In the prior half century, equities in stock markets have been the best performing financial instrument compared to anything else. The returns on the stock market have on average exceeded 10%, some years higher and others lower, but far more than the corresponding returns of bonds, CDs and commodities. The outstanding performance is what has led the influx of capital into mutual funds. Before buying into a fund, it remains important to do research to identify say the top 100 mutual funds.

The primary way of evaluating whether a fund is a top 100 mutual fund is to look at its average return over several years, if not decades. However, the return is a number that by itself means very little. Instead, it must be compared to the performance of the entire stock market. So a good fund should exceed the average returns of 10% of total stock market indices.

The next common way to evaluating whether a fund is one of the top 100 mutual funds is to find out its volatility, or beta factor. The beta is an indicator of how wild the swings are. A beta of less than 1 means the mutual fund is less wild than the stock market, whereas a beta of greater than 1 means the mutual fund has a more strongly fluctuating price.

Mutual funds have fluctuating returns. It is important to contrast them with investments that have stable returns as in the following.

Individuals who are curious about stable yields but higher yield than a savings account might ponder over the money market account. Such accounts are kept in mostly very short term securities. At what institutions might an investor start a money market account ? It so happens that the little branch of a nation-wide bank has the power to offer these accounts. In addition, one may open an account on the web through online banks. Those who are concerned about the trustworthiness of internet-only banks should be comforted as long as the banking institution is licensed, deposits are insured by the FDIC in case of a disastrous collapse.

Another stable financial instrument is the GNMA fund, usually eclipsed by the sister firms Fannie Mae and Freddie Mac. All three manage real estate borrowing but GNMA funds stand out for being the most conservative. In the time of the economic meltdown caused at least partly by the property meltdown of 2007, Freddie Mac and Fannie Mae fell victim to hemmorhaging losses forcing a declaration from the Federal government to forestall financial panic. GNMA funds discovered that it was in a much better position, exhibiting little sign of being in need of a Federal government-mediated bail-out.

Finally, another stable instrument is the bond fund. Major conglomerates and governments need to borrow money so as to realize daily operations until sufficient revenue is generated to repay the loan. This financing cannot be done through a normal bank, but instead should be self-financed via the selling of bonds that are guarantees of payment. United States government bonds are amongst the most pervasively bought low risk investments in the financial world because purchasers pick them up with almost 100% confidence that the bond cannot default.

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