Portfolio Advice

B

buyza

I am a somewhat new investor and buying up mutual funds I have tried to build a portfolio. I have tried reading a lot and figuring out how to diversify, but there is so much disagreement it seems. Using a bit of info from each reading I made up I tweaked my portfolio. I am 20 years old and have had a few mutual funds for a long time that were started by my parents. I now own a couple more. I used morningstar Xray to break down my portfolio and would love to know if I am doing any good or what should I change if anything.

Information: 19.43% (one of the 3 sectors morningstar breaks up stocks in)
software: 1.89%
hardware: 6.54%
Media: 5.58%
Telecom: 5.41

Service: 43.97%
Healthcare: 15.59%
Consumer Services: 5.44%
Business Services: 5.11%
Financial Services: 17.83%

Manufacturing: 36.60%
Consumer Goods: 4.93%
Industrial Materials: 14.03%
Energy: 16.14%
Utilities: 1.50%


The country break up is:

USA And Canada: 65.21%
Europe: 9.41%
Japan: 6.62%
Latin America: 3.58%
Asia And Australia: 5.84%
Other (which consists of eastern europe, some africa, some middle east, and a bit of russia): 9.34%

Aggressive growth is rated at 10%
Speculative Growth 6.16%
Slow Growth: 10.30%
Classic Growth: 32.65%

plus a few other 2-3% categories which I am unfamiliar with.

I would love some advice. Anything anyone can tell me would be great. Thanks in advance.

-matt
 
Quote from buyza:

I am a somewhat new investor and buying up mutual funds I have tried to build a portfolio. I have tried reading a lot and figuring out how to diversify, but there is so much disagreement it seems. Using a bit of info from each reading I made up I tweaked my portfolio. I am 20 years old and have had a few mutual funds for a long time that were started by my parents. I now own a couple more. I used morningstar Xray to break down my portfolio and would love to know if I am doing any good or what should I change if anything.

Information: 19.43% (one of the 3 sectors morningstar breaks up stocks in)
software: 1.89%
hardware: 6.54%
Media: 5.58%
Telecom: 5.41

Service: 43.97%
Healthcare: 15.59%
Consumer Services: 5.44%
Business Services: 5.11%
Financial Services: 17.83%

Manufacturing: 36.60%
Consumer Goods: 4.93%
Industrial Materials: 14.03%
Energy: 16.14%
Utilities: 1.50%


The country break up is:

USA And Canada: 65.21%
Europe: 9.41%
Japan: 6.62%
Latin America: 3.58%
Asia And Australia: 5.84%
Other (which consists of eastern europe, some africa, some middle east, and a bit of russia): 9.34%

Aggressive growth is rated at 10%
Speculative Growth 6.16%
Slow Growth: 10.30%
Classic Growth: 32.65%

plus a few other 2-3% categories which I am unfamiliar with.

I would love some advice. Anything anyone can tell me would be great. Thanks in advance.

-matt
More...

Yes. Don't be so heavy on North America.
 
If you want to diversify you will need to do some analysis on your portfolio to see which components are too related to each other. If you want TRUE diversification you will not want to be all in equities. Maybe you want some bonds, RE, or even hedgefunds mixed in. Right now your portfolio is probably too similar to the S&P500 or QQQQ.
 
Quote from buyza:


I would love some advice. Anything anyone can tell me would be great. Thanks in advance.

-matt
More...

Since you're a newbie and you want to diversify that much, you might as well just buy a mutual fund since they have much more experience in this line of work. My favorite is BRUFX; the guy's a genius.
 
For 20 years old, I'd say you are starting off well for an "investor", some of the traders here may not see it that way.

Take a close look at the funds you invest in and look at their top 10-20 holdings, I bet there is significant overlap with other funds.

It appears you are all equities which some fortune tellers/financial planners/asset allocators may steer you to some portion in bonds.

I like your percentages, but in the end your personal bias and choices will define what 'sectors' you may become overweight in.

Over the last 4 years my portfolio (investment portion) has slowly genetically become overweight in oil, healthcare and commodities and for some reason Brazil and Russia. My trading portion (which I reserve 25%) is what I use for short term trading/options etc.

Keep on reading, re-evaluating and of course take every person's opinion with a pound of salt.
 
All my holdings are mutual funds.

Yes some of them overlap. Most my holdings are big cap also.

I also carry 50% of my overall portfolio in cash/real estate equity. I also have some savings bonds given to me when I was a child by my grandparents.

Am I really too much in north america?

I am heavy in oil, healthcare and financials as my big 3. Then also industrials and tech.

I put a decent amount in latin america, russia, and eastern europe for growth potential.

Should I buy into some bond funds and where do I buy into hedgefunds? I had a bond fund before, but it was only giving me a 4-5% yearly return, whereas I am getting 6-7% in CDs on my liquid assets.
 
break down of my holdings if it helps with giving me some tips.

T Rowe Price Int:Em Euro - 15k - mostly eastern europe and some middle east/africa. 1.25% expense ratio.

T Rowe Price Int:EM St - 2.5k - emerging markets of latin america, asia, europe, and middle east. 1.25% expense ratio.

T Rowe Price New Era - 15k - natural gas/industrials (exxon, dutch, cooper etc). .66% expense ratio.

T Rowe Price Media/Tele - 7.5k - media/telecom - .87% expense ratio.

Vanguard Pac Stock;Inv - 10k - asia, mostly japan. .27% ratio.

Vanguard Hlth Care;Inv - 10k - healthcare - .25% ratio

Vanguard Chester Fds TGT RET2050 FD - 15k - holds a wide range.

T Rowe Price Ret:2040 - 15k - wide range as well

Legg Mason Ptrns Fundam Value CL B - 16k - common stocks/stock equivalents (news corp, jp morgan, bank of america are some of top holdings). 1.95% expense ratio.

Legg Mason Ptnrs Aggress Grw CL B - 17k - aggressive growth (tyco, lehman bros, anadarko petro, unitedhealth group, weatherford int are top 5 holdings). 1.95% expense ratio.

I want to maybe dump these funds and my other legg mason since expense ratios are high. I just am pissed because they have redemption fees. These funds were picked out for my when I Was 14 and first invested money. I have gotten roughly 11% return yearly on each which isn't too bad I guess, but still could have done better if I knew about vanguard or t rowe price then.

Fidelity Adv Nw Ins;C - large growth - 6k - (google, berkshire, apple, HPq) 1.83% ratio.

Royce Fd:Micr-Cp;Cons - 6k - small blend - 2.42% expense ratio (sad, I know Sad )

T Rowe Price Int:Lat - 2.5k - large growth in latin america. 1.24% expense ratio.

Also was thinking of getting TRAMX which is the new t rowe africa/middle east fund. Was going to get 2.5k in that one.

Using morningstar xray I also saw that like 70% of my stocks were large cap (16% value, 21% core, 33% growth), 20% mid cap (3 value, 5 core, 12 growth), and 9% small (1 value, 3 core, 5 growth).

thanks again!!
 
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