Ouch, painful week for my portfolio

[JS80]

Originally posted by: Argo

Originally posted by: Yossarian

Originally posted by: Argo
1 part AMTD
1 part NE
1 part ETFC
1 part GRP
1 part NFLX
1 part BLUD
2 parts foreign mutual fund (far east)

6 individual stocks and a mutual fund is far from diversified.

I think 6 stocks is about as many as a part-time investor can maintain. Any more and you probably aren't doing as much research and just picking random stocks.

6 is enough to achieve efficient frontier but amtd/etfc count as 1 and you have a bunch of small cap stocks that kill it.

 

[Special K]

Originally posted by: Argo

Originally posted by: Yossarian

Originally posted by: Argo
1 part AMTD
1 part NE
1 part ETFC
1 part GRP
1 part NFLX
1 part BLUD
2 parts foreign mutual fund (far east)

6 individual stocks and a mutual fund is far from diversified.

I think 6 stocks is about as many as a part-time investor can maintain. Any more and you probably aren't doing as much research and just picking random stocks. A lot of experienced investors recommend not over-diversifying for that very same reason (Peter Lynch is one of them)

So then why not just buy into some total market funds like VTSMX and VGTSX and forget about it? It's admittedly a "diehard" approach (see: www.diehards.org), whereas of the AT discussions seem to focus on how to beat the market.

 

[Argo]

Originally posted by: JS80

Originally posted by: Argo

Originally posted by: Yossarian

Originally posted by: Argo
1 part AMTD
1 part NE
1 part ETFC
1 part GRP
1 part NFLX
1 part BLUD
2 parts foreign mutual fund (far east)

6 individual stocks and a mutual fund is far from diversified.

I think 6 stocks is about as many as a part-time investor can maintain. Any more and you probably aren't doing as much research and just picking random stocks.

6 is enough to achieve efficient frontier but amtd/etfc count as 1 and you have a bunch of small cap stocks that kill it.

Agree with you on ETFC/AMTD - that was my mistake, I didn't think to much of it as I was temporarily shifting my position from AMTD into ETFC. As for the "bunch of small cap stocks" comment - I disagree. Most of those companies have more than 5 billion capitalization.

In the end I do not regret the loss, I just want to make I learn something from it.

 

[alrocky]

Originally posted by: Argo

Originally posted by: Lothar

Originally posted by: Argo
In the last 3 business days my portfolio dropped almost 25%. I was fairly well diversified, but majority of my losses were caused by oil and financial stocks, as well as a far east mutual fund. I've been an active investor for the past 6 years and this is the worst span of 3 days I've ever seen. This includes a post 9/11 sell off as well.

If your portfolio dropped 25% in the last 3 business days, then you're not well diversified.

Yeah, that was my thought as well.

I don't agree with that at all. Define well diversified?

Vanguard Total Stock Mkt Idx (VTSMX)

12-Nov-07 34.80
09-Nov-07 35.19
08-Nov-07 35.69
07-Nov-07 35.69

35.69 - 34.80 = 0.89

.89 / 35.69 = 0.0249 or 2.5% drop

 

[alrocky]

Originally posted by: alrocky

Originally posted by: Argo

Originally posted by: Argo
In the last 3 business days my portfolio dropped almost 25%. I was fairly well diversified... Define well diversified?

Vanguard Total Stock Mkt Idx (VTSMX)

12-Nov-07 34.80
09-Nov-07 35.19
08-Nov-07 35.69
07-Nov-07 35.69

35.69 - 34.80 = 0.89

.89 / 35.69 = 0.0249 or 2.5% drop

13 Nov-07 35.79
07-Nov-07 35.69

Back in the Black!

----

i only recently bought into mutual funds....it's mostly for retirement so hopefully it's just a temporary lull and i can pull out of it.... i've got more than 30 years till i retire

yikes!

 

[HeroOfPellinor]

Originally posted by: Argo

Originally posted by: JS80

Originally posted by: Argo

Originally posted by: Yossarian

Originally posted by: Argo
1 part AMTD
1 part NE
1 part ETFC
1 part GRP
1 part NFLX
1 part BLUD
2 parts foreign mutual fund (far east)

6 individual stocks and a mutual fund is far from diversified.

I think 6 stocks is about as many as a part-time investor can maintain. Any more and you probably aren't doing as much research and just picking random stocks.

6 is enough to achieve efficient frontier but amtd/etfc count as 1 and you have a bunch of small cap stocks that kill it.

Agree with you on ETFC/AMTD - that was my mistake, I didn't think to much of it as I was temporarily shifting my position from AMTD into ETFC. As for the "bunch of small cap stocks" comment - I disagree. Most of those companies have more than 5 billion capitalization.

In the end I do not regret the loss, I just want to make I learn something from it.

Well, it's only a loss if you sell it, right?