Picking Stocks Funds

Physician's Money Digest, April15 2004, Volume 11, Issue 7

In trying to find the right long-term stock mutualfund, physician-investors need to look at diversity.There are many funds that focus on a single industrysector or foreign country, or that own only 20 to 25stocks. With these funds, there may not be enoughmarket exposure, creating a risk that the fund will notdeliver strong long-term gains. It is also important toconsider a stock fund that holds to a consistent investmentstyle—such as low-expense index funds. Thesefunds are not actively managed and will perform onlyas well as the market it tracks. However, you can beconfident that the fund will consistently capture whatthe market delivers year after year.