How come no one discuss about the market anymore?? Let's start to 灌水。。。
Anyhow, today's market is at its depression or despondency period, although it is intimidating to think of investment now, but smart investors consider this wil actuallyl return maximum financial opportunities; plus keep in mind stocks work best over the long run period. Summarized below are some ideas in building a good stock portfolio, FYI:
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1. Stocks should constitute the overwhelming proportion of all long-term financial portfolios. The new government inflation-indexed bonds should be the asset of choice for long-term investors who want to reduce their exposure to equities.
2. Invest the largest percentage -- the core holdings of your stock portfolio -- in highly diversified mutual funds with very low expense ratios. (Mainly index funds.)
3. Place up to one-quarter of your stocks in mid- and small-sized stock funds. (Diversification.)
4. Allocate about one-quarter of your stock portfolio to international equities, divided approximately equally among Europe, the Far East, and emerging markets. (Risk diversification. Open-ended mutual funds, allow for buying and selling shares from investors at net asset value of their portfolio; close-end funds, trade like shares of a portfolio and run by active manager; WEBS and Country Baskets, pools of funds invested in a broad index of foreign stocks.)
5. Do not overweight the emerging markets. High growth is already factored into the prices of many of the stocks of these countries. (Total market capitalization of many small countries is less than some individual firms of developed countries. Spread investing globally between Latin America, Far East, and Central and Eastern Europe.)
6. Large "growth" stocks perform as well as large "value" stocks, and some are worth 30 or more times earnings. On the value side, the Dow 10 Strategy, which picks the ten highest-yielding Dow stocks, has worked extremely well, although its popularity may limit future gains. (Low dividend yields and high price-to-earnings ratios perform just as well over the long run as large value stocks, those with higher-dividend yields and lower P-E ratios.)
7. Small value stocks appear to significantly outperform small growth stocks. Avoid initial public offerings (IPOs) unless you buy at the offering price. (Don't hold on. IPOs, which often include small growth stocks, are extremley poor performers for long-term investors.
8. Maximize your contribution to your tax-deferred account (IRA, 401(k) or Keogh). Generally, fund your tax-deferred account with stocks. If your total stock portfolio exceeds your tax-deferred account, hold high-dividend (or value) stocks in the tax-deferred account, and low-dividend (or growth) stocks in your taxable acccount. But do not overweight tax-deferred account with high-dividend stocks just to shelter dividends.
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I have more to say regarding other financial considerations, such as Mutual Funds, RRSP, mortgages, and etc etc...but let's see the level of interests from pepl first...
Anyhow, today's market is at its depression or despondency period, although it is intimidating to think of investment now, but smart investors consider this wil actuallyl return maximum financial opportunities; plus keep in mind stocks work best over the long run period. Summarized below are some ideas in building a good stock portfolio, FYI:
==================
1. Stocks should constitute the overwhelming proportion of all long-term financial portfolios. The new government inflation-indexed bonds should be the asset of choice for long-term investors who want to reduce their exposure to equities.
2. Invest the largest percentage -- the core holdings of your stock portfolio -- in highly diversified mutual funds with very low expense ratios. (Mainly index funds.)
3. Place up to one-quarter of your stocks in mid- and small-sized stock funds. (Diversification.)
4. Allocate about one-quarter of your stock portfolio to international equities, divided approximately equally among Europe, the Far East, and emerging markets. (Risk diversification. Open-ended mutual funds, allow for buying and selling shares from investors at net asset value of their portfolio; close-end funds, trade like shares of a portfolio and run by active manager; WEBS and Country Baskets, pools of funds invested in a broad index of foreign stocks.)
5. Do not overweight the emerging markets. High growth is already factored into the prices of many of the stocks of these countries. (Total market capitalization of many small countries is less than some individual firms of developed countries. Spread investing globally between Latin America, Far East, and Central and Eastern Europe.)
6. Large "growth" stocks perform as well as large "value" stocks, and some are worth 30 or more times earnings. On the value side, the Dow 10 Strategy, which picks the ten highest-yielding Dow stocks, has worked extremely well, although its popularity may limit future gains. (Low dividend yields and high price-to-earnings ratios perform just as well over the long run as large value stocks, those with higher-dividend yields and lower P-E ratios.)
7. Small value stocks appear to significantly outperform small growth stocks. Avoid initial public offerings (IPOs) unless you buy at the offering price. (Don't hold on. IPOs, which often include small growth stocks, are extremley poor performers for long-term investors.
8. Maximize your contribution to your tax-deferred account (IRA, 401(k) or Keogh). Generally, fund your tax-deferred account with stocks. If your total stock portfolio exceeds your tax-deferred account, hold high-dividend (or value) stocks in the tax-deferred account, and low-dividend (or growth) stocks in your taxable acccount. But do not overweight tax-deferred account with high-dividend stocks just to shelter dividends.
===================
I have more to say regarding other financial considerations, such as Mutual Funds, RRSP, mortgages, and etc etc...but let's see the level of interests from pepl first...
