`The Honeymooners,` mutual funds and Yogi Bear

‘The Honeymooners,’
mutual funds and Yogi Bear
“I’m smarter than the average bear!” just one stock. But if you own 20 stocks,
Platitude espoused by cartoon your risk falls 59 percent, or nearly as
character Yogi Bear much as it declines by owning 1,000
Most of us think like Yogi: no one
stocks.
voluntarily declares that he or she is of
So how effective is purchasing
below average intelligence.
those 980 extra companies just to get 2
Yogi’s voice inflections and
percent less volatility? Owning stocks
movements were styled after the
in a few dozen companies, equities that
you or your advisor have researched
character Ed Norton (played by actor
exhaustively and believe in provides you
Art Carney) on “The Honeymooners.”
with almost as much diversification as
Remember when Norton was angry
owning the whole market.
about some civic controversy
Most folks who own mutual
and wrote “S.W.A.K.” on the back
funds know that the funds are
of the envelope containing his
part of their holdings, but know
protest letter? Jackie Gleason,
very little about their positions
playing Ralph Kramden, looks
within the funds or how their
at Norton and says, “S.W.A.K!
investment strategy works
Sealed with a kiss?” And Norton
within the portfolio. Having a
responds, “No…sewer workers
excellent ideas and owning
are kings!”
Margaret R. few
a few powerhouse securities in
Here’s the connection
McDowell each sector can often be more
to investing. Most of us are
advantageous than owning
of average intelligence;
Arbor Outlook hundreds of securities in a
otherwise, there wouldn’t be an
mutual fund. And just about as
average. And it’s difficult to hold
diversified. Few of us awaken
hundreds of great investment ideas in a
each day and say, “This is my 438th best
portfolio. Sometimes fewer can suffice.
idea. Let’s get it into my portfolio.”
The typical U.S. equity mutual fund has
Mutual funds can indeed be
around 100 stocks in it. If you own five
appropriate for investors who are just
such funds, you probably own around 500
getting started and who have fewer
stocks. Even with overlapping holdings,
assets. And there are some fantastic
you probably own well over 250 individual
equity mutual fund managers out there.
companies. Many consider this great
But to achieve maximum benefit the
diversification.
investor has to stay with the funds
The thinking is that these widespread
for 10 or 15 years, ride out periods of
holdings provide balance when some
underperformance and enjoy the power
of your positions decline, since all your
of compounding.
securities do not move up or down in
unison. Well, I may be no smarter than
Margaret R. McDowell, ChFC, AIF, a
the average bear, but there can also be a
syndicated economic columnist, is the founder
downside to holding so many positions in
of Arbor Wealth Management, LLC, (850your portfolio. Studies reveal that if you
608-6121~www.arborwealth.net), a Fee-Only
own 1,000 stocks, your portfolio will be
Registered Investment Advisory Firm located
61 percent less volatile than if you own
near Sandestin.
&
STAT E
Sunday, August 23, 2015 | Daily News | Page B7
TROPICAL PALM from Page B8
menu. Instead, expect
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“People like it simple,”
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When she does make
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usually respond favorably.
“When we first got in
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table smokin’” Kervin said.
“But ... a lot of people didn’t
want that so we stopped
that, and a whole lot more
people came in.
“Our old people used to
cook in bacon grease and we
did, too,” she added. “Then
people got to talking about
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Customers include locals
and out-of-towners.
“We have people who
drive up every Wednesday
from Fort Walton and
Navarre for the spaghetti,”
waitress Kathryn Parker,
Kervin’s niece, said.
Regular customers have
their reasons for returning.
For Mack Blue — a fan
since the restaurant was at
its first location — it’s the
food and fellowship.
“I like everything they’ve
got,” he said. “I usually sit
here an hour or two and
visit.”
“My favorite’s the grilled
pork chop,” Larry Woolley
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“All those people who
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Kervin said she can’t
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“I don’t even want to
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park in the back.”
Ayden Lewis, 5 — who
often eats lunch there with
his grandfather, Donny
Smith — always orders a
hamburger with fries. “We
eat here all the time,” Ayden
said. “It’s real good.”
Buying their building
— which once was a Piggly
Wiggly, later a hardware
store — when the Kervins
did allows for a low
overhead today.
“I would shut that front
door up there if I ever had to
pay rent,” Kervin said.
Commercial leases near
the restaurant can range
from $1,000 to $1,500 or more
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