The market's recent havoc has me pondering my hardcore commitment to equity investing. I invest in the market primarily through mutual funds, which can, of course, provide an important layer of insulation when the market goes haywire. Still, if your portfolio is anything like mine -- or if you're invested in a basket of individual equities -- my hunch is that it's looking a little worse for the wear these days.
Take the long way home
Make no mistake: At 41 -- and with a good 20 years to go before retirement -- I realize that the stock market is the place to be. What's more, since our focus at Champion Funds -- the Fool newsletter service that I head up -- is on the long haul, the vast majority of the recommendations I've made for members are top-notch stock funds.
With that in mind, it's a good thing that our picks run the market's gamut. We've zeroed in on funds that favor buttoned-down big boys such as Citigroup
And that's, of course, by design. After all, assembling a portfolio that provides diverse exposure to the market's various styles and cap ranges can go a long way toward cushioning your portfolio when the market hits the skids.
Sliced and diced
That said, I've also tapped a trio of bond funds for Championship status because they too can help shore up a portfolio during rocky times -- and because savvy investors know that, as retirement time approaches, the fixed-income slice of their portfolio pie charts should grow larger.
How large? Good question -- and it's one we've addressed with each of our service's three model portfolios. As you'd imagine, the bond slice of the aggressive model is just a sliver (one that's occupied by a foreign pick and a high-yield keeper, at that), but our moderate and conservative lineups sport much more substantial exposure to the fixed-income market.
Bang for your bond buck
As important as it is to ask and answer the "how much" question, it's just as crucial to zero in on the very best bond funds the industry has to offer. Your carefully calibrated asset mix can only be as strong as the investments you've slotted into it, and every Foolish investor wants to get the most for his or her investing buck -- whether that buck is plunked down on stocks or bonds.
With that in mind, one option might be to go to with an index tracker such as Vanguard's venerable Total Bond Market Index
That's not too shabby, but I think you can do even better with a choice actively managed pick. Indeed, the fund we've recommended that's most comparable to Vanguard's index offering holds the upper hand, return-wise, over the three-, five-, and 10-year trailing periods.
The upshot? A $10,000 investment in our Champ 10 years ago would have earned nearly $1,800 more than a similar investment in Total Bond Market Index.
All shall be revealed
If you'd like to check out our take on this fixed-income contender -- not to mention the newsletter's complete list of recommended funds and model portfolios -- just click here, and a free 30-day guest pass is yours for the taking. There's no obligation to subscribe, so give it a whirl and see if you can't use Champion Funds to identify both stock and bond funds that can help you build a portfolio that's built for speed -- and for distance.
At the time of publication, Shannon Zimmerman didn't own any of the companies mentioned. Vodafone is a Motley Fool Inside Value pick, and Bank of America is a Motley Fool Income Investor pick. You can check out the Fool's strict disclosure policy by clicking right here.
