First things first: I'm a big fan of Berkshire Hathaway
What's more, if Berkshire were a mutual fund rather than a publicly traded holding company, I would long ago have given it the nod in Champion Funds, the Fool investing service that I head up. That said, I'd couch any Berkshire recommendation in qualified terms, something along these lines:
While Berkshire Hathaway is a rock-solid buy-to-hold proposition, investing in it exclusively can be hazardous to your portfolio's wealth. Indeed, most Berkshire investors will likely want to offset its buttoned-down style with at least a dollop -- and perhaps a heaping helping -- of growthier fare.
Buffett's value orientation has resulted in long-term overachievement, it's true, but his famous aversion to paying a premium for stocks has also led to missed opportunities. Consider, for example, the late-'90s growth party that Buffett more or less opted not to attend. And just in case you have no patience for "intelligent opportunism" and think -- with some justification -- that the man was simply ahead of his time, consider as well Berkshire's showing during the recent (and more fundamentally based) rally in smaller-cap stocks.
To wit: With a stock portfolio recently dominated by behemoths such as Coca-Cola
On an important level, of course, the stock's recent showing is a matter of style: Large-caps have been out of favor over the period. With that in mind, Buffett's habit of sticking tenaciously to his knitting may have set the stage for outperformance if the big boys' recent upswing continues.
The Foolish bottom line
Still, if Buffett's gumption proves he's no investment wimp, investors who hew exclusively to value-priced large-caps may want to get a booster shot of intestinal fortitude. Yes, smaller-cap stocks and growth-oriented fare can lead to greater volatility and risk, but in the context of a thoughtfully designed portfolio, holding those asset classes alongside Buffett-like stocks simply makes smart asset-allocation sense.
Moreover, if you dial up your exposure to racier fare via well-chosen mutual funds, the additional risk you take on will be mitigated by whip-smart diversification. It's the best of both worlds -- or at least it can be if you pick the right funds.
If you'd like some help on that front, consider taking Champion Funds for a 100% risk-free spin. Our market-beating list of recommendations includes keepers plucked from all corners of the market. So if you're looking for racier fare to offset a conservative stock portfolio -- or for a Buffett-like fund that can reduce the volatility of a smaller-cap orientation -- not to worry: We've done the homework for you. Just click here to give Champion Funds a whirl.
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. Coca-Cola and Anheuser-Busch are Inside Value recommendations. The Fool has a strict disclosure policy.