BANK ONE Message Board - Msg: 12954191

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Non-Tech : BANK ONE

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To: Big Dog who wrote (344)	2/23/2000 4:56:00 PM
From: Big Dog	Read Replies (1) of 466

When Investors Are Their Own Worst Enemies By Vern Hayden Special to TheStreet.com 2/23/00 3:51 PM ET The most important factor affecting a mutual fund investor's return is not necessarily a portfolio manager's style or even the performance of the market at large. It's the investor's own behavior. Because some investors don't understand risk -- intellectually and emotionally -- they can be their own worst enemies. I've seen evidence of this in the form of skittish investors pulling money out of a mutual fund when it's down. They get scared and run for cover. There are lots of reasons a mutual fund may be down, such as a manager going sour or a fund getting too big. That's not what I am referring to. I'm talking about a mutual fund that goes down simply because the market is down, and the scared investor pulls out. Bill Miller's Legg Mason Value Trust is down about 12% since Jan. 1. Has the guy who surpassed Peter Lynch by beating the market nine years in a row all of a sudden lost it? An investor who pulls out simply because he or she is scared of a 12% drop shouldn't be in the market, or his fund, in the first place. Obviously, an investor who pulls out in a panic wouldn't know when to get back in. A day or two of big moves could make a significant difference. A savvy investor would realize Miller is in a compression for a while. He is hurt by his top holdings, America Online (AOL:NYSE - news - boards), Dell (DELL:Nasdaq - news - boards) and Gateway (GTW:NYSE - news - boards) and from the pure value plays, like Bank One (ONE:NYSE - news - boards) and Waste Management (WMI:NYSE - news - boards). If investors stay on board, they'll probably be fine. ... ... thestreet.com

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