Year End Ramble

Not a great day for my MFI portfolio. I'll post official numbers in a bit, but I think I ended 2006 ever so slightly behind the benchmark Russell 3000. I thought I'd get on my soapbox and say a few words today, as we head into 2007.

• I think the best think about MFI is that it is a disciplined approach to investing. Morningstar just began posting "dollar weighted returns" along with their more typical 3 and 5 year returns (Morningstar - MarketWatch). The DWR reflects how people invest, rather than hold for 3 or 5 years, people are always chasing the hot mutual fund or sector and thus tend to under-perform the averages. Before MFI, I think that was my biggest fault as an investor - I got emotional. I would sell a stock based upon an article or some bad news. In the bubble I did my share of chasing hot sectors. Now I have a plan. Thank you MFI.
• I think an important element for anyone considering MFI in 2007 is to have realistic expectations. When you read TLBBTBTSM you can start seeing dollar signs around your eyes as he talks about 2% and even 30% backtested returns. That is well and good, but even if we can beat market indices by 3 points anually, we are doing better than 95% of investors out there... and may I mention getting rich slowly!
  
• I think George Banks, from Mary Poppns, is probably like many of us. We need to learn his lessons and slow our lives down - spend time with our children, go fly a kite and feed the birds while helping those less fortunate.
• I think we should strive to be an optomist, per James Stewart's Common Sense column (Common Sense). It helps you get through tough stretches of the market.

I see where the NYSE will be closed an unusual 4 straight days. Not sure why they're closed on Tuesday... I'll have to go to work! I guess they've had a good year.

Having healthy debates on the Yahoo board. Just like everywhere in life, you have traditionalists and those who want to spread their wings. I suppose I try to follow the spirit of JG's MFI approach, though I have broken a few rules along the way. I figure its my money, so I get to call the dance.

My first hypothetical portfolio will be "fini" in a week. I will post the results then, with every stock included. It does have a slight lead on the Russell Value index and a bigger lead on Russell 3000 (about 3%).

Below I show my weekly graph. Remember, the Magenta line represents my gains while the blue line is the Russell 3000. Not sure if I'll "blog" tomorrow. If not, I wish all a happy and healthy New Year!