Damn. Damn, damn, damn.

I had forgotten my Sharebuilder password for the better part of the last year, and with the market in freefall, I was in no hurry to recover it and quantify the damage. But as stocks began to show signs of life, I figured it was worth a peek at the account I had set up for my first daughter not long after she was born.

Shanda Interactive (Nasdaq: SNDA), a purveyor of online games in China, was down 3%. Not bad, considering it once carried the stench of a dud. Nope, that was not the source of my remorse.

Carrying the S&P 500 index-tracking SPDRs (NYSE: SPY) through my daughter's infancy, her toddler years, and now into first grade -- not exactly the best market window -- her shares had actually increased nearly 5% in value. I invested the bulk of her birth money there; the performance wasn't great, but not a cause for despair.

No, it was the other three stocks that I had purchased for her back when she was a chubby two-year-old.

Quality Systems (Nasdaq: QSII), which offers software and services for doctors to upgrade and manage their record keeping, had climbed more than 280%.

Vertex Pharmaceuticals (Nasdaq: VRTX), a biotech that continues to flex its clinical muscle, was up about 230%.

And Intuitive Surgical (Nasdaq: ISRG), like Vertex, a company that I came across on the pages of the Fool's Rule Breakers investment service, took the prize by gaining 437%. The company now is an ask-for-by-name monopoly, changing medicine with its surgical robots.

My "big" winner
So why am I muttering epithets, cursing my stupidity, and glaring at the brokerage statement in my hands?

Because the portfolio is up less than $1,000. Damn.

How was such market-crushing performance able to provide such relatively meager returns? Here's how I screwed up. First, I put the majority of her cash in an ETF that is steady but probably won't be life-changing. It's a conservative approach, but probably too conservative for such a long time horizon. She's still only seven.

But more importantly, I didn't fully invest in my convictions. I knew that doctors' offices would have to go paperless, and Quality Systems was the company best positioned to do it. And as analyst Charly Travers wrote back in 2005, "Vertex Pharmaceuticals has an impeccable scientific foundation. It has a proven record of developing drugs and is at the forefront of improving treatment of hepatitis C. This is a large market in which an innovative product such as VX-950 could do very well." And I had (and have) a lot of faith in Charly. Intuitive Surgical was in the early stages of disrupting a very lucrative field. I was right in all of my investing theses, but I didn't come strong.

The future's still bright
Her investments will continue to grow -- all of those are still companies with decades of outperformance ahead of them -- and I'm not saying I should have gambled my retirement account because the stocks were very compelling. But I now firmly believe that smart investing involves more than mere dabbling. Based on my stock picking, I should have used the money that wasn't working very hard for me to invest in the great companies that were clearly in my sights. By all rights, my daughter's college education should be paid for already.

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