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I'm due to underperform. Each year since 2001, there has been some asset class (or a handful) which have shot the lights out relative to the "market" (roughly the S&P 500). As the latter index has underperformed in recent years, my returns have been good in comparison:

* 2001: -1.9% (S&P down around 12%) -- small cap value up 24.6%, REIT up 10.8%, bonds up 8.6%, gold mining up 12.0%.

* 2002: -5.4% (S&P cratered down about 22%) -- bonds up 6%, gold mining up 78.7%, REITs and emerging markets virtually unchanged, small cap value down "only" 11.8%.

* 2003: +27.2% (S&P up about 26%) -- small cap value up 37.7%, REIT up 37.5%, small cap growth up 43%, gold mining up 49.2%, developed international up 24.8%, emerging markets up 45.8%.

* 2004: + 15.6% (S&P up about 10%) -- small caps up 21%, REIT up 33.1%, emerging markets up 31%, international developed up 21.5%.

So far, there's always been something to lift me above the "market" in the last four years. The S&P is due to be a star performer relative to the other equities as it has lagged recently. When it outperforms, my "streak" (modest compared to Bill Miller's) will end. But so far, I'm pleased with the results and the significant decrease in volatility.

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