Monday, January 11, 1999

A Bang-Up Year

by SpottedFool

A year ago Thanksgiving, I picked up my first Fool book. Shortly afterward, I cleared out my mutual fund accounts. Just after last New Year's Day I started my own portfolio with the Foolish Four, and have added Rule Breakers and Rule Makers.

After a great year, I decided to take a look at my previous Wiser ways. The three mutual funds I was in have returned 5.87%, 19.25%, and -54.5% over the last year compared to 23.66% for the S&P.

Nearly one year later, my Fool-ified portfolio is up around 65%. Amazing. Amazing what common sense and non-overdiversification (mutual funds) can do. Pick good companies. Watch them run. Don't sell, even if all your friends say, "Amazon's up to $130? Sell! It can't last, especially when the market is going into the tank! Dow 5000!" (Actual quotes.)

Amazing, too, how one can become used to outstanding performance. After the Rule Breaker added Amgen, I thought it was a great pick, but didn't have any money to invest at the moment. Then, BANG!, Amgen wins over J&J and the stock takes off. Here I was regretting not being in Amgen when my portfolio went up more than 5% for the day! One can become used to outstanding performance, and want more. I guess mutual funds rely on the fact that people can become used to any level of performance.

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