long-term average of 30%. This could limit the downside in stock prices.

Dr. Subramanian urges investors not to lose sight of the positives.

Dr. Subramanian points out, ‘The U. S. housing market has bottomed and is recovering. The job market, though not improving rapidly, is moving in the right direction. The European Central Bank is likely to cut interest rates soon in light of weak economic conditions and high unemployment in the continent.’

Additionally, stocks are valued quite reasonably at 14 times earnings, more than 10% below their five-decade average of 16.4.

Given these positives, Dr. Subramanian asserts stock prices should rise if Congress gets its act together before the end of its session and avoids the fiscal cliff. As such, he views declines from fiscal cliff concerns as a buying opportunity.

Best No Load Mutual Funds for 2013

AlphaProfit’s no-load mutual fund model portfolio is repositioned with new no load mutual fund recommendations. Learn more about AlphaProfit’s Fidelity fund recommendations and Fidelity funds model portfolios .

This model portfolio has gained 85% during the past four years, compared to the 55% advance for its benchmark comprising of broad U. S. and foreign indexes.

The portfolio has benefited from strong performance of selections like Harding Loevner International Small Company (HLMSX), Janus Venture (JAVTX), Janus Triton (JATTX), and Matthews India (MINDX) during the past four years.

Looking ahead, Dr. Subramanian said, ‘Market uncertainty is high at this point. Our top priority is to help subscribers protect their gains. At the same time, we are cognizant of attractive money-making opportunities opening up for investors willing to look beyond fiscal cliff concerns.’

‘We are including a mix of aggressive and defensive best no load mutual funds so that subscribers do not have to take on a nerve-wracking volatile ride before adding to their 2012 gains in 2013,’ concluded Dr. Subramanian.