For investors trying to get a better handle on choosing and managing an investment portfolio, here's an idea that is long overdue: Fantasy...

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For investors trying to get a better handle on choosing and managing an investment portfolio, here’s an idea that is long overdue: Fantasy mutual-fund leagues.


Sure it’s quirky, but a fantasy fund league is more personally productive than rotisserie baseball or football.


You’re not going to manage your own pro sports team, but you almost certainly will invest in funds and can turn game experience into real-life benefit.


The idea is simple: Run an imaginary fund portfolio, aiming for a specific performance goal and shooting for maximum accuracy and consistency rather than biggest returns.


You use the actual performance of real funds, but with imaginary cash and a scoring system that’s about more than maximum gains.


Fantasy-fund-league rules could vary based on the experience of the players, but you get to make them up because there’s no formal game out there, no Web site managing your fund “teams.”


Fantasy money is powerful because investors tend to be a bit cowardly when their own cash is on the line. They may have astute judgment, but they don’t always trust it.


Since no one has invented a fantasy-funds rulebook and scorekeeping system, here are things to consider when setting up your own league:


Players: Go it alone or with others.


On your own, manage a fictitious portfolio against your real one, or try several different investment styles to see what might make you most comfortable in the future.


Targets: Shooting only for top returns encourages risk-taking beyond what the normal investor can stand; your team should include only funds you might actually want to own in real life.


The season: Unlike a sport’s season, a fantasy-funds league should run at least three years. Set up interim rewards for quarterly or annual performance and consistency, but remember that investing is a marathon.


Rules: You’re trying to build asset-allocation skills, since studies show that how you spread money around is the biggest determinant of performance, larger even than which funds actually get picked.


With that in mind, limit choices to one fund per asset class.


A basic “team” might include one pick in the aggressive growth, growth, growth-and-income, bond, international, and sector fund categories.


Trading: To make your fantasy feel real, include all costs for changing your mind.


If you sell a fund that has made money, deduct applicable capital-gains taxes before reinvesting the proceeds.


If you opt for exchange-traded funds, subtract trading costs. If sales charges, redemption fees or anything takes a bite of your money, your fantasy portfolio should have tooth marks to prove it.


Prizes: For a real league, a small entry fee might liven things up. Losers, at various points in time, can buy the winners lunch. The biggest prize will be the lessons you learn about yourself and your investment strategy.


Chuck Jaffe is senior columnist at CBS Marketwatch. He can be reached at jaffe@marketwatch.com or Box 70, Cohasset, MA 02025-0070.