Mark Muller

Mark Muller, center, works with fellow traders on the floor of the New York Stock Exchange Thursday, Dec. 11, 2014. A strong report on retail sales pushed U.S. stocks higher in early trading Thursday, easing investors’ jitters over the global economy and another slide in oil prices. (AP Photo/Richard Drew)

NEW YORK (AP)—Go big and stay home. Anyone who followed that strategy with their mutual funds in 2014 is likely sitting on another year of healthy returns.

Funds that focus on stocks of the biggest companies were some of the year’s strongest performers, while U.S. stock and bond funds generally did much better than their foreign counterparts. The line between winning and losing mutual funds was also more pronounced than in 2013, which means investors had to be choosier to make gains.

A winning strategy last year was simply to buy a stock fund—pick one, virtually any one, as 92 percent of them rose —and avoid most bond funds and then do nothing. This year 72 percent of stock funds avoided losses through Tuesday, according to Morningstar.

It may be a downer to see many stock funds drop when the main barometer of the U.S. stock market, the Standard & Poor’s 500 index, is setting multiple record highs. But it can actually be an encouraging thing. It shows the value of having a diversified portfolio, where portions move in different directions. If everything always moved the same way, it’s painful when the direction is down.

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