By Ann Coleman (TMF AnnC)
February 14, 2000

It's been uggggly lately. The Dow has officially corrected, meaning it's fallen more than 10% from its previous high. Yet today it was the best performing major index. Meanwhile, the Foolish Four is now down almost 10% for the year and we've lost about half of last year's gains in the first two months of "the millennium."

We actually didn't do badly today. Two of our four stocks were up and the other two were down just a smidge. We beat all the indices including the Dow. Not that a single day's performance matters one whit. You are doubtless familiar with The Motley Fool's admonition to always judge your portfolio performance by some kind of an index. The thinking goes, if you could simply put your money into an index fund (for example, Vanguard's Index 500 Trust) and get market returns, why would you invest in anything -- stocks, bonds, or other mutual funds -- that can't beat that return?

Index investing is the no-brainer approach that seems to have escaped the notice of most mutual fund promoters, but our goal here at the Foolish Four is to beat the Dow and the S&P 500, if not every year, then at least over most five-year periods.

One of the points that the Gardners made in the early days -- which may not have been discussed much recently because the market has been so strong -- is that you can beat the market even if you are losing money. Like right now. Both the Dow and the S&P 500 are down for the year. When you invest in stocks, there will be times when your positions are in the red. As one of our readers, Tom Scogin, put it: "This is the stock market. If it were guaranteed, it would be called a savings account."

A great many new investors use the Foolish Four as their introduction to investing in individual stocks. It's simple, it carries little risk of huge losses, and it deals with very stable, well-known companies. But it's still stock investing -- not a savings account. In the short term, stocks can go up and down for reasons that have little or nothing to do with their long-term prospects, like worries about interest rate increases or the world economy or simply being in a sector that isn't popular at the moment.

It's easy to get distracted by all of that. But new investors especially should make a real effort to stay focused on the long term. It's not easy with the huge wealth of investing information and opinion constantly being blasted from every media outlet. (Yes, I know The Motley Fool is part of that, but we're different!) Worrying about short-term returns is a waste of good worrying time.

Worry about world peace, worry about your family, worry about your job, but when it comes to investing, don't worry -- study instead. Know why you are investing in something and set a time for re-evaluating your decisions. Then spend the time before Re-evaluation Day studying some more. If you decide to make a change, you will be ready, and if not, you will know why.

For those who are interested in more challenging mechanical investing strategies, our Foolish Workshop is an exciting place these days, with some very interesting and high-performance strategies being developed and tested. Drop by any time. You're always welcome. If a less mechanical, more traditional approach to picking stocks appeals to you, our new Stock Research area just opened today. It's a subscription service that goes into much more depth than you will normally find online and provides quarterly updates for each stock. Check out the free sample at Fool.com: Stock Research -- Amazon.

Fool on and prosper!