Your year in review

With all of the investment news that typically flows at year's end, it is normal for people to pay attention to things like how their investments did for the year.  The better question to ask is, "how did YOU do for the year?"

The difference is not trivial.  You can only control how you behave.  You cannot control how your investments perform.

Did you formulate an investment strategy that made sense in terms of your goals, time frame, and willingness to bear the required level of risk?  The last part asked a different way: were you willing to ignore all of the crazy, stupid, unpredictable and unimaginable events that took place during the year, and caused your accounts either to soar or to plummet in what seems like the blink of an eye?

If you can say yes to all of those things, then 2011 should have been OK to you.  Stocks were flat, bonds had a reasonable total return, and market volatility kicked everyone square in the ass, several times.

Why should we believe that 2012 will be any different?