Thank you Samantha! Have a great 2013!

Some of you have read my guest post on this blog about my past four years' experience with investing. If you have not, you can read it here.

The experience had spurred me on to ask how my family and friends have fared since the recession of 2008 and the stock market bottom of 2009.

Some of the shocking answers were:

- I pulled out all my retirement savings accounts because somebody told me to do it.
- I don't know, I haven't had any calls from my broker in years.
- My advisor had us go into company XXX and all I know is more than half my money on it is gone.

While I reeled at responses of how their advisors failed them, I am excited at the opportunity to reach a niche area of people with a LOT of money but with VERY LITTLE investment knowledge. Warren Buffett said that he wants three things from every manager that he hires:

1. Integrity
2. Intelligence
3. Hard Work

Without the first, and somebody with #2 and #3 will end you.

I want to let integrity, honesty, transparency, be my guides as I venture into the world of investment counsel and financial advisory services. I want it to be at a personal level. I want to know my client, their family, their hopes and fears. I want to see them reach wealth goals that align with their life purposes and how that purpose should be about more than just themselves.

This first post marks my intention.

My wife's has a cousin whose husband is a lawyer. We are Canadian. Two years ago I attended a family meal and our discussion went like this.

him: "I think the US is in financial turmoil and we will soon see hyperinflation, stagnation of the economy, and continued depression in housing prices"

me: "I think the opposite. I believe America will turn the tide. I believe real estate values will go up, that jobs will increase, and that equities of the best companies will reach new highs in the next few years". This was at a time of strong pessimism, the financial crisis was in recent memory, quantitative easing was still a fresh topic, the fiscal cliff was yet to come.

I explained to him the reasons why I was confident America was going to see its best years ahead of it.

He made investment choices based on his convictions, mainly bonds. I made investment decisions to buy JNJ, MCD, PG, and a host of other leading American companies.

I think the evidence and the stock prices have reflected my optimism. I think further gains are to be had for the best in class companies that continue to develop the best products at the greatest efficiencies.

Over the past 2 year period, PG underperformed the S&P 500 by about 6%, PG outperformed by 6% and MCD pretty much performed at the same level as the S&P 500. If you'd invested the same amount in all 3 stocks 2 years ago, you'd pretty much be in the same place if you put all of that money into the S&P 500. If you put your money into a Total Stock Market fund including mid- and small-caps, you'd have made more money. Why do you do stock picking?

Because the index funds, while having low fees, are still higher than those of owning stocks, the fees of which are zero after you buy and before you sell (and with a discount broker even those are ridiculously low). And because the dividend yield on all three of those stocks is higher. And because, while it is true that in the poster's holding period, those stocks have tracked the S&P 500, if you look at longer periods, those three have trounced the index, and since they are household names with no signs of giving up their competitive advantage, look to do so for a long time.

Of course, I'm speculating; I'm not the poster, I'm just a dedicated stock picker. Yes, most investors not disciplined enough for picking individual stocks, but if you have the temperament, and the long term view, you can do just fine.

So for the 10-year period ending last month (1May2003 - 30Apr2013), only MCD outperformed the S&P500. PG performed about the same and JNJ underperformed. What's your point? This is not cherry-picking of time periods. It's just a 10-year look with the end at the completion of last month.

Incorrect. All three beat, handily, because of yield. Assuming re-invested dividends, the total returns were:

S&P 500: 5.56
JNJ: 7.83
PG: 8.78
MCD: 22.13

(source: http://www.buyupside.com/stockreturncal ... cinput.php)

Even without considering dividends, those three together trounced based on the performance of one. Keep score of your portfolio using total return, not number of outperformers/laggards.

Care to pick another period? My point is that those three are wise investments. Most people don't have the temperament for individual stock picking, but careful investors can, over the long term, beat the markets. Warren Buffet, Peter Lynch, and most of the mutual fund managers at reputable brokers (like T. Rowe Price) do it consistently.

You're new here, aren't you? Peter Lynch basically quit while he was ahead. And Warren steps in and guides companies if he has to. And name me a few other managers at T Rowe who have consistently beat the market after expenses when adjusted for risk.

Besides, why are you answering for Ricklee? I'm asking about his rationale, not yours. After all, the OP is inordinately proud of his performance during this particular 2-year period. Start your own thread and we'll discuss your methods there. It's bad form to hijack threads.