How to Spice Up a Stodgy Index Portfolio

Growth stocks add zip to an all-index plan.


Your portfolio is not a place to take crazy risks, writes Selena Maranjian of the Motley Fool, who suggests socking most of it away in a broad-market index fund, such as the Vanguard 500 Index (or an ETF equivalent). But, as many of us know, index funds are boring.

That's why you might want to consider spicing up your portfolio with a few growth stocks. "That's what I'm doing in my own investment account," Maranjian writes. "I don't want all of my money in an index fund because I'd like my portfolio to grow faster than average, so a chunk of my nest egg sits in a variety of individual stocks." She's had a few successes, including turning a $3,000 investment into $210,000.

But which stocks? "The kinds of companies I'm talking about are tomorrow's Lowe's, Best Buy, and United Parcel Service.... These companies broke their industries' molds and introduced newer, better systems," she says. Before you rush out and buy the next UPS, remember that individual stock investing isn't for the lazy.