Putting the Portfolio on Autopilot
Los Angeles Times (04/09/01) Vol. 105, No. 14 p.2; Friedman, Josh

For investors who want to play the market but are not interested in the entanglements that come with investing, financial planning experts recommend that they try autopilot funds. Autopilot funds are generally classified into four groups: index funds, which copy major market indexes; asset-allocation or "lifestyle" funds; "funds of funds" that combine mutual funds in a single portfolio; and balanced funds, which always maintain some combination of stocks and bonds. Meir Statman, a finance professor at Santa Clara University, admits that although autopilot funds lack the flavor and excitement of more popular funds, they do "get you to your goals." Statman adds that in the end, autopilot funds offer the investor more peace of mind because the funds not only minimize costs, but also spare the investor the regret that usually plagues investors when their fund picks do not perform for them.


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