Each asset class for mutual funds carries its own risk/reward potential. Investors (or financial advisers helping investors) should consider their ultimate goals and time horizons when using mutual fund asset class information to determine the best mutual fund or funds to help them reach those goals.

In this article, you will learn mutual funds to buy now in each of the mutual fund asset classes. When considering mutual funds to buy now, keep in mind that performance is based on current data available and will change over time. The three broad categories of asset classes for mutual funds are:

1. Money markets

2. Bonds

3. Equities

Action Steps
The best contacts and resources to help you get it done

Invest in money markets while getting ready to move into other mutual fund asset classes

Ideally, the money market asset class for mutual funds will earn better than your savings account and be just about as liquid. It is an easy place to park your money if you already have your funds with a mutual fund company and want to sit out some market fluctuation or want to time when you buy into different mutual fund classes.

I recommend: Fidelity Investments, Janus and T Rowe Price money market funds are a good place to park your money because you have access to their full range of mutual funds. Each company has many choices for different mutual fund classes when you are ready to jump in.

Learn about bond funds as a mutual fund asset class

When considering bonds as an asset class for mutual funds in your portfolio, for purposes of asset classification in mutual funds, the term 'bond funds' can be further divided into many categories, including some that may be more tax efficient given your financial situation. For purposes of this article, we will discuss general bond funds.

I recommend: Bond mutual funds to buy now include the following long-term bond mutual funds: T Rowe Price Corporate Income and Calvert Long Term Income. Intermediate-term bond funds include Target Total Return Bond and Loomis Sayles Investment Grade Bond A. Short-term bond funds include Weitz Short-Intermediate Income and MainStay Short-Term Bond A.

Discover some top rated stock mutual funds

When it comes to the equity asset class of mutual funds, equities (or stocks) can be categorized by domestic stock funds that are large-cap, mid-cap or small-cap. 'Cap' refers to the capitalization of the underlying stocks in that mutual fund.

I recommend: For the mutual fund asset class of equities, some of the top performing large-cap mutual funds include Janus Contrarian and CGM Focus. Some leading mid-cap equity mutual funds include Nuveen Tradewinds Value Opportunity A and API Efficient Frontier Value Primary. Some small-cap funds are John Hancock Small Cap Intrinsic Value A and Pacific Advisers Small Cap A.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  What is best performing today may not be best performing tomorrow. It is important to consider your time horizon when choosing asset classes for mutual funds for your investments. A financial adviser can help you determine which fund is right for you. If you like to invest on your own, when researching asset classes for mutual funds, consider that you may need to ride some market fluctuations while keeping your original time horizon in mind.