Mutual Funds That Avoid Stock-Market Routs
NEW YORK (TheStreet) -- The credit crisis dragged down not only stocks but also corporate bonds, precious metals and real estate. Government debt, a haven for the most conservative investors, was spared.
Investors were shocked to see that their diversification plans failed to provide protection. The downturn revealed a difficult reality: Under extreme conditions, most investments move in the same direction.
But there were a few mutual funds that proved resilient. Those investments aren't correlated with stocks or bonds. When the stock market sinks again, you can bet that uncorrelated funds won't move in lockstep with other investments. As the stock-market rally picks up steam, it may be worth considering such funds before prices get out of control.
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