Skip to main content

A Look into Portfolio Diversification

Image result for stocks charts

I talk a lot about buying individual stocks over mutual funds because I am trying to teach you the basics of Wall Street.  Ironic that my next stock I would put my own money into would be T. Rowe Price (TROW) that actually is a fantastic mutual fund company that offers a variety of already pre-diversified funds.  I am however looking at the actual returns from the company though and the upward spiral they have had in the last 5 years.  I want you to go to www.CNBC.com, or any other place you choose to look up a stock and in the search type TROW (where you search for individual stock picks) on the site (s) it will show a stock chart you can choose 1 day, 5days, 1 year or 5 years etc.  In this case pull up the chart for 5 years this chart much like an example above is quite impressive.  While I will not get into the specifics at the moment of reading the graphs and strategies to interpret graphs and risk potential of a graph chart; I want you to get comfortable with searching around and understanding what it represents which is a history of previous performance.  Now go pull up the graph for all time, look at the sharp dip in 2008 and notice if you were looking at a 6 month graph at that time how scary that would look.  Of course you can see the big market hit in 2008 that it represents and how financial stocks took a beating but look at how T Rowe Price recovered.

Another thing that makes them very interesting to me is they pay $2.80 a share per year dividend.  So if you are retired or close to retirement you can get a quarterly check during the year as a bonus and still have the overall price of your investment going up year after year.

Many of the things I consider when saying look into this stock; is that it has solid investment potential I try to look at new sectors of the economy for us where we haven't looked at before.  Remember when we started with a REIT in Washington Real Estate Investment Trust (WRE) then moved into high tech with Nividia (NDVA), then to high tech / retail with Alibaba (BABA) on to Alison Transmission Holdings (ALSN) for manufacturing and RES Med (RMD) in medical and now T Rowe Price for a financial.  We are building our own diversified portfolio and in a sense creating our own mutual fund.  The reason for this is if one sector of the economy is performing chances are others are not, but over a 5-15 year cycle with each cycle really being around 8 years up and down you can be safe in knowing you don't have to move investments around to often and grow money over time.

Now if you are still really ski-dish about getting your feet wet buying an individual stock then look into the actual mutual funds of T Rowe Price.  You might even be able to see some of them in your companies 401K plans.  The reason you are seeing these in your 401K plan is because your administrator be it Fidelity, Merrill Lynch, The Principal or others have found these funds to be solid performers and a great track record over time to be wise investment choices.  If you never set off on an adventure with me or the rest of my readers here and buy individual stocks it does not mean that having 5-10 mutual funds is a bad investment choice.


Donations: Paypal: williamswallstreet@gmail.com this is meant for entertainment and educational purposes only investments and purchases are your choice and I always recommend speaking with a licensed financial advisor before making any investment decisions.

Comments

Popular posts from this blog

What is the Trumpty Dumpty Poem? Question from Readers Richard & Shannon

Richard & Shannon of Albuquerque, NM I am glad you asked that question.  I can see that the over 1,000 times I have posted this to social media it has seemed to take of and obviously I am able to borrow this graffic from someone who copied my poem.  I have seen variations of it but I can assure you mine is the original it dates dack to around March of 2017.

I did however not coin the phrase Trumpty Dumpty this was done by another Albuquerque resident that called into my friend Radio Talk Show host Norman Goldman (we met through our mutual friend Ed Schultz who just recently passed R.I.P.) you can listen to his show on AM 1350 in Albuquerque from 4-7pm Mountain (for the rest of the country check his website).  I wish I remembered the ladies name.  I first posted the peom on my Facebook page the day after the lady stated it on the show so if anyone claims copyright I can prove them wrong I wrote this enjoy"

"Trumpty Dumpty wants to Build a Great Wall"
"Trumpty Dum…

Homeless and Living with Covid 19 ~ My Personal Story

So I was diagnosed with Corona Virus on May 25th, 2020 at Martin Luther King Hospital in South Central Los Angeles. I arrived at the emergency room at 8:00am in the morning, after being triaged they suspected myself and two other gentlemen from the sober living recovery home where I was staying did indeed have the virus. So while we waited for the results which would take two hours I was scared my worst nightmare would come true I would have it, be homeless again and tossed out into the street.
     The two hours was an excruciating long time I was petrified, scared and facing the overall fact this may be it I might die. Then I remembered I have been through this before.  The first time I went in for my AIDS test back in 1986 after having been all over Europe and with many a man, I was back in my hometown in Waukesha Wisconsin and was the first ever patient at Waukesha Memorial Hospital to have the AIDS test administered. The girl in the laboratory was my friend from high school…

Liars and Buyer's and Bear's oh My!!!!!!!!! The Dow drops another 1000 points!

VS. 

If you have read my previous articles over the last couple of days I said I would be more worried if the DJIA corrected 2600 points in one day (10%)  well as of today that leaves us around 2,100 points off last week Wednesdays open.  I am still not in a panic and here is why:
Bulls vs. Bears
I'm looking at you right now stop talking to your dog and trying to make his head tilt to the side so you can do the Scooby Doo voice and say "Huh?"
What are they? Why do people on Wall Street keep referring too all these Bull markets, all these Bear Markets?  Why do people on Wall Street go South most of the time, North every so often but never East and West? These are terms that Wall Street users identify certain periods of time.  A "Bull" market is one that is charging upward (like a Bull lifting its horns upwards no end in site) while a "Bear" market means things are on the way down (like a bear striking with its claws downward)  this is also considere…