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New investments for the new year?
Old 12-24-2005, 01:12 PM   #1
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New investments for the new year?

Anyone planning on doing anything different in the new year? I know this is a common time for rebalancing, etc., so I thought I'd ask.

I am planning on:

- reducing my average position size. I tend to maintain a concentrated portfolio, which means I make fewer, bigger bets. This has been pretty rewarding, but I am realizing that A) when I make a good pick and something shoots up, I have a REAL concentration problem and B) I no longer need to shoot the moon to get to FIRE on time, so a better risk-reward trade-off includes smaller positions.
- increasing my bond allocation, mostly by trying to buy undervalued exchange-traded bonds and preferreds. There are some attractive values out there from time to time, and I have ample room in my tax-deferred accounts to take advantage of these income-producing securities.
- Starting to take profits a little earlier. I have a tendency to buy and forget. This is fine for getting good returns and waiting out volatility, but it aggravates my concentration problem. Selling a piece of an appreciated position earlier on and keeping form price targets in mind will help.
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Re: New investments for the new year?
Old 12-24-2005, 01:32 PM   #2
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Re: New investments for the new year?

Quote:
Originally Posted by brewer12345
Anyone planning on doing anything different in the new year?
I'm intrigued by foreign ETFs like PID, EFA, & EFV. More money from Tweedy, Browne may go into these funds, especially if there's a seasonal-style selloff.

I'm going to give Nortel (NT), Sun (SUNW), Dolby (DLB), and Las Vegas Sands (LVS) one more year. All of 'em were pretty flat compared to my purchase prices.

I'm going to watch Pre-paid Legal (PPD), Eagle Shipping (EGLE), & Polymedica (PLMD) for fire sales.

I'm going to improve my small-cap value screens and shorting criteria.

I'm going to try to figure out a way to short GM just before they declare union-breaking bankruptcy...
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Re: New investments for the new year?
Old 12-24-2005, 03:35 PM   #3
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Re: New investments for the new year?

I will be adding to John Hancock Preferred Income (HPI) and some individual preferred issues in 2006.* *I have been able to find quite a few preferreds yielding slightly over 6% that qualify for the 15% tax rate on dividends.* HPI does not qualify.

I will open starter positions in Fidelity International Real Estate Fund and Third Avenue Small Cap Value.

My allocation will be roughly 65% Equities/35% Fixed Income in 2006.* My preferreds are considered part of the fixed income position.

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Re: New investments for the new year?
Old 12-24-2005, 03:36 PM   #4
 
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Re: New investments for the new year?

I'm going to do all my Roth, HSA, and SEP-IRA contributing on Jan 3. *I'll get a whole year of tax-free compounding at no extra charge.

I'm going to change from a 60/40 allocation to 59/41 (and next year, 58/42). *Am I bold, or what?
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Re: New investments for the new year?
Old 12-24-2005, 04:21 PM   #5
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Re: New investments for the new year?

Quote:
Originally Posted by TromboneAl
I'm going to change from a 60/40 allocation to 59/41 (and next year, 58/42). Am I bold, or what?
Al, you're a wild man. Makes me wonder if the beaver hasn't commandeered your computer and is sending squirrelly (beaverly?) messages. 8)


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Re: New investments for the new year?
Old 12-24-2005, 07:04 PM   #6
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Re: New investments for the new year?

Quote:
Originally Posted by TromboneAl
I'm going to do all my Roth, HSA, and SEP-IRA contributing on Jan 3. I'll get a whole year of tax-free compounding at no extra charge.

I'm going to change from a 60/40 allocation to 59/41 (and next year, 58/42). Am I bold, or what?
Okay. You now know the "100 minus your age" rule for your asset allocation.

How about the "200 minus your age" rule for your heart rate:
Code:
Percent of maximum heart rate as a linear function of heart rate where 0% is your resting heart rate, 100% is 220 minus your age:

((220-A-R)*C/100+R)*S/60=H where A is your age
                 R is your resting heart rate
                 C is percent of maximum heart rate
                 S is the number of seconds that you
                  count beats, and
                 H is the number of beats counted
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Re: New investments for the new year?
Old 12-24-2005, 07:27 PM   #7
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Re: New investments for the new year?

Nothing new for me but just a slight allocation change. I have been roughly 1/3 cd's, 1/3 bonds, 1/3 stocks.

2006 Allocation
1) 40% Stocks
2) 10% Commodites & Reits
3) 20% Bonds & Convertibles
4) 30% cd's

The above is accomplished with my same old funds as invested below:

1) 50% Trowe Price Cap Appre Stock Fund - 60/40 balance
2)* 5% Pimco Commodity Fund
3)* 5% 3rd Ave Reit
4) 10% Fidelity Int'l Discovery
5) 30% cd's 1-3 years
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Re: New investments for the new year?
Old 12-24-2005, 07:40 PM   #8
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Re: New investments for the new year?

Quote:
Originally Posted by Merlin
I will be adding to John Hancock Preferred Income (HPI) and some individual preferred issues in 2006.* *I have been able to find quite a few preferreds yielding slightly over 6% that qualify for the 15% tax rate on dividends.* HPI does not qualify.

I will open starter positions in Fidelity International Real Estate Fund and Third Avenue Small Cap Value.

My allocation will be roughly 65% Equities/35% Fixed Income in 2006.* My preferreds are considered part of the fixed income position.

If you aren't already aware of it, http://www.quantumonline.com/ is a great resource for income investments (preferreds, etc.).
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Re: New investments for the new year?
Old 12-24-2005, 07:45 PM   #9
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Re: New investments for the new year?

Will be doing some major overhauls in 2Q06 when I repatriate back to Canada. *Cannot do selling now due to dual taxation issues and other ACB issues that are perceived differently between the 2 countries.

2Q06 will see me cash in a good portion of my actively managed equity mutual funds and pick up a significant ETF or index fund Bond component which should be about the right timing with both Canadian and US Fed likely turning off any more rate increases. *Want to get to about 60/40 equity/fixed over the course of 2006 and migrate more actively managed equity funds to ETFs.
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Re: New investments for the new year?
Old 12-25-2005, 05:35 AM   #10
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Re: New investments for the new year?

No change planned for 2006.

Have my plan set, and I'm sticking to it.
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Re: New investments for the new year?
Old 12-25-2005, 06:54 AM   #11
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Re: New investments for the new year?

No changes. If I had "new money" to invest, it would go into
real estate. Don't expect that to happen.

JG
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Re: New investments for the new year?
Old 12-25-2005, 09:30 AM   #12
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Re: New investments for the new year?

Quote:
Originally Posted by TromboneAl
I'm going to do all my Roth, HSA, and SEP-IRA contributing on Jan 3. I'll get a whole year of tax-free compounding at no extra charge.
I used to do my entire Roth contribution at beginning of January. Now I do a Roth conversion at beginning of January, enough to get a to the end of the 0% tax bracket, and then (usually) do another conversion at year end so that all sources of tax combine to get me to end of 15% bracket. If all were to go smoothly (usually does, but not this year) then the 10% bracket is filled with Roth conversions and NQ divs, and the 15% filled with lt cap gains at 5%. IIRC, when cap gains rate was higher, I did bigger conversions.

This is the extent of my tax gaming. When I had chances to do silly things to get deductions that were legal but not the intent of the law, I never did. In a sense, I probably overpaid my taxes the whole time I was working, by never doing anything aggressive, other than maxing out all retirement contributions. But retirement plans are really sweet, taxwise.
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Re: New investments for the new year?
Old 12-26-2005, 01:01 PM   #13
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Re: New investments for the new year?

One thing I have initiated is the transfer of about 12% of my financial assets from an old IRA in an Oppenheimer Growth Fund (OPTFX) into my govt TSP retirement account (like a 401k) The funds will go into a Lifecycle fund something like a Vanguard Target Fund. This will make my AA a bit more conservative.
I thought maybe I would be missing out on a growth fund cycle but a good % of the Lifecycle fund is in the S&P500 so that should caputre some of the growth if it occurs and I have better protection for the possibility of a down market.
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