Tuesday, May 11, 1999

A New Fool's Plan

by TonyG

I am fairly new to the idea of investing in individual stocks, having cut my teeth in the mutual fund arena for the past 12 years. My first year in mutual funds could have easily been my last. I had selected four funds to invest in that first year. At the end of the year I had less money than when I started. Oh, the psychological battle raged (from "this is a stupid way to try and make money" to "you obviously don't know what you are doing, so why don't you just give up").

Somehow the voice of reason eventually won out with a very simple statement: "Why are you looking at these things so much, just let them be." And let them be is what I did.

So now here I am 12 years later on the threshold of a new journey. This is a little more complicated than mutual funds. You need to make some arrangements first before you can join this party (i.e., finding a broker, etc.). I thought it might be helpful to share some of my thoughts on what plan of action I have. Please realize this is still a work in progress. As I read more, absorb more, understand more, my perspectives may change. But for now, this is where I'm at:

First I plan to invest some money in the Foolish Four stocks as the foundation of my portfolio. Don't have much else to say about that at this time. Next I plan to invest some money in two companies I very strongly believe in: eBay and AOL. I feel the market for their services is virutally unlimited at this time, when you consider how many people are not online, not only in the U.S. but throughout the world. As we progress toward a global economy, besides trading between nations there is going to be trading between individual people at an accelerated pace. I eventually expect these two companies to become stalwarts in my portfolio (as described by Peter Lynch in his book "One Up on Wall Street").

The third leg of my agenda will be to invest some money in a few of the small caps via the Foolish 8 screen.

I know that, just as a young child first learning to walk, I will have some stumbles, bruises, and maybe a scraped knee or two along the way. But just as I strongly as I believe in the success of eBay and AOL, I also very strongly believe in the many things I was taught in school, one of them being, "If at first you don't succeed..."

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