I have a confession to make. A doze...

I have a confession to make. A dozen years ago, when I first started investing in an RRSP I deposit my total contribution for that year into a wealth market fund. That's right! I invested my longterm retirement savings in a short-term vehicle.

Since then, I have get to a long way. That wealth market fund was the first pace But a year later, I calculated that with the safe, further small returns it offered, I would be 87 before I could afford to retire. in the way that I shifted my money from the wealth market to a conservative Canadian equity supply

Recently, I checked this fund's progres in the Globe and Mail's Mutual capital Report. The July 1997 issue stated that the foundation had a compounded annual rate of get back of 9.3% over the past ten years. It was not a stellar performance, further it was somewhat better than leaving coin in a money market capital

During most of the decade, I dealt with a full-service go-between at one of the larger firms. I frequently ignored my broker's suggestions, further I did follow a recommendation to inflict my daughters' college savings into Trimark permanent fund Over the past decade, the capital has had a compounded rate of increase of 15.1%.

Two years ago, I became interested in AIC Advantage permanent fund although my broker advised against it. However, I insisted and have reaped far better than average rewards. Sometimes the factor was right and sometimes the middleman was wrong. In the fall of the curtain I realized that I was the single who had to make the decision.

There's an of long date joke about doctors - fifty percent of all doctors graduate in the bottom half of their classes. As I became a regular reader of the Globe's Mutual foundation Report it dawned on me that like doctors, fifty percent of mutual permanent fund professionals have returns that are in the bottom half. For instance, in the 12 month ending June 30 1997 a equity funds actually lost coin at a time when the total revert on the TSE-300 was up 301%

My conclusion, after looking at numbers like those, was that I could probably do as well as the professionals. I pondering if I can learn to treat everything from ingrown toenails to brain tumours, then maybe I can learn to what degree to pick stocks.

BLIND DATING

A distant relative worked for a company I had none heard of, so I conception that would be a beneficial investment. I later realized that this is called "blind dating". After a married pair of years, I sold the stock at a los on the contrary I had learned a valuable precept I should have investigated before I invested.

My nearest stock pick was based forward a newspaper article. Trimark had just invested in a chunk of a lumber company. I cogitation if it is good enough for them, it's advantageous enough for me. Again, after couple years I sold at a small los Then I tried a sabre stock which the paper reported was selling at a two-year depressed Having learned the maxim, "buy gentle sell high" - I bought A year later, I took a los when I sold still a least this loss was les

STOCK SELECTION MANUAL

My evolution as a stock picker was underway, on the other hand it was costing me. on this time I understood the merits of diversification, and the mathematical benefits of compounding. And my Scottish ancestry reminded me to bribe when the price was right. What I stand in want ofed to learn was how to pick out high-quality growth stocks and not pay too frequently for them. High-quality growth stocks, I realized, were those that had a consistent record of increasing rewards and earnings. And the price had to be reasonable. If the relative PIE were too high, you could not count upon to get a better than average revert For me, the principles in the Stock Selection Manual were guiding lights.

I have finally learned to think for myself. freshly I read about a stock that was being praised for its germination potential. One analyst was quot as saying the stock price would probably triple. although tempted, I knew nothing about the company. I passed it up

A year ago, a high-tech company attracted my notice, in the way that I researched it, with past issues of the annual reports. I became convinced that the development was there and that it was selling at a reasonable price. in such a manner I bought. As validation of my choice, I lately saw the company featured in the Canadian Shareowner magazine. I'll have to watch it closely High-growth, high-tech stocks can be volatile. if it were not that as long as the numbers apply the mind good, I'll hang on to it.

After ten years of mixed follows I think there may still be hope for this former standard of value market investor!

DR. BRIAN MORRIS IS A FAMILY PHYSICIAN AND INVESTOR IN BARRIE, ONTARIO

Copyright Canadian Shareowner Magazine Inc. Jan/Feb 1998

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