Friday, February 9, 2007

Diversification II

Ok so after my rant about diversification I’m sure some of you scrolled down to see what my holdings are (and to judge if I’m diversified or not). I got a few emails from people who noticed that I have very little fixed income and no technology companies. Well you asked for it so here it thoughts....I don’t hold any technology companies for the simple reason that I think most of them are over-valued and don’t have a sustainable competitive advantage. A lot of tech companies seem to be trading on the next-big-thing, take the Motorola Razor for example, it was all the rage and now apparently it’s a piece of crap, it’s the reverse for Apple, they went from piece of crap to cool and I’m sure that if something better and “cooler” came out their ipod or iphone would go from cool to crap again---don’t think so? find someone with a teenager and ask them. I on the other hand think banks are cool, insurance is trendy, and nothing is “awesomer” on a nice winter day than oil and pipelines, not to mention a building that houses seniors (CSH.UN)….Radical Dude!

As for fixed income…well that ones easy…
1. The rates sucks
2. I’m young (I can ride the stock market ups and down)
3. Longer term I think high quality dividend paying blue chips will beat the yield of any 10 year bonds (not including junk bonds).


Tim Stobbs said...


Ah youth and avoiding fixed income. I remember those days, but I've recently been adding some bonds to my RRSP's to help stablize my holdings. I like having something that won't dip when the market takes a dive.

Having a kid I found was the tripping point to wanting to stablize things a bit.


Anonymous said...

I agree with you that bonds will stabilize a portfolio however, I just don’t see the incentive to hold bonds in the current interest rate environment (regardless of the target fixed income percentage of a portfolio). I’m not an expert in bonds and fixed income investments but why not simply put your cash in a money market or Presidents Choice Savings Account? As they pay about the same interest rate as government bonds but without the 5 or 10 year commitment. Then if/when bond yields start to climb you can move some of your cash over to bonds.

CanadianInvestor said...

Cannot give you a source but a rule of thumb I've seen is that the fixed income proportion of one's portfolio should approximate one's age. As I've gotten older that thought has made more and more sense to me and I'm gradually increasing the fixed part (currently at about 30%). Like you, the banks look to me much like fixed income and that is kind of a semi-substitute right now.

The other factor is that when one approaches a target total portfolio, such as the million in your case, capital preservation comes to the fore and fixed income is a good, though not perfect if inflation begins to rear its head, way to do that.

Anonymous said...

I simply couldn't leave your site before suggesting that I extremely loved the usual info an individual provide for your guests? Is gonna be back regularly to check up on new posts
Visit my page : experto en posicionamiento

Anonymous said...

Its not my first time to pay a quick visit this web page,
i am visiting this website dailly and obtain good information from here all the time.
my web site > Family vacation at Upper James Manor

Anonymous said...

Hello are using Wordpress for your site platform? I'm new to the blog world but I'm
trying to get started and create my own. Do you require any coding knowledge to make your own blog?
Any help would be really appreciated!
My homepage ; massive systems propagate

Anonymous said...

Excellent, what a web site it is! This web site presents valuable
facts to us, keep it up.
Also see my webpage :: bethesda waters

Anonymous said...

Hey there! This post could not be written any better!
Reading this post reminds me of my old room mate!
He always kept talking about this. I will forward this write-up to
him. Fairly certain he will have a good read.

Thank you for sharing!
Also visit my site ... ikea furniture assembly service


Diversification is key.

Anonymous said...

fantastic points altogether, you just won a brand
new reader. What would you suggest in regards to your put up that you made some days in the past?
Any positive?

Also visit my webpage; Energy Saving
my site :: Visit site

Anonymous said...

Way cool! Some very valid points! I appreciate you writing this write-up
and the rest of the site is also really good.

My page :: listen to this podcast

Anonymous said...

Hi there mates, its impressive piece of writing concerning educationand entirely explained, keep it up all
the time.

my web site :: massage sex

Anonymous said...

Hi! I know this is somewhat off-topic however I needed to ask.
Does operating a well-established blog such as yours require a
large amount of work? I'm completely new to operating a blog but I do write in my diary everyday. I'd like to start a blog so I can easily share my personal
experience and feelings online. Please let me know if
you have any kind of ideas or tips for brand new aspiring bloggers.
Appreciate it!

My web blog;

Anonymous said...

I blog often and I truly appreciate your information.
The article has truly peaked my interest. I am going to
bookmark your site and keep checking for new information about
once per week. I subscribed to your RSS feed too.

Feel free to surf to my blog post :: sex black women white men

Anonymous said...

Hi there! I simply would like to offer you a
huge thumbs up for the great info you've got here on this post. I am returning to your site for more soon.

Feel free to visit my homepage:

Anonymous said...

Your method of describing everything in this piece of writing is really fastidious,
all be capable of simply know it, Thanks a lot.

Here is my blog ... cfnmfever.Net