Re: Young Folk Portfolio -- Changes.
I am going to be cutting back on the number of holdings we have. In the Young Folk Portfolio for example, I will be dropping 18 companies and adding 2 for a net loss of 16 holdings.
I simply have too many holdings in this portfolio, 81 in all, and with only $600 per month to invest, and most of the annual cash contributions going into the Roth, it doesn't leave much money to build positions up in size. So, I'm going to limit the number of holdings and the ones I keep will be larger positions.
The taxable account is twice as large as the Roth account and there isn't any cash going into the taxable at this time, so all of those assets are on dividend reinvestment.
In the Roth account, there isn't enough dividends coming in every month to add to the monthly cash contribution to build positions up in size. When you have an asset whose share price is $500 such as COST is, then it takes a month's worth of cash to add 1 share. When there are 30-40 companies in an account, it's difficult to build these positions up. There are very few companies that we hold that aren't at least triple digits in share price.
In the past, it would have taken 5 or 6 months of cash contributions to buy 1 share of GOOGL for example and going forward I won't mind doing that as long as there aren't as many other positions to add to as well.
To make matters worse, from a building up in size perspective, is that I do have multiple pair holdings. For example, HD and LOW, PG and CL, NSC and UNP, etc. Rather than keep both, I am going to choose one and build the other up in size. I have held these positions a number of years and I know which ones have been the better performers so that's what I am going with.
I need to simplify things a little more for the people, (who don't have market experience), to manage this portfolio after I'm gone. The questions have already started as I have been asked, should I add to HD or LOW? Now they wil have a little more clarity.
Here is what I am selling tomorrow, and it has nothing to do with whether they are a good or bad investment. I would be keeping them all if I had more money to invest every month.
Selling:
UNP .. LOW .. AWR .. BIP .. BLL .. LSI .. TTC .. BMI .. CE .. SNA .. LYB .. CL .. SJM .. DLR .. TSN .. LII .. CCI .. POOL.
I will be starting new positions in GOOGL and KLAC.
I will be adding to the following:
SHW .. TMO .. O .. COST .. PG .. MSFT .. ANTM .. UNH. |
