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Here's a quick-and-easy way to check how your mutual-fund portfolio choices are doing. Like any swift solution, it's far from perfect, but it will help you understand what you're sitting on. Don't bother with elaborate spreadsheets or fancy software. Leave aside other complicated yardsticks -- the "Small-Cap Emerging Global Value At A Reasonable Price 1000 Index," or whatever. Just gather from your Sunday paper the year-to-date returns for the funds you own. Don't worry about when you bought them. Just pretend you've owned them all year, add up the returns, and find the average. Next, if you own equity funds exclusively, see whether your fund portfolio's average beat the Wilshire 5000. You can find returns for the index in some newspapers, or on the Web at www.wilshire.com/home/products/monthret.htm. If you've got a mix of stock and bond funds, compare your results to a fair proxy. A good one is the Vanguard Balanced Index Fund (VBINX, up 13.2% through Dec. 15), a 60-40 stock-bond mix based on the broadest equity and fixed-income indexes. Its year-to-date performance is listed in the paper along with those of most other funds. On the Web you'll find it at www.morningstar.net. Now, here's the moment of truth. Ask yourself: "Did all the time (or the little time) I spent picking funds pay off? Did my funds do better than a simple, broad-market index fund?" If so, congratulations. If not, take a humble moment to remind yourself of what you don't know about the future. Carry that thought into 1999. Finally, one warning: Just as standing naked before a full-length
mirror can be a humbling experience, so is reckoning your investment
performance. Sometimes, it's no fun. It's perhaps the roughest part
of running your own money. Yet the alternative -- arrogant ignorance-
- won't do anything to make you a better investor.
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