Last July I built a portfolio representing how I would invest a lump sump of one million dollars if for whatever reason I came into a pile of money. I went with a batch of 40 stocks that I felt were reasonably priced, high quality, and provided a decent yield for the portfolio. The portfolio has done quite well over the last year, so I wrote an update article discussing the winners/losers and what lessons I learned looking back at the selections.
As usually happens with articles on Seeking Alpha, there was some good discussion that followed, and the question came up about what possible trades I would make to improve the portfolio. This led me to an idea for a new series where I will track not only the original 40 stock portfolio, but will also make trades in the portfolio based on changing market conditions to cut the losers and replace them with "better" companies. I will then track both portfolios going forward to see if the trades resulted in improved performance, or if simply being patient and holding the original selections would have been better.
My plan is to revisit the portfolio every year, make any changes to it that I see fit, and then continue tracking the original and each new iteration and make comparisons between them all. I think this could be a nice case study in portfolio management, and also could be a nice way to see how recency bias and lack of patience can affect long-term investments. It it better to be patient and hold positions through a business cycle or trade in and out of stocks as sectors see ups and downs?
The response so far has been good and I'm excited to see what unfolds. Hopefully I can learn something from the exercise.
Article #1
A Dividend Growth Stock Portfolio For July 27, 2015
Article #2
If I Had A Million Dollars...One Year Later
Article #3
If I Had A Million Dollars: A Case Study In Portfolio Management
As usually happens with articles on Seeking Alpha, there was some good discussion that followed, and the question came up about what possible trades I would make to improve the portfolio. This led me to an idea for a new series where I will track not only the original 40 stock portfolio, but will also make trades in the portfolio based on changing market conditions to cut the losers and replace them with "better" companies. I will then track both portfolios going forward to see if the trades resulted in improved performance, or if simply being patient and holding the original selections would have been better.
My plan is to revisit the portfolio every year, make any changes to it that I see fit, and then continue tracking the original and each new iteration and make comparisons between them all. I think this could be a nice case study in portfolio management, and also could be a nice way to see how recency bias and lack of patience can affect long-term investments. It it better to be patient and hold positions through a business cycle or trade in and out of stocks as sectors see ups and downs?
The response so far has been good and I'm excited to see what unfolds. Hopefully I can learn something from the exercise.
Article #1
A Dividend Growth Stock Portfolio For July 27, 2015
Article #2
If I Had A Million Dollars...One Year Later
Article #3
If I Had A Million Dollars: A Case Study In Portfolio Management
. I was actually thinking about adding more AMGN and PM here.