I would love to be the proud driver of some road-hugging, head-turning little sports car. A vehicle that raises my blood pressure and my insurance rates. A speedster that cries out for driving gloves -- and perhaps an ascot. Such a car would help me forget the new gray hairs I spot each morning.

Instead, I drive a minivan.

Why do you care what I drive? Right now, you don't. But stick with me; there's an analogy on its way.

The mutual fund minivan
If you'd told me three years ago that I would be driving the official vehicle of the Soccer Mom, I would have said that was as likely as my having three kids within three years.

Would have.

In the six months since my automotive purchase, I've stopped apologizing for my minivanity, and I've actually become a fan of my Honda Odyssey. It's safe. It's comfortable. It doesn't cost much to maintain. It fits three car seats comfortably. Maybe it's not flashy, but there are enough cup holders for every passenger to have at least six beverages. It's exactly the vehicle I should have.

I fondly refer to mutual funds as the minivans of the financial world. Are you going to impress people at cocktail parties by talking about your funds? Nope. Are you going to check on your funds every day to see how they're doing in comparison with the market? 'Fraid not. Are you going to lose sleep if it suffers a little ding? No way.

A full garage
I enjoy investing in small-cap companies and high-growth stocks. It's a great feeling to see a huge bump in share price, kind of like taking some teenager off the line in a stoplight drag race. But that's for my aggressive money. Such high-adrenaline investing should make up only a small portion of a portfolio, and you need to be willing to roll with the ups and downs inherent in such a strategy.

Funds don't give you that same roller-coaster ride. Instead, they provide:

  1. Safety. The instant diversification of a good mutual fund spreads your bets across several stocks, so your dollars won't be tied to the fate of any one story.
  2. Practicality. Funds allow you to play sectors, countries, or asset classes without putting in hedge-fund-like research to winnow the prospective stock picks.

Try one on for size
Dodge & Cox International Stock (DODFX) is a superb mutual fund. It makes the choices for you and lets you sleep like a baby -- actually, I have 6-month-old twins, so I would argue you could sleep much better than a baby. Dodge & Cox's portfolio (as of June 30, 2006) is, as its name suggests, full of international titans, such as Vodafone (NYSE:VOD), HSBC (NYSE:HBC), and GlaxoSmithKline (NYSE:GSK). Since the fund was tapped in the June 2004 issue of our Motley Fool Champion Funds newsletter service, it has increased 79% in value, compared with 16% for the market at large (as measured by the S&P 500). Champion Funds analyst Shannon Zimmerman doesn't believe that that performance will slow down in the future, either.

For fans of value stocks, Ariel Focus (ARFFX) provides the sort of practicality the minivan is known for. Ariel Focus, which was highlighted as a fund to watch in a recent issue of Champion Funds, fits in Morningstar's "large value" category. It held just 21 stocks as of August 31 (hence the "Focus" moniker), including significant positions in Dell (NASDAQ:DELL), Omnicom Group (NYSE:OMC), Gannett (NYSE:GCI), and JPMorgan Chase (NYSE:JPM). Even with a very concentrated portfolio (which increases the chances for volatility), this fund's focus on stable blue chips trading at a discount to the broader market should provide protection in case of a crash.

Shifting into drive
But keep in mind that not every minivan is as satisfying as a Honda Odyssey (shameless plug, I know), and not every mutual fund is as impressive as Dodge & Cox or Ariel Focus. When searching for choice mutual funds, follow the comprehensive set of principles that Shannon uses. Among the most important are:

  1. Fees. Look for below-average expense ratios, and don't give load funds the time of day. (As Shannon says, "With mutual funds, you usually get what you don't pay for.")
  2. Managerial tenure. Make sure the person driving the bus has experience (Shannon generally requires five years) and will stick to his stock-picking guns in bull and bear markets.

If you'd like to test-drive Shannon's service and see which funds he likes best for new money now, you can do so free for 30 days. Overall, his funds boast a total return of 19%, compared with 12% for the S&P 500 over the same period. A trial gives you full privileges to the service.

Click here to take a free, no-obligation test-drive of Champion Funds and get on the road to a healthier, happier, safer portfolio.

This article was originally published on April 17, 2006. It has been updated.

Roger Friedman, managing editor of newsletters and author of Nipple Confusion, Uncoordinated Pooping and Spittle: The Life of a Newborn's Father , loves his minivan. He does not own shares of any companies mentioned in this article. Vodafone and Dell are Inside Value selections. Dell is also a Stock Advisor choice. JPMorgan Chase and GlaxoSmithKline are Income Investor picks. The Fool'sdisclosure policynever sleeps.