All Now Mysterious...

Wednesday, July 20, 2005

SML7: Don't Panic!

As I was gathering data for this week's edition of the Stock Market Lotto, I was a little concerned by the movement I saw in some of the stocks. Specifically, I was concerned that three of my five stocks had dropped from last time. Observe:

Aetna: -2.94 to 81.38
Barnes & Noble: -0.14 to 40.31
Motorola: +0.96 to 19.50
Safeway: +1.06 to 24.37
Lockheed Martin: -0.75 to 61.75

Disastrous, right? Well, actually, not so much. As it turns out, the gains by Motorola and Safeway were enough to offset the losses by the other three stocks. The total value of my portfolio actually went up just under one percent for the week.

Aetna: +1.63 (+2.04%)
Barnes & Noble: +2.12 (+5.55%)
Motorola: +1.76 (+9.92%)
Safeway: +1.85 (+8.21%)
Lockheed Martin: -3.31 (-5.09%)

Overall Value: $104,095.10 (+4.10%)
S&P 500 Index: 1227.92 (+2.67%)

To me, the moral of this story is not to get too worked up over the numbers until you've analyzed them and know what they mean. Sort of a lesson in big-picture thinking, I suppose. I guess the other moral of the story is something they've been trying to teach us all semester long: Diversification is good.

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