Long term portfolio

[ferco]

What is the group's opinion of the following LT portfolio:
Bank of America
Home Depot
Exxon
GE
Dell
Microsoft
JNJ
Lincoln Nat'l
Proctor and Gamble
LEICX
Merck(actually was sold)

Would you buy, hold, or sell ?

I was thinking of adding Hershey, Wrigley , PepsiCo; Also looking at Surgical Robotics.

 

[brewer12345]

LEICK = 1.89% expense ratio = highway robery. Put it on the block.

 

[LOL!]

Your portfolio will behave like the S&P500 because you have 6 of the top 7 holdings of that index.  I used to do this when I tried to sell lots of covered calls.  So if you aren't doing something extra with these individual stocks, I think you are wasting your money and time.

I think you also need to diversify away from domestic megacap stocks which should be less than 40% of your portfolio.  You should buy ETFs and pretend they are individual stocks if you feel compelled to own individual stocks; some that come to mind are SPY, MDY, EFA, IWM, PID, PZI, EEM, RWR.

Well, you asked for opinions, so I gave you some.

 

[ferco]

Brewer,
I'm trying to "ride" the uptrend of LEICX to 22 at least.

 

[brewer12345]

Brewer,
I'm trying to "ride" the uptrend of LEICX to 22 at least.

Fine, but I would find a cheaper alternative that has the same/similar exposures.

 

[ferco]

Brewer,
I went to Yahoo finance's section on ETF's. I'm having a hard time seeing the difference between buying the "garden variety" Vanguard index funds and buying a ETF. Can you explain the difference in holding for example JNJ and GE, both large caps and holding a large cap indexed ETF. I looked up the ETF's listed by LOL and most seem to have done well over the past decade.

 

[brewer12345]

Not sure I understand. The VG index funds are very, very similar to an ETF that tracks the same index. I tend to look at them interchangeably and pick one over the other based on price (expense ratio).

As for holding individual stocks vs. the index, they are two different things. You are unlikely to be able to assemble and maintain a passive portfolio of individual stocks for less than an ETF/index fund will charge. So unless you want to be a stock picker, I would probably just go with the relevant fund.

 

[ferco]

Sooooooo....Since I already have VG Wellington and VG Target 2045 in the long term fund I can just sell the individual stocks originally listed in the portfolio and transfer into the Wellington/Target 2045 funds .......opinion please.

 

[brewer12345]

Sooooooo....Since I already have VG Wellington and VG Target 2045 in the long term fund I can just sell the individual stocks originally listed in the portfolio and transfer into the Wellington/Target 2045 funds .......opinion please.

That's fine, but you will be picking up different exposures. The stocks you listed were all large cap US companies. Wellington and 2045 have some bonds, mid caps, small caps, international stocks, etc. in addition to US large caps.

 

[ferco]

Brewer,
I would think(hope) that the diversification going from Large Caps to Wellington/Target 2045 would be a GOOD thing over a 10 year period.......To quote Cramer "am I diversified" ?

 

[brewer12345]

Brewer,
I would think(hope) that the diversification going from Large Caps to Wellington/Target 2045 would be a GOOD thing over a 10 year period.......To quote Cramer "am I diversified" ?

I agree, but I was just trying to point out that it was a bit of an apples to oranges shift.