About a month ago I published the Top 10 Worst Investments of 2011 and it was easy to come up with a gigantic list—in fact, I had to edit it down to choose the absolute best of the best (or rather, worst of the worst)!

However, it is a sign of our financial times that when I looked back at 2011 to do a “Top 10” or even a “Top 5” best investments list, it was difficult to even come up with even a few that I considered great!

2011 was certainly a tough year to be an investor.

But a promise is a promise and I certainly do not want to leave you hanging, so without further ado, here are my Top 5 Best Investments of 2011:

5. S&P 500 (Up 0.4%)

You know it’s a rough year when one of the top five investments doesn’t even beat inflation…ouch! That’s right, the S&P 500 has actually recovered a bit this year and is essentially flat on the year now. (I know, I know, don’t let my excitement overwhelm you!). But luckily it gets a little better with our next top investment…

4. DOW (Up 6.2%)

Well here is one I didn’t think I would get to mention this year…the DOW has actually recovered in recent weeks and is now up 6.2% on the year!

3. Gold (Up 12%)

Gold had yet another strong year, although you certainly could have gotten creamed investing in gold this year had you bought it at its peak (it was over $1900 / oz. at one point!). But had you simply purchased it at the beginning of the year (it closed on 12/31/2010 at $1421.60) and sold it at the end of the year at its closing NY spot price of $1592.30 as of 12/27/2011, you would be up $170.70 per ounce, or 12%.

Not too shabby, considering it has now been in bull market mode for 11 years!

2. EUO (ProShares Ultra-Short Euro, Up 20%)

We all know that the euro had a tough year. One of my personal best investments (or rather, trades) was a trade I made this year using the ProShares Ultra-Short Euro fund (I wish I had put more money into this trade!).

I personally entered this trade on June 29th at $16.91 per share, and then watched it carefully for the remainder of the year. I closed out this trade yesterday on 12/28/2011 at $20.32 per share for a gain of $3.41 per share or 20%. (However, as I held this for less than one year I’ll owe short-term capital gains on this…ugh).

In general, you need to be extremely careful with these leveraged ETF’s, which is why I watched it closely all year…they do NOT always do “what they are supposed to do” so you need to constantly monitor these trades if you decide to get into them.

Also please note this was one of my personal trades, and had I done this as in the gold example above and bought it “at the beginning of the year” at $20.31 and sold it yesterday at $20.32 it would have been basically flat on the year!

I will start taking detailed notes (or heck, publishing them on this blog) when I enter trades so that you’ll have an idea of my mindset at the time I am doing it as many of you have asked for that…looking back I remember thinking that the euro was very overvalued due to all of the problems I saw looming in Europe and this particular fund had fallen significantly (from $20.31 all the way down to under $17) so that’s why I entered it then (and exited it now…I want to realize my gains and move into other more attractive trades).

1. Anti-Whitney Tilson Fund

Ah, the Anti-Tilson fund. This is one that I wish I would have put actual money into! The Zero Hedge whipping-boy fund is still going strong…since originally published on 11/11/11 you would be:

  • Long GMCR: Up 11.86% since 11/11/11
  • Short NFLX: Up 18.59% since 11/11/11

And there you have them…my top 5 investments of 2011!

If my little list has only whet your appetite for more, CNBC also just published their “Best Of 2011” list yesterday and you can find it here…they have ten slides and divide up their “top” investments by category including:

  • Top currency (Yen, up 4%, despite all of the “interventions”),
  • Top commodity (Live Cattle, up 21%),
  • Top IPO (GNC, up 83%), and
  • Top short trade (First Solar, up 75%)

I’ll be back tomorrow with QnA (and predictions for 2012 if time and space permit…otherwise I’ll give you my 2012 predictions on Tuesday, January 3rd).

Did the Mayans have it right after all and will 2012 be the end of the world as we know it? Time will tell…I certainly hope not!

Until then, have a GREAT day and thank you very much for reading and contributing to our Kung Fu Finance community! Happy Holidays!

To your financial success,
— Kung Fu Girl