Rather than concentrate your holdings in these stocks, you could find most of them in a financial services index exchange-traded fund like the Financial Select Sector SPDR ETF (XLF). The fund is up 14 percent for the 12 months through July 11 and charges only 0.16 percent for annual expenses.
Better yet, cast an even wider net that would capture nearly all of the public companies that might be merger or acquisition candidates. Consider a total market fund such as the Vanguard Total Stock Market ETF (VTI), which holds nearly the entire U.S. stock market and charges you 0.05 percent annually.
Virtually reflecting the performance of the U.S. stock market as a whole, the Vanguard fund is up nearly 20 percent for the 12 months through July 11. Although finding a fund manager who can score big on a merger or acquisition is always appealing, that manager is always looking for a relatively small fish in a huge pond. It's better to fish the entire pond.
(The opinions expressed here are those of the author, a columnist for Reuters.)