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View Portfolio For Member: stockvector
stockvector's Portfolios
Last logged in by stockvector : March 28, 2012 04:58 PM
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stockvector's bio
My philosophy is to build a strong base first making up 20-40% of your portfolio, then build around. For some, they chose mutual funds or a few ETFs... Not me. There are 2 reasons to diversify, one to spread yourself out so that you have a great chance in owning a stock in the sector that is the "next best thing" (or the stock itself is), and to hedge your risk so that you aren't in 1 sector that falls (dotcom boom).
But both of these can be accomplishd without owning many stocks. To me, if you own a mutual fund, for the most part you're screwed either way if the market is in a recession. The overall risk to me seems less if you own some high yielding dividend growth stocks with solid safty and decent upside as the "base" of your portfolio. Now some might tell you that you'll be more likely to miss out on the "hot sector" and you'll limit your upside. My theory is since you've built up your base, and you have consistant dividend yield, you not only have the dividend as an income producing asset on it's own, but you also have a couple solid stocks in different sectors that may increase in value. This gives you the room to do whatever you want with your remaining 60-80%. If you want to hedge your risk more, you can be creative and find stocks that have an inverse relationship with your dividend paying stocks without owning many stocks, you can buy more high paying dividend stocks with upside in different sectors; or you can seek out stocks that could be classified in multiple secotrs (FCX; gold AND copper, RIO), or just get value stocks like Altria that will resist declines.
With the 60-80% I look for the best expected value regardless of risk. You create your own risk by setting stops.
I tend to like being aggressive and grabbing risky stocks that have shown good accumulation and are on their way up and cutting my losses fairly quickly so that I not only limit risk, but can get back into a winning stock.
Latest Forums Posted by stockvector
July 12, 2007
trying to find dan zanger stocks
June 11, 2007
June 09, 2007
June 08, 2007
May 28, 2007
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