The Daily Dow
Monday, November 17, 1997
by Robert Sheard

LEXINGTON, KY. (Nov. 17, 1997) -- I received an unusual e-mail this weekend that I thought I would share with you, simply to reinforce a point I try to make here regularly, but one that doesn't really seem to hit home until one has gone through some market turmoil. That is, of course, the absolute need to be patient.

The e-mail I received (and I won't reveal any identities here) was from a professional investor, which is what struck me about it. He was bemoaning his recent misfortunes in the market volatility since mid-October. Among other things, he had bought and sold the same stock four or five times in the last few weeks, trying to time some wild gyrations. And as you can guess, each time he sold it, he ended up buying it back at a higher price, essentially reversing the market mantra, Buy Low - Sell High.

He realized his error, of course, when he looked at the longer-term performance of the stock and discovered he'd still be sitting on a profit had he simply stopped fiddling with the stock after his initial purchase. As it is now, he's lost all of his gains from earlier in the year.

This is the danger so many of us fall prey to. Despite our best intentions, when Mr. Market starts to go against us, we grow afraid that what we're doing isn't going to keep working. We lose the long-term focus we claim we have and start to meddle with a long-term strategy as if it were designed to be day-traded. And typically, when the crisis passes, we'd have been better off not tinkering with the strategy "just this one time."

If you're going to use a strategy like the Dow Dividend Approach, you must trust it and not undermine it when you get nervous. It requires patience, discipline, maybe even Dramamine. But whatever you need to get you to have faith in the approach, do it rather than let your emotions work over your portfolio decisions. Fool on!

TODAY'S NUMBERS
Stock  Change   Last
--------------------
T    +   7/16  48.63
GM   +1  3/8   62.56
CHV  -   1/4   83.69
MMM  +   5/16  95.06

           
                  Day   Month    Year
        FOOL-4   +0.76%   0.32%  19.92%
        DJIA     +1.66%   3.44%  19.38%
        S&P 500  +1.92%   3.45%  27.74%
        NASDAQ   +1.92%   1.29%  25.02%

    Rec'd   #  Security     In At       Now    Change

   1/2/97  153 Chevron       65.00     83.69    28.75%
   1/2/97  479 AT&T          41.75     48.63    16.47%
   1/2/97  120 3M            83.00     95.06    14.53%
   1/2/97  179 Gen. Motor    55.75     62.56    12.22%


    Rec'd   #  Security     In At     Value    Change

   1/2/97  479 AT&T       19998.25  23291.38  $3293.13
   1/2/97  153 Chevron     9945.00  12804.19  $2859.19
   1/2/97  120 3M          9960.00  11407.50  $1447.50
   1/2/97  179 Gen. Motor  9979.25  11198.69  $1219.44


                             CASH   $1257.01
                            TOTAL  $59958.76