Beating the market is the real victory

• No new trades.

Strategy Lab is MSN Money's stock-picking challenge. To learn more about the game and the contenders, click here.

It's been a tough market lately, for stocks in general and for my portfolio here in the Strategy Lab as well. After sitting in second place behind The Amateur -- who is by all accounts anything but -- for most of the round, I’ve been seeing more red in my portfolio than I'd like.

I'd certainly rather be sitting near the top of the standings. But when I step back and take an honest look, I'm actually rather pleased with my performance thus far.

It's very easy for investors, including yours truly, to get caught up in the scorekeeping mentality of investing. Keeping score is important, but watching daily, weekly or monthly moves in the market or in one's individual holdings is, at least for me, a distraction that steals my attention away from what truly matters.

Whenever I have a stock that does poorly (I've had a few) or my portfolio isn't currently performing as well as I might hope, it helps me to step back and remind myself why it is I'm investing in the first place, and what my real goals are. Sure, we're all trying to make money -- but the why can be different for each of us.

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For me, it's saving for my retirement -- a goal that is still likely a couple of decades away. Whether or not I'm accomplishing my goal is something that will be measured over decades -- not weeks, months or even a few years.

What really matters

Whether or not any particular stock is a multi-bagger or a crash-and-burner isn't what's going to either see me successfully to my goal or keep me from accomplishing it.

What is going to matter is whether or not I have a sound, disciplined approach that, when measured over long periods of time, allows me, more often than not, to select stocks that are more likely than not to beat the market. After all, if I can't do that (something most professionally managed mutual funds have a hard time doing, especially after management fees) I might as well just invest exclusively in index funds. But if I can, beating the market by just a few percentage points per year, when measured over decades, will make a large difference in the size of my, and my family's, retirement nest egg.

While it's perhaps a bit too easy to read too much into a portfolio exercise lasting six months, my goal in Strategy Lab is twofold -- to introduce a few new people to the CAPS stock rating system, a service I strongly believe in, and to use CAPS to help me pick stocks and build a portfolio that beats the market.

Measured against that goal, despite my recent slide in the Strategy Lab standings, my portfolio has been a success, as it is still ahead of the major market averages. In fact, all but one of the Strategy Lab portfolios is ahead of the market -- which in my mind is no small feat in and of itself.

Yes, the chances of my finishing at the top of the standings this round are, to be blunt, extraordinarily slim. I like to think, however, that my chances of accomplishing what I set out to accomplish are quite good. And with a little due diligence and by continuing to learn from the tens of thousands of my fellow investors on CAPS who share their insights daily, I'm hopeful that my chances of accomplishing my personal goals with my real-life investments are too.