I'm the kind of guy who likes to pick my own stocks. Since rolling my old 401(k) plans into an IRA account, my portfolio contains 24 individual stocks and exactly one mutual fund.
But I do love my one fund, Bridgeway Aggressive Investors 2
Bridgeway sent me an annual update on that fund the other day, and these missives are always interesting reading. Montgomery is quite frank about the performance of his babies, and plainly stated that a 16.7% return over the past year wasn't very good. The S&P 500 and the Lipper Capital Appreciation benchmarks both did better.
What's in it?
My one fund gives me exposure to 74 fresh stocks at the moment. There is almost no overlap between the fund holdings and my individual picks -- the fund owns just a few call options on Disney
The other 73 companies are an interesting mix. There are some I wish I could buy but can't seem to stop writing about, like Cisco Systems
In some cases, there's a stock I've sniffed and prodded in the past, but never pulled the buying trigger on, sometimes missing out on massive gains. Examples here include Southern Copper
Then again, I wouldn't touch some of these stocks with a purple plastic shoe, size 13 -- even though Crocs
There are a few opportunities I wish I had taken, some I never knew anything about, and others I'd never pick myself. Go ahead, John -- prove me wrong!
The ups and downs
Montgomery wishes that his investors would show more patience with short-term market swings. Some 17% of the money invested in Aggressive Investors 2 was pulled out in the March quarter after a disappointing calendar-year 2006. Investors returned in force by June -- after a swift 11% overall gain. The people who swung out and then back again in that time span missed out on "the biggest part of our run-up so far in 2007. Talk about poor timing."
I couldn't agree more. The stock market makes some unpredictable moves, but a stomach of steel can help you live with the downturns and enjoy the inevitable bounce, often to heights well above the starting point.
A long-term investing horizon can serve you well, whether you're invested in aggressive mutual funds or risky stocks -- or in anything else, really. Even gold prices aren't set in stone, you know.
John Montgomery has impressed our Motley Fool Champion Funds team enough to recommend three of his funds to our subscribers. Read more about Aggressive Investors 2 and find out all about the other two picks with a free 30-day trial of Champion Funds. If you don't love it, you won't owe a thing.
Fool contributor Anders Bylund owns shares in Disney, and BRAIX is actually his largest single holding. He holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure hurts so good.