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  1. #1
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    Stock Market Is my portfolio diversified?

    appl/goog---20% RS--8% HRS--5% AXP---5% GLD--8% DTG--8%--- PJP--10%---INT--8%---CMI--8%---LNN 8% cash 8%

    Do I own too many to watch? Too much appl/goog? Your opinions are appreciated.

    I bought the above in October, the percentages are skewed from the original purchases because of stock price changes.

    Last summer was should we say was unprofitable many times timing was critical. Sold out in the dip (bad idea I know) in September and quit trying to trade the market and just buy good stocks and try to hold if no major changes happen in the company. It is just too much work trying to trade the market.


    "To run this drill, Everyone line up in a circle, pair up in rows of three, alphabetically"

  2. #2
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    Re: Stock Market Is my portfolio diversified?

    Quote Originally Posted by mkadl View Post
    appl/goog---20% RS--8% HRS--5% AXP---5% GLD--8% DTG--8%--- PJP--10%---INT--8%---CMI--8%---LNN 8% cash 8%

    Do I own too many to watch? Too much appl/goog? Your opinions are appreciated.

    I bought the above in October, the percentages are skewed from the original purchases because of stock price changes.

    Last summer was should we say was unprofitable many times timing was critical. Sold out in the dip (bad idea I know) in September and quit trying to trade the market and just buy good stocks and try to hold if no major changes happen in the company. It is just too much work trying to trade the market.
    I'm more of a mutual fund guy, and honestly didn't even recognize some of those symbols. But it looked like they were all big US stocks, so in my non-professional opinion you are not even close to diversified.

    I am a big believer in diversification for long term, buy and hold. So my thought would be to get some international exposure, some small-caps, and also some REITs. Of course, volume matters - the more $ you have the more you need to (and easier it is) to get diversified. But the international and especially real estate is critical so you don't get completely clobbered if the US market takes a dump.

    Just as a rough suggestion from where you are now, maybe 40% big US, 20% small US, 30% Intl, and 10% REIT. I do this with mutual funds, because I don't trust myself with individual stocks really - don't have the time or inclination to do that type of analysis. Would be harder to do with individual stocks because it gets to be a lot to keep track of. But if that is what you want to do, then that's a different kind of investing than what I do.

    I would say bonds too, but as high as they are right now, and with the way the Fed is dumping $$ into the system, I think inflation and rates will go up and it will be better to buy bonds in a few years. So I am not adding to my bond position right now, which is about as close to timing the market as I get.



  3. #3
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    Re: Stock Market Is my portfolio diversified?

    You probably do have too much AAPL/GOOG and not quite diversified enough with other asset classes besides stocks, IMO.

    You could benefit from TLT (treasury bond ETF) in case the economy stalls and we run into a threat of deflation.

    I like that you have some gold, because inflation is an always present danger with the amount of debt that we have and GLD is a great hedge for that.

    I personally subscribe to a portfolio theory called the "Permanent Portfolio". Penned by a gentleman named Harry Browne (deceased). Google him and the Permanent Portfolio if you would like more info (his book "Fail Safe Investing" is a very short and great read). You probably don't even need the book, however because there is a ton of free info on this simple portfolio. Although I would recommend buying a used version for $5 on amazon so that you see how and why this portfolio works so well.

    This portfolio has averaged 9.5% with extremely low volatility over the last 40 years (since we scrapped the gold standard making it viable).

    In bull markets it will underperform the S&P, which is why many people can't stick to it or think it's too conservative, but it bypasses market corrections and huge draw downs. It's as close to an automatic 9.5% CAGR as I've found in asset allocation portfolios.


    Last edited by acgclone; 04-21-2012 at 10:31 AM.

  4. #4
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    Re: Stock Market Is my portfolio diversified?

    A Morningstar study showed that the average stock investor trailed the major market average’s performance by 24% from 2001-2011. Furthermore, a similiar Dalbar study over a 20 period ending in 2010 showed the S&P 500 averaged a 9.1% return while the average US stock investor achieved only a 3.8% return.
    The S&P 500 beat 75% of actively managed mutual funds from 2002-2007
    Only 12% of all mutual funds have outperformed the S&P 500 Index since 1970.



  5. #5
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    Re: Stock Market Is my portfolio diversified?

    Your portfolio is not diversified. It's all US, mostly large cap. Based on your response, it sounds like you don't want to put a ton of time into this so I would recommend going into some index funds.

    Here's my advice: Pick out 5-9 asset classes (US large cap, mid-cap, small cap, international, REIT, gold or precious metals), find index funds for those asset classes with low management costs (since they're index funds, they should not be high), then leave it. Evaluate and rebalance annually.



  6. #6
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    Re: Stock Market Is my portfolio diversified?

    I got a subscription to Money magazine with some airline miles and have seen this tool recommended quite a bit for determining how diversified your portfolio actually is: Instant X-Ray Stock Fund Investment Portfolio Holdings Free Analysis Research Tool - Morningstar (Disclaimer: I've never actually used it personally)

    I would tend to agree that you would be better off to get a good base built up in index funds (or index ETFs, if you prefer) before venturing into individual stocks.



  7. #7
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    Re: Stock Market Is my portfolio diversified?

    I use individual stocks as a hobby. I probably only have around $5000 in my Scottrade account.

    I use index funds in my 401k and roth IRA to plan for retirement and some less aggressive mutual funds for a more "stable" short term investment.



  8. #8
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    Re: Stock Market Is my portfolio diversified?

    No. You're overweighted in google and apple and have ignored industry sectors such as pharma and consumer staples


    Quote Originally Posted by mkadl View Post
    appl/goog---20% RS--8% HRS--5% AXP---5% GLD--8% DTG--8%--- PJP--10%---INT--8%---CMI--8%---LNN 8% cash 8%

    Do I own too many to watch? Too much appl/goog? Your opinions are appreciated.

    I bought the above in October, the percentages are skewed from the original purchases because of stock price changes.

    Last summer was should we say was unprofitable many times timing was critical. Sold out in the dip (bad idea I know) in September and quit trying to trade the market and just buy good stocks and try to hold if no major changes happen in the company. It is just too much work trying to trade the market.


    I was a victim of a series of accidents, as are we all.

  9. #9
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    Re: Stock Market Is my portfolio diversified?

    Quote Originally Posted by CascadeClone View Post
    I'm more of a mutual fund guy, and honestly didn't even recognize some of those symbols. But it looked like they were all big US stocks, so in my non-professional opinion you are not even close to diversified.

    I am a big believer in diversification for long term, buy and hold. So my thought would be to get some international exposure, some small-caps, and also some REITs. Of course, volume matters - the more $ you have the more you need to (and easier it is) to get diversified. But the international and especially real estate is critical so you don't get completely clobbered if the US market takes a dump.

    Just as a rough suggestion from where you are now, maybe 40% big US, 20% small US, 30% Intl, and 10% REIT. I do this with mutual funds, because I don't trust myself with individual stocks really - don't have the time or inclination to do that type of analysis. Would be harder to do with individual stocks because it gets to be a lot to keep track of. But if that is what you want to do, then that's a different kind of investing than what I do.

    I would say bonds too, but as high as they are right now, and with the way the Fed is dumping $$ into the system, I think inflation and rates will go up and it will be better to buy bonds in a few years. So I am not adding to my bond position right now, which is about as close to timing the market as I get.
    All of these recs based upon what? What is his timeline? Funds. All are equal? Costs, loads? Liquidity needs? Taxation? Is this Ira money? What about hedge funds? Venture capital? Munis? Is income needed?


    Last edited by jmb; 04-22-2012 at 03:37 PM.
    As far as depth goes though, the combination of White, Woodbury, Olaseni, Basabe, and Uthoff is much better than Niang, Ejim, Edozie, Gibson. Not because of the top 2, but because of the next 2 or 3. -DeanVogs

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    Re: Stock Market Is my portfolio diversified?

    Quote Originally Posted by jmb View Post
    All if these recs based upon what? What is his timeline? Funds. All are equal? Costs, loads? Liquidity needs? Taxation? Is this Ira money? What about hedge funds? Venture capital? Munis? Is income needed?
    Incomplete. Sentences and. Lots of. Questions?



  11. #11
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    Re: Stock Market Is my portfolio diversified?

    Quote Originally Posted by Dopey View Post
    Incomplete. Sentences and. Lots of. Questions?
    iPhone.

    Answer the questions if you can't work through the incompete sentences.


    As far as depth goes though, the combination of White, Woodbury, Olaseni, Basabe, and Uthoff is much better than Niang, Ejim, Edozie, Gibson. Not because of the top 2, but because of the next 2 or 3. -DeanVogs

  12. #12
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    Re: Stock Market Is my portfolio diversified?

    Thanks all. Apple has slipped and is close to reaching my stops that I put in place when a price was reached guaranteeing an nice profit. (if it keeps slipping) That is always a great feeling doing that. That is why I seem overweighted in tech because Goog seems to be a great safe long term investment. I do own pharma with PJP. I don't like consumer stuff now because the economy isn't there yet, too many bad things can still happen in this "recovery". I did the mutual fund stuff for 10-15 years. It suckered me into high returns and the 1990-2000 years and then just staying with those funds that paid 10-15 a year and watching them almost flat line for 3-4 years sucked. That was my fault for just trusting fund managers that had brokers begging people to just hold on and stay the course. Yes they are all U.S. stocks, I guess my l am just lazy and watching world stocks would take it to a new level.
    Thanks again, my mission was accomplished and received a great bunch of thought points.


    "To run this drill, Everyone line up in a circle, pair up in rows of three, alphabetically"

  13. #13
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    Re: Stock Market Is my portfolio diversified?

    I'm about 50% in the stock market via mostly mutual funds but some individual stocks, and 50% real estate, physical metal and cash.



  14. #14
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    Re: Stock Market Is my portfolio diversified?

    Blue Horseshoe loves Anacott Steel


    CCG

  15. #15
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    Re: Stock Market Is my portfolio diversified?

    A "diversified" portfolio really needs about 20 individual stocks. It should also cross a variety of caps as well as industries and countries.


    Hit it hard, every yard

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