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Have a blast. Party on. Pat yourselves on the back, by all means. Tell your friends. But whatever you do, don't get used to it.

Whether you invest tiny amounts in mutual funds, save via provident funds or life insurance policies, whether you're the cautious type with money in a mutual fund or a wild speculator in stocks and derivatives, we allow ourselves to surmise that you had a terrific year on the market.

The TA-25 index rose 26 percent, CPI-linked bonds soared 8 percent, the dollar appreciated by 10 percent, and even shekel bonds gained 5.5 percent. You don't need to be a rocket scientist to figure that most investment portfolios did stunningly well.

The result is seen in the public's portfolio of financial assets, which reached a record NIS 1.8 trillion in November. Since the start of the year, the portfolio has grown by NIS 200 billion, and it has almost doubled in four years.

Peretz power? Sharon spunk?

How did it happen? Does the stock market foresee astonishing levels of economic growth in Israel's future? Is it wildly optimistic about the next government to be, whether headed by Amir Peretz, Ariel Sharon or Benjamin Netanyahu?

No, the story is something far simpler.

Beyond Israel's macroeconomic upswing, beyond the strong performance by exporters, and beyond the intense streamlining throughout corporate Israel during the lean years, three factors drove profits skyward in the last year.

l Influx of foreign money to the Tel Aviv Stock Exchange: Before we congratulate ourselves about the stunning success of the reforms, we should look around. In fact, we are part of a global trend sending capital to emerging markets. Israel is categorized as an emerging market, perhaps unfairly, because it's more like a developed one. But in recent years that classification has helped the country.

The dominance of foreign money is evident in the extraordinary returns on the biggest blue chips that they love: Bank Hapoalim, Bank Leumi and Israel Chemicals, which surged by 40 percent to 70 percent.

l Bank of Israel Governor Stanley Fischer raised interest rates by 0.5 percent Monday, to 4.5 percent. Within four months, he's raised local interest by 1 percent. Usually, rate hikes like that would depress share prices, because the returns on risk-free assets (i.e. Bank of Israel interest) is rising. Yet the opposite has happened. Why?

The price of money is rising, true, but the answer to the mystery lies in the drought in the government bond market. Fiscal restraint over years, U.S. loan guarantees, and higher-than-expected tax revenues reduced the government's need to borrow money from investors through bond offerings. The treasury has all but disappeared from the bond market, which has lowered long-term interest rates.

The mirror image of that drop is impressive gains experienced by linked and shekel bonds, which is a good platform for share prices to rise.

l Wall Street has gone nowhere special in the last year, but actually, the foreign component in Israeli portfolios has done well, thanks to the dollar's climb in the world and its appreciation against the shekel. So this year there was a rare combination of gains in shekel and dollar components at the same time.

The good news from analyzing these three drivers is that it's not a financial bubble. Most of these engines rely on basic economic processes.

But returns of 7 to 15 percent in conservative portfolios, and 20 to 40 percent in stock-oriented ones is extraordinary, and the probability that it will persist over time is nil.

The problem is that a lot of investors who joined the game in recent years don't understand that. Some mistakenly attribute the gains to some new economic era or to the talents of a broker.

Talented investment managers can outperform mediocre ones, by say 2 to 3 percent in annual returns. Compound that 2 to 3 percent over years, and you get a tremendous difference. But make no mistake, it won't be 5 or 7 percent, and certainly not more. In most cases, higher returns means higher risks were taken. A ride was taken on a lucky nag.

By all means, enjoy the moment. But don't get used to returns like these. Certainly, don't build your spending model on them.

Look at 2005 as though it were three good years condensed into one. Remember that bad years can wreak havoc on a portfolio, causing damage that will take years to fix.