Investment Portfolio update – Down and out 8%

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Well, here is the latest instalment of my bi-monthly portfolio update. Like most people last month was especially brutal for my portfolio and I am down on almost all the stocks in it. After a 7% rise up to my last update on May 19th, the portfolio is down 8% (compared to a 12% fall in the Dow) since then. While this may seem like I came out even; I didn’t, as I increased how much I had invested in stocks. So the 8% decline was off a larger capital base. Three new investments to report since the last update. I bought Apple stock (AAPL) stock based on where I think the company is going and growth from its global distribution of the new 3G iPhone. You can read more details about this investment and the rationale here. The second investment was in the Vanguard Total International Stock Index ETF (VGTSX). I undertook this investment to get some international equities exposure, and this fund provides a very extensive global offering. Finally I took a small opening position in Dupont (DD) based on the fact that I think it is a good long term play on the agriculture and solar boom. It also has a healthy 3.5% dividend yield. All the new additions are long term holdings, which means I am not too worried about recent falls.

Note: I know some readers have sent me emails and comments for my opinion on stocks they are considering. I will soon do a comprehensive post on them and whether I think they are a buy or sell.

*Current Price as of July 1 2008.

Where to next
For now I am going to hold back from any new investments until markets stabilize. I am also getting close to my $50,000 portfolio goal I set earlier this year so not looking to add new capital. Hopefully gains later this year should bring it to the $50,000 mark. After doing a sector analysis on my portfolio, I have close to 60% of my holdings in technology related stocks. So future investments will focus on other sectors (like energy) to ensure my portfolio is adequately diversified. A number of recent commentators have said I should sell Apple stock and that this investment was speculative. This was not the case and like most of my holdings I normally have a 3-7 year horizon when investing in them. This is not to say I won’t sell if the company or its management is going downhill, but I prefer a buy (for the right reasons) and hold approach. The only speculation I do is with options – but in a very limited sense and normally after a lot of thought. Things aren’t going so well for me right now, but I am not panicking as markets get rocky and like past investment cycles I think I’ll come out fine at the end.

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