The Lone-Fund Portfolio

One may be the loneliest number, but for skittish investors it may provide some much-needed solace.

We're talking, of course, about a one-fund portfolio.

You already know that owning too many mutual funds is at best redundant, at worst a costly drag on your returns. There's virtually no reason to own more than eight funds, and many investors need far fewer.

"Some smaller investors -- such as those with portfolios less than $200,000 -- could certainly do with just one equity and one bond fund," says Ed Osborn, a principal with the portfolio management firm Bingham, Osborn & Scarborough. ...