Pettit Funds

Ok, I’m going with a company called Twin Disc, Inc. (TWIN).

They make propellors or somesuch.

Markets are cyclical, so I need a stock like this to be able to make it through the troubled waters that lie ahead. (Those are propellor jokes…)

Keep your fingers crossed for this one.

Happy investing!

What Created The Subprime Mess - Watch more free videos

It is with trembling hands, that I make my first selection of the new year.

It is the nature of the stock market to go up and down. It sure is painful when it’s down, though–especially when I timed my retirement to begin right at its high point. I may be back out on a street corner selling pencils soon.

Anyway, my pick this month is Esterline Technologies Corp. (ESL).

They manufacture stuff for the aeronautics and defense industries–including lighted pushbuttons. My portfolio was low on lighted pushbutton manufacturers before, and now it is not.

Good luck. Keep the faith! The market has to go back up soon.

Doesn’t it?

The cover story for the current issue of CONSUMER REPORTS magazine is “12 Money Mistakes That Can Cost You $1,000,000″.

Number One? “Investing too conservatively during retirement. Cost: $360,000 to $750,000″ (!) (Note: those dollar figures are based on a hypothetical investor retiring at 65 with $500,000 in savings to invest. If you don’t have that much when you retire, your problem was investing too conservatively before retirement!)

This is no surprise to me, of course, having invested 100% in stocks for the last 30 years–as I will for the rest of my life.

From the article (with a surprising conclusion):

Overall, we found that an asset mix leaning toward Standard & Poor’s 500 Stock index than bonds provided bigger returns and annual cash draws. On average, over a variety of 20- and 35-year periods from 1940 through 2006, an all-stock portfolio provided our investor with $750,000 more than an all-bond one. If we had started with less money, $250,000, the advantage of all stocks over all bonds was about $360,000.

What you can do. Weight your asset mix as heavily toward stocks as your comfort level allows. If all-stock gives you the willies, consider for example, an 80/20 or 70/30 stock/bond mix.

Wow! 70/30 at the very least. Conventional “wisdom” has been to subtract your age from 100 to 120 (depending on your “risk tolerance”) and that was the percentage to have in stocks. I always knew that was baloney.

Retirees: it’s not too late. Pick up a book or two. Open a brokerage account. Buy some index funds. But be careful who you get your advice from…

Good luck!

Worst year ever!

And yet…

I was up as much as over 40% (over the previous 12 months) during the course of the year, but have been in a slide during the last half. Matter of fact, I underperformed the market for the last 6 months by about 1%.

Nevertheless, I finished the calendar year up 15.8% versus the Dow finishing up 7.24%, S&P 500 up 6.22 %, and the Nasdaq up a healthy 10.73%.

Later this month, I’ll hit the 5-year mark with my funds at Marketocracy. Consequently here are the (almost) 5-year stats for my Top Ten fund–now in its 33rd month in a row as an m10 fund:

As you can see (sort of) from the last row of the table, I’ve averaged a 29.04 % annual return since starting 5 years ago–beating the market by 15.39 % per year. Even this “lousy” last year I beat the market (as measured by the S&P 500) by 10%.

My Pettit Energy Fund has actually performed even better (being in energy for the last five years ended up being a no-brainer). Here are the stats for that fund (currently ranked #20 out of the 70-80,000 funds monitored at the site):

I hope those of you that follow my stock picks made more money than you lost (I did have some clinkers this year).

Happy Investing in 2008!

(And yes, I realize that these are “fantasy funds”–but they mirror what I have invested in the “real world”.  I got to retire early this year, after all…)