Tax paperwork: Good for two things

W2s, brokerage tax forms, and bank and mortgage statements are piling in. These are the documents we need to prepare our tax returns, but they serve another purpose as well: Evaluating your own financial performance over the course of 2005.

The year-end beige statement that Fidelity sends out is particularly useful. It breaks down each account by balance, starting and ending amounts, contributions, and a key metric -- gain (or loss) less contributions and withdrawals.

2005 was a good year for me. Our family's Fidelity accounts -- mostly mutual funds, but a few stocks, an ETF, and the kids' 529s -- gained about 15% over the course of the year (not including contributions to our Roths). That's pretty good, but this level of performance came with a risk: Our Roths are heavily invested in foreign-oriented funds ... About 45%, which is quite high according to the recommendations of most profesional money managers. Taking this level of risk can seriously backfire. I learned this the hard way in the late 1990s, when several international financial shocks shook foreign markets.

I am not counting on a similar stellar year for foreign funds in 2006. I haven't done in yet, but will rebalance in the next few weeks, and decrease my foreign exposure.

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