The complaints are mind-boggling. Everywhere you turn, people say how much of a bath they took in the market last year. Everybody has another "war story" about how much they lost. Yours included.

However, what most people fail to realize is that the real loss was not in 2003; it was before that.

Actually, 2003 was the best year for investors in the last quarter century. Am I kidding you? Not in the least. The figures speak for themselves. This country hasn't seen such high annual returns since back in 1975 and 1976 when global markets at that time were recovering from the bear market of the previous two years. Although we started out 2003 with all kinds of dire predictions about what would happen, once we reached the second half of the year, all hell broke loose…but in a good way. The market looked like Seabiscuit. What do I mean?

Consider these charming facts: The emerging markets value was up by 70 percent while the microcap and international small value increased by 60 percent.

Want to hear more? Small and emerging markets were up by 50 percent while international large volume rose by 40 percent. Even large value and REITS were up by 30 percent while large growth was up by 25 percent. This certainly doesn’t sound like a downside.

For those who bailed out too soon last year, you were not there when the party had a surprise recovery.

Diversification, as I've constantly pounded home, is still the key. It's like having insurance because you are spreading your money along a wide scope of asset classes so you gain protection against being heavily invested in any one or two areas. As one example that is cited constantly, international equities outperformed U.S. equities in the 1970s and 1980s but then underperformed in the 1990s. However, last year, they started outperforming again…and rather dramatically.

So, where do we go from here? What's 2004 looking like? No one really knows. It's been said time and time again that you can't read the market. No one can predict what it will do or even control it. What you can do is to steer a steady course and diversify as best you can. As my late mother once so prophetically said to me as a little kid while clutching my hand as we gazed into the bakery shop window, "Remember, as you go through life, keep your eye on the donut and not on the hole."

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