Since I last wrote (which has been a while), I've made some changes to my investment positions and wanted to pass them along.
- I sold Citigroup for a small 5% gain last week a $38..While I think Citi will be a great investment holding at some point (considering the stock is trading well below it's book value of $45/share), I took my profits because I've been holding the stock for too long and I've grown impatient with it - since I've sold it, the stock has traded back down to under $36/share and I wouldn't be a buyer again until it trades back to around $33.
- I just sold out of all of my Yahoo stock right at $18/share because I wanted to pocket my double digit gains. I continue to believe Yahoo will trade up to the mid $20's over the coming year as the new CEO is doing a great job turning the company around. I will be buying the stock back if it moves towards $17/share as I want the investment to be a long term position.
- I still own Chimera Investment Real Estate company b/c it pays a 13% dividend yield AND the housing market continues to show improvement.
- I sold half of my position in KKR Financial at $10.50/share (it's now down to $9.90/share). I kept half my shares b/c it pays a hefty dividend of 9%, BUT I didn't want to be greedy as I was up over 15% on my initial investment - I will look to buy more of the stock if it drops below $9.
- I sold half of my positon in Och Ziff Financial as I was also up over 15% on the initial trade. I held on to half because their business is doing great and they pay a 6% yield. I will be a buyer again if it trades back down to around $8.
- I still own Etrade as I'm waiting for the turnaround to continue apace and I still believe the company will eventually be bought out - I'm not adding to my position anymore as I've acquired all the stock I want to.
- I still own some Ford and I'm looking to add to my position around $10.50 or so.
- I recently started buying some CSX Railroad for their dividend AND the fact that it is so very underpriced.
With respect to the overall U.S. stock market and economy, I see that an economic improvement is taking place, albeit at a slow pace. I think U.S. stocks are moderately attractive and I'll be looking to buy Mid and Large Cap Mutual Funds over the coming weeks. (I've currently got about 50% of my managed money sitting in cash and I'll be using that to buy back into the market as the opportunity arises).
Other favorable investments ideas that I've been looking at are in China, where their economy is looking good and improving. I'm going to be investing in that geographic region by buying the Mathews Asian Growth and Income Fund (MACSX). I also like some emerging markets and I will be buying into Latin America with the Fidelity Latin American Fund (FLATX) and Eastern Europe via the Virtus Emerging Markets Fund (HEMZX). I still believe Europe is not a favorable place to invest as the debt issues surrounding member countries of the European Union are still a major issue to economic and stock growth (I've also got my eye on tensions in the Middle East).
Going forward, I plan on arranging my portfolio so that my exposure is somewhat like this:
65% U.S.
20% China/Asia
15% Emerging Markets
- Of course I will always maintain some percentage of cash in my portfolio b/c I will continue to be an "oportunistic" investor as opposed to a "buy and hold" investor. As I type this the market has started to sell off (move down) as investors are concerned with a possible gridlock situation in Washington as both sides of the aisle look to compromise on getting our fiscal house in order (we have too much debt!). While I continue to see corporate earnings progress (which is good for stock prices), the market is too "slippery" right now and I'm going to be patient in how I invest going forward.
One last thing...it's important to keep an eye on what our politicians decide to do in order to cut our fiscal debt; if they decide to raise investment/dividend income taxes that will not bode well for dividend stock holders..something important to watch. BTW, can you believe it's almost Thanksgiving? How time flys.
