Winter 2008 Departments 1998 Highest returns 51.2% LG 17.9 LV 9.5 MG 5.9 MV –3.7 SV Lowest returns –6.5 SG 1999 52.5 MG 46.8 SG 42.6 LG 0.6 LV –5.2 SV –6.8 MV 2000 24.6 MV 18.7 SV 5.7 LV –11.1 MG –12.1 SG –33.5 LG 2001 18.6 SV 5.1 MV –3.4 LV –12.9 SG –21.6 MG –29.1 LG 2002 –8.2 SV –10.0 MV –15.0 LV –32.5 MG –33.2 LG –36.9 SG 2003 52.6 SG 48.9 SV 40.0 MG 35.9 MV 30.6 LG 26.3 LV 2004 24.3 MV 24.0 SV 15.5 MG 14.0 LV 13.5 SG 0.2 LG 2005 16.3 MG 11.5 MV 7.0 LV 5.8 SG 5.1 SV 3.4 LG 2006 25.8 LV 20.0 SV 18.8 MV 10.0 SG 9.6 MG 5.7 LG 2007 19.7 MG 12.3 LG 11.1 SG –0.4 LV –5.5 MV –8.1 SV 7 9 Letter from the Editor Inbox Gray Matters 22 Learning to Large Large Growth (LG) Fly with Value (LV) Equity Options Master these powerful tools, and the sky’s the limit in terms of portfolio management. Share with Clients 52 Unpredictable Mid Mid Growth (MG) Style Value (MV) By the Numbers 83 Mutual Fund Analyst Picks (SV) Small Growth (SG) Small Value 88 Undervalued Stocks 92 Most Popular Variable Annuities On Topic 10 How Do You Use the Morningstar Style Box? Investments a la Carte 70 Focus on Financials Thirteen picks that should help guard a portfolio against a crumbling market. Ten Questions 12 Real Estate Investing Goes Global 26 Another Block in Building a Portfolio It’s now possible to prove that private equity has a place in a diversified collection of assets. 30 In a League of Their Own Companies that have strength to keep competitors at bay for decades make for good investments. A new index offers an easy way to invest in them. In the Loop 94 New at Morningstar Sector Rap 74 Strongest Homebuilders Will Withstand the Wrecking Ball Phillips Curve 96 The Style Counsel Advisor Profile 15 The Golden Touch Janet Briaud sticks with her investing ideas through thick or thin, and she’s usually right. 18 Investment Briefs Screens 76 Breaking Style Conventions 78 Playing It Safe with Financials Bond Fix 81 Back to Bond School 4