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 put you on a smoother path to retirement bliss.
Which isn't to say that they can't also rock your world, performance-wise. Far from it, in fact.
No, seriously
We launched the Fool's Champion Funds service back in March 2004, and since then, our list of recommended funds has beaten the market by more than 8 percentage points. Our best performer -- an international fund that recently counted the likes of News Corp. (NYSE:NWS-A) and Honda Motor (NYSE:HMC) among its holdings -- has returned more than 75% since it first received the newsletter's nod.
Another of our picks is a domestic fund that once specialized in smaller caps. Now -- thanks to outsized stock-picking success, a low-turnover strategy, and a legendary manager with the courage of his convictions -- it has morphed into a larger-cap fund. Recently, for example, its portfolio sported stakes in such big boys as Pfizer (NYSE:PFE), Intel (NASDAQ:INTC), Applied Materials (NASDAQ:AMAT), and Sears Holdings (NASDAQ:SHLD).
Since we recommended that one, it's risen by roughly 47%.
Believe me, I'm not writing any of this to brag. (OK, maybe I am -- just a little.) My main concern is that lots of smart folks simply don't give mutual funds the time and attention they deserve. And that's owed 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.
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. The latest issue of Champion Funds hits the streets today, so 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. Pfizer and Intel are Inside Value selections. You can check out the Fool's strict disclosure policy by clicking righthere.
