When “Dartboard Investing,” It Helps to Pick the Right Dartboard: A Comparison of Randomly Selected Stock
and Fund Portfolios

Abstract

When randomly selecting assets for a portfolio, are clients better served by financial planners choosing individual stocks or a group of mutual funds? It depends. For the financial planner, it remains vital to know a client’s trade-off between the possibility of a higher return from stocks, with commensurate chances of loss and the chance for more predictable, but lower, returns obtainable from purchasing portfolios of mutual funds.