Long-term results

I go to the mound in the 1st inning planning to pitch a perfect game. If they get a hit, then I am throwing a one-hitter. If they get a walk, it's my last walk. I deal with perfection to the point that it's logical to conceive it. History is history, the future is perfect. — Orel Hershiser

Having become throughly depressed by my IRA's 2007 results, I thought it would be a good idea to look at the long-term results again:

Date      S&P 500   Delta     IRA   Delta   BRK A
06/23/02     
12/31/02  -11.37%  42.32%  30.95%  30.18%   0.76%
12/31/03   26.38%  -1.49%  24.89%   9.08%  15.81%
12/31/04    8.99%  -2.16%   6.84%   2.49%   4.34%
12/31/05    3.00%   3.23%   6.23%   5.42%   0.81%
12/31/06   13.62%  14.88%  28.50%   4.39%  24.11%
12/31/07    3.53% -16.83% -13.30% -42.04%  28.74%
01/11/08   -4.59%  -0.66%  -5.24%   1.47%  -6.71%
Total Gain 41.13%  54.81%  95.94%  12.98%  82.96%
Annualized  6.40%   6.47%  12.87%   1.38%  11.49%

While 2007 was a very rough year and 2008 is not looking much better so far, my 5 1/2 year performance is still 6%+ better than the S&P 500 and 1%+ better than if I'd just bought Berkshire Hathaway shares. Big years early on have saved my IRA from under-performance. The current bear market will be a test on my portfolio and my willingness to deal with loss.

To tie in the Oral Hershiser quote: mistakes (and successes) in the past are no longer important to what must be done in the future. Rather than beat myself up over past mistakes, I need to focus on what I can do to maximize my future success. If that means selling some investments at a loss to buy another investment with better potential returns, so be it. As it happens, I still believe in my current investments, so I don't plan on doing anything drastic. Over the long run, I hope my decisions to be shown correct.