Financial Sector Funds May Be the Best Way to Play Merger Game

Money managers and analysts say the recent financial services firms' shopping spree should continue -- helping the surging sector stay on the comeback trail.

Does that mean investors should rush out and buy a sector fund that taps into the frenzy? No, and yes. Analysts say it's never a good idea to bet on a stock or sector simply because of acquisition hopes. For one thing, no suitors may emerge; for another, the merger may not work.

"It's pretty hard to guess what the next takeout will be. You can wait forever and never get asked to the dance," says Bruce Olson, who runs institutional portfolios for Milwaukee-based Strong Funds. ...