The best retirement funds may not be the highest current yield. The idea of best means the best fit for the investor. The stage of life and career should figure in the search for an investment fund for retirement. Younger investors may choose to grow their wealth by selecting a fund that emphasizes equity and capital growth. Older investors may focus on bonds and income or high-dividend funds. A sound retirement strategy focuses on the balance between stocks, bonds, and cash investments.

Investor Directed Strategy

Investors can configure a strategy to save and invest for retirement. They can consult experts and brokers to help plan a retirement, and professional help is a common approach. Modern technology provides another avenue, and the automated programs can make investment decisions to get the desired level of retirement income. Those close to retirement, or seeking to build cash reserves, can select funds that provide the highest yield and payouts. The cash positions that result from payouts provide investment portfolio balance and protection against volatility. The cash position in a portfolio enables higher spending, and flexibility to react to market conditions. Cash positions support further investment for value in a falling market or rising market.

A Growth Sector Strategy

The market has faster-growing segments as well as geographic and global zones of high growth. In US markets, Healthcare has seen fast growth and the sector has sustained it over a period of recent years. In the energy sector, despite overall volatility, some areas have shown steady and remarkable growth such as solar energy based companies. On a global basis, India has seen rapid growth in many areas of its economy, and this includes financial services as investing has spread amongst its growing middle-class.

Examples of Growth Sector Funds

Health and life sciences sector investments have performed well over a period of five to ten years. The background includes health care reform and technological advances in life sciences. Two notable examples are Janus Global Life Sciences and T. Rowe Price Health Sciences Fund as described below.
• Janus Global Life Sciences Fund Class A (JFNAX)- has returned 39 percent for the past year, 38 percent over the past three years, and 31 percent over five years.
• T. Rowe Price Health Sciences Fund Class No Load (PRHSX)- returned 43 percent over the past year, 36 percent over three years, and 33 percent over five years.

Solar Power on the Rise

Solar energy has grown steadily; trends in energy costs and public policy favor continued solar energy growth. The following describes some excellent examples.
• First Solar, Inc. First Solar (FSLR)- sells high-efficiency solar modules and develops power plants. Has a venture with Caterpillar, and a YieldCo designed to finance solar installations and pay dividends to investors.
• SunPower Corp. SunPower (SPWR) makes solar panels with advanced high-efficiency technology. Partnered with Apple to build two solar projects in China.
• SolarCity Corp. SolarCity (SCTY) provides financing and installation to power residential and commercial buildings.

Automated Retirement Funds

Those who do not wish to go through the markets and extrapolate data to determine hot growth areas can simply let the modern information age do it for them. Life cycle or target date funds take the stress away from the investment decisions. The fees are higher than most mutual funds, but the service is customized. The investor inputs a target date for retirement and the amount they wish to receive as income. The software does the work, and the investor can track its progress.

The Investment Formula

Experts recommend balancing stocks, bonds, and cash to achieve retirement goals. The life cycle and target date funds mix stocks and bonds. For the out years, the balance favors growth stocks. It shifts to higher amounts of bonds and cash over time. Stocks and bonds and gradually more bonds for stability. The program mixes portions of income funds and increases that level as retirement nears.