NY Sportfan here are some thoughts on setting up a portfolio.
1. KILL DEBT. most people have credit card debt, terrible get rid of it, 18%-29% is bad. hear people tell me they only have a few thousand on it. they are paying high rates.
even debt like student loans ect. know a friend said he had $10K extra to invest was looking at Cdn. Superior (have to update that stock had a run up and down). he owed over $15K in student loans pay off debt.
2. try to pay cash....... many people are putting everything on layaway, electronics, furniture, try to pay cash especially on smaller items. save up until you can afford it.
3. have some cash on hand. often a rule of thumb is 6 months. when started out I had much less than that, but try to have a least have a couple of months of cash on hand. this will not return much (cashable CD/GIC ) however in case of changes to health, employment, moving expenses, rent, house repairs have some cash on hand. VERY IMPORTANT
4. most of my money is invested in equities probably will always have a large portion in stocks.
5. like stocks that pays dividends, have growth stocks but my portfolio is comprised of stocks that pay dividends and increase them over time, along with their profits.. will trade out of (reduce) some of these positions. Also I write options this along with the dividends bring cash into the portfolio.
6. penny stocks small caps have invested in these and currently do however for the most part do it through small cap funds. best to have a few because it is hard to say which one will hit. my shareclub for a contest picked 4 blue chip all are up and a small cap.... a lottery stock, picked it at .25, (for contest at .45) now at .90 this can go up and down .25 in a few days.
7. as to your question about spreading out your investments in different asset classes. and why.
every so often gold stocks/precious mutual funds go on a run. in 2002-2003 you probably did well investing in gold stocks. silver is at multi year highs. I do not know what year moose pasture (jr. golds) are going up. so I put a small % (5-10%) in the sector.
same can be said for energy stocks, though for the most part have a larger percentage in this sector, many jr. and midcaps can have cashflow quickly, cannot say that for jr. mining stocks.
anyways you just do not know what sector will hit. would have most of your money in general indexes or funds that invest. only a small amount in specialy funds ie. tech, gold, oil, resource, emerging markets.
bonds have held up but do not own any long term bonds 20-30 years, maybe a mistake but keep them short term cannot see rates going much lower, another .25 in Canada maybe half but in the states they have bottomed. famous last words.
still have some % in bonds would have more of it in equities given your age. but that is up to you.
thanks
selkirk
