Lessons From the Fall: A Fund Junkie Special Report

Remember that March 31 account statement that's waffled from your tears? Now might be a good time to yank that out and make sure you're not forgetting the moral of its story.

Lessons Learned: 2000's Harsh Truths We Shouldn't Forget

The Halftime Club: A Record 220 Funds Were Cut in Half in 2000

It's Not Growth vs. Value, It's Growth and Value

Popular Funds Left You With a Tech Hangover

False Profits: Really in the Black?

Sector Addicts: Sector Funds Changing the Game and Not for the Better

Hocus Focus: The Downside of Focus Funds

If Now, Then How: Why Dollar-Cost Averaging Makes Sense

Cash Isn't King: Managers Don't Cash Out of Falling Markets

How to Build a Low-Maintenance Portfolio

Questioning the Buy-and-Hold Strategy

Bonds Have a Place in Most Portfolios

Foreign Funds Lower Risk, But Won't Do the Opposite of U.S. Stocks

The average tech fund, which took in more than 30 cents of every buck that went into stock funds in 2000, was down a jaw-dropping 63% for the past 12 months through the end of this year's first quarter, according to Morningstar. The average big-cap growth fund, which had more than a third of its money in tech stocks, was in the hole to the tune of 36%.

But tech blossomed again this April, with the Nasdaq Composite surging 15% to notch its best April. My savvy colleague Adam Lashinsky warned tech investors not to forget the past 12 months' harsh lessons. But since hope (or delusion) springs eternal, you may be feeling an antidiversification pang, or hear a little voice tell you there really isn't any reason to own anything but big-cap growth stocks and funds. A word of advice to those about to ramp up exposure to growth and tech funds: Apply the lessons of the past year or so to today's market.

That's exactly what I'll be doing this week, in Lessons From the Fall, a special package of new and recent stories about how and why you might build a diversified portfolio.

Here's what we have on tap for this week:

Why you should own both value and growth funds: Less volatility without sacrificing returns.

The Halftime Club: More than 200 funds lost half their value last year, highlighting the downside of riskier strategies.

Don't bet the farm: Before you buy shares of a sector fund, make sure your other fund managers aren't doing the same.

(Re)Building a diversified portfolio: Let's update a couple of model portfolios that would've given you marketlike and market-beating returns with below-market risk and below-average expenses.

Of course, that's just the icing on the cake.

During the past year we've talked about how a seemingly sensible building of a portfolio of popular growth funds, focus funds and sector funds would've left you with a fat tech hangover. You might think you're still in black due to 1999's steep, tech-driven gains, but for many investors a little back of the envelope math shows that they're flat or even in the red.

This isn't to say that tech and growth don't have a place in your portfolio; they probably shouldn't dominate it, though. During the past year we looked at how you might use our fund screens to build a diversified portfolio. We also looked at how bond funds and foreign stock funds can reduce volatility, and why they should be a part of almost any investor's portfolio.

Beyond what funds you might choose, we looked at the important issue of how you invest. Namely, when a buy-and-hold strategy makes sense and how investing a set amount monthly, known as dollar-cost averaging, can reduce your risk over time.

The bottom line is that there's no harm in getting excited about growth and tech funds again, but that's no reason to overcommit to them again.

>To order reprints of this article, click here: Reprints