The Year of Living Dangerously

The past year was originally forecast as the year to play it safe in investments. The old big blue-chip stock funds were supposed to dominate the bull market. However, as the Federal Reserve stopped raising interest rates and the economy grew stronger than expected, it turns out the riskier investments proved to be smarter plays.

US News and World Report

recently rated the performance of the 25 largest mutual funds, and some of the strongest performers included the international fund Fidelity Diversified International (up 23%; FDIVX). In addition, emerging market funds collectively were up a robust 32%. For the 6th straight year, it also proved wise to invest in small cap funds as their gains trumped large caps.