Don't Worry -- Just Adopt a Value Strategy

Is this market causing you stress? Are you tired of worrying? Are you interested in a strategy that doesn't require vigilance about your stocks and concern about market direction?

A couple of weeks ago, I updated my conservative portfolio, originally posted on March 30, for those who were "tired of losing." As of this writing, after much angst in the market by yet another Nasdaq selloff, the conservative portfolio is up 14%. Depending on how you set up your portfolio and how you approach the stock market, you don't have to be encumbered by worry. Consider adopting a long-term value strategy. Here are the keys:

Buy value stocks. Look for companies where there is a wide divergence between the stock price and the underlying business value. Need ideas? Check out the 19 stocks I have highlighted in various columns. All 19 are up and have outperformed the market.

Diversify across at least six or seven sectors. Research indicates that if you spread your buys across at least six unrelated sectors, you get about 85% of the benefits of the diversification of a mutual fund.

Forget performance. To the extent possible, ignore performance. If you buy a piece of real estate worth $80,000 that you know is worth more than $100,000, what difference does it make if you receive an offer of $70,000 the next month? As long as your analysis is correct and as long as you refuse to sell, any offers that are not in line with the true value are meaningless.

Don't play yesterday's game. Don't ignore what happened in the last cycle. In the last bull market for stocks, it was all about a handful of big-caps, growth and technology. This cycle, so far at least, is about small- and mid-caps and value.

Don't trade much. Why would anyone want to pay the penalty for selling -- state and federal tax -- if they didn't have to? Keep your capital invested instead of sending it to the government.

Don't predict the market. The long-term trend is up. Businesses are only going to be in business if they make money. And if a company consistently makes money, over the long term the stock value is going to go up.

Here is a list of stocks that I have recommended and that have been profitable for at least 10 years running.

Winners for the Past Decade
Stock	Date of Column	Symbol	Cost	Current	Gain
TRW	12/28/00	TRW	$ 36.38	$ 42.91	17.95%
JC Penney	12/28/00	JCP	10.25	20.77	102.63
Georgia Gulf	12/28/00	GGC	15.00	18.00	20.00
H.B. Fuller	12/28/00	FULL	40.31	47.67	18.26
Circuit City	12/28/00	CC	10.80	15.03	39.17
Office Depot	12/28/00	ODP	6.94	9.12	31.41
Safeco	1/26/01	SAFC	24.00	28.47	18.63
Centennial Bank	3/30/01	CEBC	7.75	9.04	16.65
Liz Claiborne	4/24/01	LIZ	44.50	51.08	14.79
York International	5/10/01	YRK	30.44	35.63	17.05

I know that this column is not for everyone. There are successful short-term traders out there. There are investors who live for the tension and excitement engendered by market volatility. And there are hobbyists who love to try to determine the direction of the market. This column is for the investor who wants to ratchet down the pressure -- who wants to relax and not worry.

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