In the world of investing, mutual funds have a well-deserved reputation for being buttoned-down affairs -- at least relatively speaking. After all, while a portfolio of nothing but stocks can subject your nest egg to stomach-churning performance gyrations, a portfolio of well-chosen funds can set you on a glide path to retirement bliss.
Which isn't to say that they can't also rock your world performance-wise. Far from it, in fact.
A little more than two years ago, we launched the Fool's Motley Fool Champion Funds newsletter service. Since then, our list of recommended funds has beaten the market by more that 13 percentage points. Our best performer -- an international fund that recently counted the likes of Sony
Another of our picks is a domestic fund that once specialized in smaller caps. Now -- thanks to outsized stock-picking success and a low-turnover strategy -- it has morphed into more of a mid-cap fund that recently sported stakes in diverse companies such as Glamis Gold
Since we recommended that one, it's risen nearly 50%.
Less than zero?
What's more, all of this outperformance has come amid muted levels of volatility. And actually, even "muted" is an exaggeration. Of all the funds we've recommended in the newsletter thus far, five have posted a loss. Four of those funds have been recommendations for fewer than six months, and the biggest loss of all clocks in at just 3.1% as I type.
Believe me, I'm not writing any of this to brag. (OK, don't believe me; maybe I am -- just a little.) My main concern is that lots of folks simply don't give mutual funds the time and attention they deserve. And that owes at least partly, I suspect, to a sense that fund investing is a staid affair that can't possibly offer the thrill of victory that can come -- at least potentially -- with investing in individual stocks. I beg to differ.
The Foolish bottom line
With mutual funds, the thrill ain't gone -- though the potential for agonizing defeat that comes with a portfolio of just individual stocks is sharply reduced. (See above for details.)
The good news is that funds and stocks can live peacefully and profitably in the same portfolio -- and the Fool provides a veritable cornucopia of information you can use to make smart investment decisions on both fronts.
If you'd like to sneak a peek at Champion Funds' market-beating list of recommendations -- along with all of the newsletter's back issues, model portfolios, and members-only discussion boards -- there's additional good news: A free 30-day guest pass is available right here. I encourage you to take the service for a risk-free spin, compare our performance with that of your own portfolio, and proceed ... Foolishly!
You knew that was coming, right?
This article was originally published on April 4, 2006. It has been updated.
Shannon Zimmerman runs point on the Fool's Champion Funds newsletter service. At the time of publication, he didn't own any of the securities mentioned above.You can check out the Fool's strict disclosure policy by clicking right here.