So here we are, coasting along quite nicely with the S&P 500 up more than 15% for the 12 months ending with April. For equity investors, these have been fat and happy times indeed.
May-hem
And then along comes May, a month that has so far seen a pullback of roughly 3%. Ugh, I hear some of you saying -- don't remind me. Thing is, downturns provide important opportunities for savvy investors, and that's true on at least a couple of fronts.
For starters, when the market takes a tumble, you can snap up shares of high-quality companies at a discount. Intel
And another thing
Downturns also give you a chance to stress-test your portfolio.
If you plan to be in the market for the long haul (and you know you do, Fool), you'll need to get comfortable with the market's inevitable ebbing and flowing. One way to do that is to use a market slump to get a bead on whether the allocation mix you may have haphazardly backed into is built for speed -- or to go the distance.
For example, if your holdings cluster around big-cap growth stocks like those I mentioned above, you may want to consider balancing them out with more value-oriented fare like Bank of America
Fund-amental
Beyond that -- and as the guy who runs point on the Fool's Champion Funds newsletter service -- I firmly believe that the best and most convenient way to construct a smartly allocated portfolio is with funds. Trouble is, the vast majority of 'em are overpriced laggards.
That's precisely why Champion Funds exists. Using the same kind of analytical techniques that stock jocks bring to bear on individual equities, we zero in on those keepers that have what it takes to beat the market over the next three to five years and beyond. And so far, we're getting the job done. Indeed, since opening for business back in March 2004, our list of recommended funds has beaten the market by more than 11 percentage points.
The Foolish bottom line
What's more, in addition to cherry-picking the best the fund industry has to offer, we've put 'em together in model portfolios, stress-tested investing templates that you can tweak and tailor to your heart's content.
Want a sneak peek at the whole shebang? A free 30-day guest pass is yours for the snagging. There's no obligation (at all) to subscribe, so just click here to get started. And in the meantime, don't let the market's current slump stress you out. Put it to good use and conduct a portfolio stress-test instead.
Shannon Zimmerman runs point on the Fool's Champion Funds newsletter service and, at the time of publication, didn't own any of the securities mentioned above. Intel and Dell are Inside Value picks. Dell and eBay are Stock Advisor picks. Bank of America, Duke Energy, and Merck are Income Investor picks. You can check out the Fool's strict disclosure policy by clicking right here.
