For the past couple weeks, we've managed to do enough research about politics and their presence in the media to keep the TV turned off. There's a message in that action, because - as long term buy and holders - we don't always have to stay tuned to every little nuance projected at us. However, we do need to reassure ourselves and check on our holdings to see how they fare when times seem tough. This week, let's bolster our confidence as we compare charts from the past decade.

The charts at BUYandHOLD are easy to use, and we'll begin with those because they give us up to a three-year snapshot of a wide variety of companies. If you know what the ticker symbol is for your company, just type it in and go on the home page. If you want to look at a company but you don't know the ticker symbol, use the "symbol lookup" link below the index chart in the upper right section of the home page. If you want to look at a list of BUYandHOLD's stocks, just click on "Full List of Available Stocks." When the page comes up, go to Edit > Find (On this page) at the top of your browser window, and a box will pop up for you to type in a company. Or, you can print the sheet out to go through the list by hand.

When you and your children find a company (or three) you want to follow, just type in the ticker symbol on BUYandHOLD's homepage box, and it will take you to a company snapshot and a chart. Notice the timeframes under the chart. Begin with one day (1d) and move right through the various timeframes. Notice how the charts appear jagged or smooth, and how they move up and down as you pass through each time. Chose the three-year timeframe for your stock and either print it out, or open another window in your browser and go to BigCharts.com. This is one of the few online sites where you can look at a ten-year comparison of your company.

When you arrive at BigCharts.com, type in the ticker of your company and your chart will show. In the top section of the page, there's a pull-down menu for various timeframes. Choose the "1 decade" model and then compare your BUYandHOLD three-year chart to the ten-year chart. Can you see how a short time-frame on some charts might be misleading to the overall health of the company you chose?

Cora and I chose a few companies to compare this way, and we paid particular attention to the last part of 2000 and first part of 2001, when the last presidential election took place and when George Bush, Jr. began his term in office. In 2001, also, we had the crisis on 9-11. Take this into account when you study your charts. What Cora and I noticed on all our company choices was that the stocks headed south at the end of 2000, but 100% of our choices headed north again within the past year (some are moving slower than others).

Another thing we noticed on the ten-year charts that we didn't see on the three-year charts was that the dive-and-climb within the past four years was fairly unremarkable when compared with the first year of the decade; additionally, most of the stocks were higher than they were a decade ago. Of course there were problems, and to hold onto stocks through the first few years of this decade took some guts. Some companies no longer exist, and others have been put through the wringer because of misappropriation of funds or because CEOs and others were accused of illegal trading. However, in spite of these losses, many companies keep on plugging. This comparison shopping sure helped our confidence in the market.

How do we know which stocks to choose, and how can we tell if something might go wrong? After watching some of the company fiascos over the past few years, we all know that problems can come out of the blue with no warning. All the indicators may show a healthy financial setup, but we know now that these figures may be misleading. To overcome this mistrust, we need to be careful about our initial choices. Once you find a few companies that look promising, then go to the company website and look for an offering of a prospectus. Go to the library and find information about the company and its history. Learn everything you can about this company, because you may be with them for a long time (as in through thick and thin).

Cora and I both learned that charts don't lie; however, they are simply indicators that reflect events that happen both inside and outside company business. If we didn't have presidential elections, or if we didn't have terrorist threats hanging over us, would the charts change? They probably would alter, because investors make decisions based on confidence and need. If we feel reassured about our country's future, we spend money. If our confidence in our country is shaken, the markets reflect the sales. However, if we understand that markets have continuously risen over the past century (and over the past decade) in spite of all the trials and misfortunes we've encountered, then the simple message is to just hold onto that great company until the political or social scene mellows out a bit.

Now Cora feels more confident about the upcoming election, in spite of her initial fears. Phew! Now she wants to know if recreation companies will suffer since we're staying home for summer vacation. I reassured my daughter that the two of us don't drop enough money when we're on vacation to make a dent in a company's chart. "What if a million people don't go on vacation, then?"

Oh dear.

Until Next Week,
Linda Goin

The securities markets are subject to the risks of fluctuating prices and the uncertainty of rates of return and yields inherent in investing and past performance is no guarantee of future results.