Tuesday, November 19, 1996
A Foolish Four Testimonial
by John Carter ([email protected])

I have reached the apex of a mediocre career and it's now time to move on with the next phase of my existence. Current corporate America's mind set has just about "right sized" itself to death, at least from where I sit, so "distance thyself" seems to be a good approach. Anyway, so now it's time to take my mini 401k fortune in a lump-sum pay- and move on. What next?

As soon as the word got out that I was sniffing around, I quickly got to know what road-kill must feel like. These "Wise" guys came out of the woodwork, pushing their slick colored pamphlets with enough graphs and charts to confound even the most Foolish among us! I soon noticed a common thread through the lot in the form of "up-front loads", "rear-end loads", 12b-1 fees and Lord only knows what other kind of fee designed to part me from some (or all!) of my hard-earned spoils. Hmmmm, what gives here? Not for me ... there must be a better way!

Enter the Motley Fools! I was checking out CNBC one day for the next morsel of investment savvy when I see these two guys with black baseball caps (and other appropriate attire of course) being interviewed by one of the vixens of the CNBC staff. I think their ball caps had FOOL in white letters written on them. What the heck is this? A quick bout with a search engine resulted in the Motley Fool home page and voila! I was looking my financial salvation in the face!

Again, I'd heard and seen what the "Wise" were prepared to do for me, but here's why I've decided that, at first anyway, I'm going to use the Foolish 4 as my initial investment strategy: 1. The "Wise" keep preaching diversity, diversity, di- nauseam, which is designed to require you to buy into many different investment options so as to increase their commissions. OK, the Foolish 4 suggests you buy DOW stocks which are just about the most diverse option out there. After all, for example, one of the DOW stocks is International Paper (the key word here is International). Could that perhaps give you a piece of the foreign flavor the "Wise" suggest? Of course, most of the DOW jewels have some foreign ties also, so I think it's a fit! As for diversity, where else would you find a more diverse lot? All of the major industries are represented here from retail, oil, consumer products, and on and on. You want diversity, BINGO, you got diversity!

2. Another "Wise" buzzword is "risk tolerance" or "sleep factor." These little phrases are designed to make you feel you've got to have the Wise "out front," warding off the wolves and protecting you from sure failure! Well, I don't know about you, but I will sleep quite well, thank you, knowing I'm invested in solid DOW companies that aren't going out of business any time soon. You want low risk and your sleep to boot? BINGO again, you get it in the DOW!

3. I must give the "Wise" credit here. They do say to buy good stocks and hold them. And that's exactly what the Foolish 4 does, but it not only tells you WHAT to buy, it tells you WHEN to dump them to boot! Is life good or what?!

4. One final jewel in my "crown" is generating some income from this little nest egg. The "Wise" suggest that you invest enough in a Bond Fund that's generating 7% to derive your monthly or quarterly stipend. I'd have to tie up over half of my mini fortune to do this! No way. Doesn't it make more sense to use an investment vehicle that gives you more return, say 20%, and take 7% for the income I need, leaving 13% for growth? It doesn't take a rocket scientist to figure this one out. After 10 years, the Bond Fund hands me back my principal (which isn't worth what it was when I gave it to them!). But after 10 years with the Foolish 4, I have my principal plus 13% compounded growth! Makes sense to me!

There you have it. That's exactly why I have chosen the Foolish 4 as my investment vehicle. In the future, once I've got some of the Foolish 4 under my belt, I'll probably dabble a bit with the Investing for Growth option. But, for now anyway, I'm comfortable with this decision to start with the Foolish 4. I would recommend it to anyone.

John Carter,
Foolish 4 Advocate

Transmitted: 11/19/96