My investment breakdown, comments wanted

[jeffmem]

Looking for comments and suggestions.

Cash: 15.8%
Stocks: 24.1%
Mutual Funds: 6%
Bonds: 12.6%
Precious metal holdings: 8.7%
Non-precious metal numismatic coins: 5%
Foreign cash: 25.6%
IRA: 2%


Yes, I know the foreign cash equivalent is high, I will be making some changes to that this year.

[bjl584]

Are any of your investments in a tax sheltered account besides the 2% you have in your IRA?

Other than that, it's hard to comment since I don't know what stocks or funds you own.

I'm not a fan of precious metals, and probably wouldn't have more than a 5% representation of them in my portfolio.

[jeffmem]

Are any of your investments in a tax sheltered account besides the 2% you have in your IRA?

No. And the only ones I know of are IRA's, are their other types?

Other than that, it's hard to comment since I don't know what stocks or funds you own.

I am off to bed, I will consider posting what stocks I own later.

I'm not a fan of precious metals, and probably wouldn't have more than a 5% representation of them in my portfolio.

I should break that figure down..
I have about 5% of it in bullion and 3.7% of silver numismatic coins such as commemoratives and proofs and stuff like that. Does that make you more of a fan? And I am curious, why are you not a fan of precious metals?

[bjl584]

401K, 403B, or Roth IRA would be tax sheltered accounts. Do you have any of these?

And, I never really viewed metals as an investment. They are commodities and are cyclical like anything else. If you play them right, I guess you can profit from them, but you have to know when to buy and sell them. I'm not sure what your strategy is for having them, but I think that people that hold them for security are fooling themselves. Take some gold or silver coins to the grocery store and try to pay with them. They are legal tender and they do have value, but I can guarantee that they won't accept them as payment. In my book, that makes them worthless. To hold them short term to try to turn a profit on them like you would a stock or a certain fund is fine, but to hold them long term as some sort of security strategy to me is on par with people that are currently stockpiling guns and building fallout shelters. I just refuse to live my life that way. If the world ever does come to that point, we will all have much larger issues than a few gold coins will ever be able to fix.

[jpg7n16]

How much do you know about the stocks you are buying? Are you diversified around, or is it all in one company?

How old are you? When are you planning to retire? What are your goals for your investments? Are you saving for a home? Or is this all for retirement?


Without knowing much about you, my thoughts are:
-cash seems high (is this your EF? I don't typically consider it as part of my portfolio)
-too much in stocks
-too little in mutual funds
-bonds are just fine
-too much in metals
-too much in foreign cash (you already noted this)

What would I do? Again, I don't know how well you know those companies, or what allocation is best for your time horizon...
-sell majority of the individuals stocks and 70% of the metals (reduces to 4% of overall portfolio)
-invest all proceeds into stock based mutual funds

And I am curious, why are you not a fan of precious metals?

Because they're at an all time high. I like things with more potential to go up, than to go down. And at current price levels metals seem (to me) to have more downside risk, than upside potential.

[DanielB]

Agree on precious metals. Not a good investment, especially at these levels. As has already been stated, metals are a commodity, just like oil or pork butt. If you are an active commodities trader, you may have room for precious metals in your portfolio; however, I suspect you are not and you would likely be better served by weighting your portfolio more towards stocks. At a glance, your portfolio seems to be designed more as a hedge against current geopolitical forces and less as a securities portfolio designed to produce long-term gains and/or income.

[jeffmem]

I am a little surprised at the responses I got, but ok, I suppose maybe I need to make some changes.

How much do you know about the stocks you are buying? Are you diversified around, or is it all in one company?

I think I know pretty well what I am buying. And yeah I am diversified I think. I have a lot of stocks towards medical and biotech though. I just sold off some other stocks for a profit to reinvest in other things. I perhaps should have kept it because it was non health related. My holdings.


Stocks
APT - Alpha Pro Tech
BP -Bp Amoco Plc (Britain)
AIS - Antares Pharma Inc
APRI - Apricus Biosciences Inc
CECE - Ceco Environmental Corp
INO - Inovio Bio Corp
NED - Noah Ed Hldgs Ltd Adr (China)
NIV - Nivs Intellimedia Tech Gp Inc
STRM - Streamline Health Solutions
ZCLS - Zalicus Inc

EFT's
SLV -Ishares Silver Tr

Mutual Funds:
PRASX - T Rowe Price New Asia Fund
AHSAX - Alger Health Sciences Fund Cl A

My portfolio is up about 25% as of today.

How old are you? When are you planning to retire? What are your goals for your investments? Are you saving for a home? Or is this all for retirement?

I am 35. I would like to retire tomorrow if I could, though realisticlly I am shooting for 60.
My goals are to make as much as I can, but without taking too much risk. I want some diversity some slow growth and some quick growth. Over the years I have been holding stocks for a shorter and shorter time to take profit and reinvest in other things. Mostly all of the investments are for retirement because I do not live in the US, I don't have the luxury of a 401k. So building up cash is a key for me so I have it when I retire.

Without knowing much about you, my thoughts are:
-cash seems high (is this your EF? I don't typically consider it as part of my portfolio)
-too much in stocks
-too little in mutual funds
-bonds are just fine
-too much in metals
-too much in foreign cash (you already noted this)

I would say yeah the cash is more for EF, but it is for other purchases as well, I will never let it drop below a certain amount. I don't really classify it as part of my portfolio, but woudl like to give you guys an idea of what percentages I have for each. I was told last year I should put more in stocks and that is what I did, but now you guys say its too much. haha. I know the mutual funds is a little low, but I have not had much luck. I just sold one off, and after two years I made about 200 bucks. its a growth fund. I took the cash and bought more stocks. The other two I have, one is performing really well, the other is like a turtle, but perhaps that is better for me.

What would I do? Again, I don't know how well you know those companies, or what allocation is best for your time horizon...
-sell majority of the individuals stocks and 70% of the metals (reduces to 4% of overall portfolio)
-invest all proceeds into stock based mutual funds

Why? Do you consider mutual funds to be safer?

Because they're at an all time high. I like things with more potential to go up, than to go down. And at current price levels metals seem (to me) to have more downside risk, than upside potential.

Yes, they are up, but I beleive they are going much higher than they actually are. I think I bought perhaps at a little bit of a high price, but this is for the long term. The bullion I know is risky, but the numismatic coins perhaps would turn a profit someday from other collectors that want them, or do you all still think this is a bad move?

Agree on precious metals. Not a good investment, especially at these levels. As has already been stated, metals are a commodity, just like oil or pork butt. If you are an active commodities trader, you may have room for precious metals in your portfolio; however, I suspect you are not and you would likely be better served by weighting your portfolio more towards stocks. At a glance, your portfolio seems to be designed more as a hedge against current geopolitical forces and less as a securities portfolio designed to produce long-term gains and/or income.

The only metal I am holding is silver, I have very little gold. I know commodities are risky, but I beleive the potential to be quite great in the future. I am not a trader, I am buying for security, yes, but I don't hold all that much, and it's sort of a hobby also, so it has two sides, if nothing happens, then I can still hopefully sell them in the future to another collector. I am surprised you feel that my portfolio is hedged against current geopolitocal forces, the stocks are for profiting which I can then turn into other investments or more stocks or whatever. I am not a day trader either. I watch them, but not every second or everyday. What I do what is long term gains and income. And would be very open to suggestions on that part.

[kork13]

Looking for comments and suggestions.

Cash: 15.8%
Stocks: 24.1%
Mutual Funds: 6%
Bonds: 12.6%
Precious metal holdings: 8.7%
Non-precious metal numismatic coins: 5%
Foreign cash: 25.6%
IRA: 2%

Part of the problem I see is that you don't understand what you're investing in.

Mutual funds are not an investment type as you reference above, they are investment vehicles. Mutual funds can hold a variety of investment types, including cash, stocks, bonds, commodities, REITs, and so on. You can also purchase the same cash, stocks, bonds, commodities, etc. individually. Additionally, all of those investment types can be from domestic, international, large-company, small-company, or other sources.

IRAs are a tax vehicles, which can contain mutual funds, ETFs, or individual investments (the same list of cash, stocks, bonds, etc). IRAs (and Roth IRAs, 401k's, 529 plans, 403b's, and others) provide a means to invest with tax-advantaged status.

What I'm trying to get at is that you need to read up on the details of what you're doing so you can better understand your investments, risks, and opportunities. Do you have a defined investment strategy? Developing one for yourself would pay dividends.

[jpg7n16]

I am a little surprised at the responses I got, but ok, I suppose maybe I need to make some changes.

I think I know pretty well what I am buying. And yeah I am diversified I think. I have a lot of stocks towards medical and biotech though. I just sold off some other stocks for a profit to reinvest in other things. I perhaps should have kept it because it was non health related. My holdings.

Well that's good. It's always good to know about the industry you're investing in. And yes you are diversified - in about 10 different stocks. But like you say yourself, you may not be well diversified among industries.


I did some checking up on your stocks on finance.yahoo.com (look at the 'key statistics' page), and this is what I found:

Stocks
APT - Alpha Pro Tech seems decent
BP -Bp Amoco Plc (Britain) currently has a negative operating margin, and negative ROE
AIS - Antares Pharma Inc has huge operating losses, and a negative 80% ROE
APRI - Apricus Biosciences Inc bleeding money left and right, huge losses and negative cash flow
CECE - Ceco Environmental Corp is selling up 60% from last year, but no fundamentals to support it. picture doesn't look solid. had small free cash flow, but loss posted in net income
INO - Inovio Bio Corp Terrible fundamentals, another company that's bleeding money
NED - Noah Ed Hldgs Ltd Adr (China) Another loser of a company, currently worth 75M total, and lost 28M of cash flow this year
NIV - Nivs Intellimedia Tech Gp Inc Finally, a company that seems to have solid fundamentals in place. Good ROE, profitable, and has slight increase in earning Quarter over Quarter
STRM - Streamline Health Solutions Don't see anything amazing about this company. They are currently a low return business. Maybe you're speculating that that will change?
ZCLS - Zalicus Inc s/b ZLCS - don't see anything spectacular about the company, but it is cashflow positive, and has a good operating margin and ROA

So although you have a lot of healthcare and biotech stocks, you seem to have picked out several terrible companies. They are losing money as a business, and losing cash to boot. I get that you want good companies in the health and bio industries, but you've got to do a better job picking them than this. Diversifying among companies that are all losing money won't magically turn them into a winning portfolio. It'd be better to invest in 4-5 profitable companies, than be diversified over 100 non-profitable companies.

I personally wouldn't touch 6 of your 10 companies. Really I only like APT and NIV.

Unless these are all speculative purchases, that you're gambling their situation will turn around. If that's the case, you have too much of your portfolio tied up in speculative purchases.

I am 35. I would like to retire tomorrow if I could, though realisticlly I am shooting for 60.
My goals are to make as much as I can, but without taking too much risk. I want some diversity some slow growth and some quick growth. Over the years I have been holding stocks for a shorter and shorter time to take profit and reinvest in other things. Mostly all of the investments are for retirement because I do not live in the US, I don't have the luxury of a 401k. So building up cash is a key for me so I have it when I retire.

Okay, so you've got a good timeframe for taking some risk. If you were 10-15 years away, you would need more money in bonds, but you're still realistically 30 years away. You've got some time.

That question was mainly to determine if you should add more stocks or bonds to your mix.

I would say yeah the cash is more for EF, but it is for other purchases as well, I will never let it drop below a certain amount. I don't really classify it as part of my portfolio, but woudl like to give you guys an idea of what percentages I have for each. I was told last year I should put more in stocks and that is what I did, but now you guys say its too much. haha. I know the mutual funds is a little low, but I have not had much luck. I just sold one off, and after two years I made about 200 bucks. its a growth fund. I took the cash and bought more stocks. The other two I have, one is performing really well, the other is like a turtle, but perhaps that is better for me.

Since that cash is primarily EF and savings, I don't think it's a problem. If that were in addition to your EF, that would be an issue. Unless you were about to retire, then it would be normal

Why? Do you consider mutual funds to be safer?

I consider mutual funds to have more of an upside, and to be much more predictable than valuing metals. Mutual funds own companies, companies make profits. Profits grow over time - and are reasonably priced on index type funds at the moment. The dollar figure is higher than some periods before, but the ratio of the price to the earnings is back down to a reasonable level. When I see the stock market, I see good upside potential over the next 20-30 years.

When I look at precious metals (gold/silver/etc.) I see asset classes that are selling for all time highs. They don't make profits. They don't pay out cash or dividends. They are just glorified minerals, commodities -as mentioned by other posters above.

Gold doesn't add value to the world. But businesses can use gold (or other things) to add value to the world. So I'd rather invest in businesses.

But primarily, metals are trading at/near all time highs, and stocks are not. That means there is more upside potential in stocks right now, and not as much upside potential in metals. How much higher can metals go?? They're already higher than they've ever been. So maybe they'll keep going up -they could, I don't know the future- but there's more room for them to fall.



I don't have any metals in my portfolio at all - except if they are held in a mutual fund I'm in and didn't know about.

[jeffmem]

jpg7n16,

Thank you for that.

Here is some further info.

BP -Bp Amoco Plc (Britain) bought it during the oil spill fiasco. so the price I bought at was reasonable. Though I have been tempting to sell it now that it has gone back up.

AIS - Antares Pharma Inc was bought for under a buck, at the time I bought it looked good and I still have profits inside.

APRI - Apricus Biosciences Inc I never bought this stock, orginally I bought NEXM which was sold, I had bought it for like 25 cents a share, but after the buyout, the stock sort of went no where.

CECE - Ceco Environmental Corp - looked good at the time and ths stock keeps floating around 6, speculating it will go up.

INO - Inovio Bio Corp - looked good at the time, speculation, bought it for under a buck.

NED - Noah Ed Hldgs Ltd Adr (China) - was a hot stock when I bought it around 2 something, it went up to 5, where I should have sold it, but didn't. This is the only stock I am losing on in my entire portfolio.

STRM - Streamline Health Solutions - looked good at the time I bought it.

ZCLS - Zalicus Inc - similar to AIS, but I feel it has more potential.

The only one I have lost money on is NED, I should have sold it earlier. The rest of them are giving me profits.

Some other stocks I sold recently, and perhaps were more solid.
XPO
NNN
IGOI

Made money on all of them, but perhaps sold them too early.

So, basically most of the stocks I bought you feel are not all that great, and I think I would agree, but one of my strategies was to buy when they were cheap, which I did, wait until they go up enough to make some decent cash and then sell them off, which probably for some of them I should be doing now. But there is always that hope, and I know this makes me a bad investor, that they will go up more. I should dump most of them, and reinvest in decent mutual funds.

The health mutual fund I have is not going anywhere fast, and it's frustrating after holding it for a year and watching it just basically sit there is not helping me.

I agree within industries I need to diversify more, and I need to find some decent stocks to invest it in. Indeed I have a lot tied up in speculative purchases.

About precious metals, you also don't like numismatic coins then at all.. not as an investment I guess.. I think I would agree with your point in investing in companies that use the minerals rather than the mineral itself. I had been recently looking at rare earths companies also, and decided against it as I would be tieing up money for years with no gains waiting for most of them to get things together. I probably won't be purchasing anymore metals anytime soon. As I add money to my portfolio the percentage I own of those will gradually decline and perhaps I will sell them off in the future.

kork13

I am aware that I can use IRA money to investment in just about anything, and am planning to do so this year. I don't put much into my IRA because I don't have much and feel I can make better profits with the limited amount of cash I do have to invest, even if it is taxed, I am self-employed and every year even though I take profits from selling my stocks, I don't pay capital gains because my income ratio is not enough for the gov't to tax me on those investments. I forgot exactely what my accountant told me, but I rarely pay much if any tax on my stock sales.

I have not developed a strategy persa, but I will consider your advice seriously. Thank you.

[97guns]

I am 35. I would like to retire tomorrow if I could, though realisticlly I am shooting for 60.
My goals are to make as much as I can, but without taking too much risk. I want some diversity some slow growth and some quick growth. Over the years I have been holding stocks for a shorter and shorter time to take profit and reinvest in other things. Mostly all of the investments are for retirement because I do not live in the US, I don't have the luxury of a 401k. So building up cash is a key for me so I have it when I retire..

if you want to retire you need some investments that will bring income. if your plan is to be out at 60 then your fine but if you want to shorten that time start looking for some passive income now.

the only thing i can reccomend is real estate because thats where im at.

[Scanner]

One of the things I recommended when I was investing way back when when I was a young-en like you (I am 42 - you are 30) is to evaluate downside risk on your investment.

The controversey around here is always precious metals and I am known as the "silver bug" around here. I moved 1/3rd of my portfolio to SLV back in 2006. I bought in at $13.65 and it was trading around $34.00 the other day.

The reason I did that is I really thought the downside risk (more than the upside potential) was low. I try to make my investmetn decisions and portfolio moves based on this now -

WHAT IS THE DOWNSIDE RISK? (first)
WHAT IS THE UPSIDE POTENTIAL? (second)

I have to concede at this point, there is some downside risk of silver at $34.00. Now. . .mind you, I even said that around $26.00 a few months ago. I didn't sell. I didn't buy. I "held". Man. . .my portfolio topped 100K yesterday, again, largely thanks to silver.

Now. . .it's decision time for me. . .my portfolio is now 48% in silver, almost half.

(someone get the forum the defib. machine on the wall )

I am turning my eyes to real estate right now and am probably going to really change my portfolio (after all, I hit the 6 figure milestone. . .all or mostly thanks to silver)

So, let's break it down. . .

Domestic stocks? Some downside risk (double dip recession). Lotsa upside potential (I am putting 25% here)
International stocks? I think about equal downside risk, upside potential. I don't like the outlook here. Europe has particularly been too austere with their economies IMO>
Silver? Eh. . .US gov't still wants to keep printing money like it's going out of style (ahem! excuse me. . . I mean "quanitative easing" lol!)
Real estate - I think we are at a bottom. Downside risk is small here IMO. Upside potential - not real great. . .but there is some.
Bond market - bonds have no where to go but down because of record low interest rates. Individual bonds may be okay, but I would not want exposure to the bond market.

So, I haven't decided yet. . .but you can see what I am leaning towards - not abandoning commodities, gonna have some stocks, probably no bond market exposure, maybe some real estate.

I hope just peering into my brain as a fellow silver investor helped. I am a bit of a contrarian investor too.

[jpg7n16]

See I think you need to learn more about how to determine what a company is worth. IMO you don't know as much about these stocks as you think you do.

What I think happened was, you saw these were the type of companies that you wanted (health and tech) and saw that the price was under a $1 - so you determined that they were cheap (not necessarily true). So you speculated, bought 'cheap' and hoped prices would rise, without investigating much into the actual operations of the companies you were buying.

Sometimes companies issue tons and tons of shares just to make the prices lower, so some investors will think, if it's a low cost per share, it must be a low cost for the company (much like I think you did).

For instance: FNMA - Fannie Mae, is selling for 48 cents a share. But because there are over a billion shares outstanding, the whole company is worth $536 Million.

(and Fannie Mae lost over $6 billion in the past twelve months - so this is not a recommendation)


How I think about stocks: you've got to evaluate the company as though you were evaluating opening a burger franchise. This will be your business. You have tons of options (McDonalds, Burger King, In-N-Out Burger, Wendy's, Whataburger, Sonic, or the fictional Bob's Burgerpalooza)

All the first companies have long track records of profitability, produce their own cashflow, and have fairly predictable income streams to you as an owner.

But Bob's is like these companies you've been buying up: each store has been losing money the past few years, is requiring tons of cash from it's owners, and is selling burgers for less than what they cost to make (negative operating margin).

So how much would you pay to lose money each year?? Bob's only costs less than a $1 a share!

I wouldn't even want to pay $0.10/share for a worthless company.

I would view a purchase of one of the former franchises as an investment, and a purchase of Bob's Burgerpalooza as a pure speculation aka gambling (which there's a place for in your portfolio, but you're doing way too much of it).

SO you should consider the consistently profitable franchises for investments. Now you wouldn't pay $10 million to open a Sonic that's expected to make you $60k/year. That's too high. You would have been able to buy 4% bonds, and make $400k/year. But is $1 million good? That's like a 6% return. Is that enough for you? Maybe, maybe not. If you love Sonic enough and you're passionate about the company, and only expect profits to grow over time, it's probably worth it.

If it only costs $300,000 to open a Sonic that earns $60k year with no work from you, that's probably a great investment! That's a 20% return on your investment.

I think you should look at the return you're expected to get for each share you buy.

(edited to add: just in case I wasn't clear, I view each share like its own franchise. So in my example, 'opening one Sonic franchise' = buying 1 share, or opening a Bob's = buying 1 share. How profitable would 1 share be? If 1 share is profitable, 100 shares will be profitable too. If 1 share isn't profitable, well you get the idea.)


What I feel about gold: it's like you think we're writing off ever investing in gold cause it's a worthless endeavor. I'm writing off investing in gold right now. If gold and silver were selling at/near all time LOWS, this discussion would be much different. Then I could understand the purchase of a lot of precious minerals. Prices would have a higher potential to go UP in that case. But they're not. They're near all time highs.

But because of their commodity nature, I would need it be selling at a pretty low price before I would consider it. Selling around the average isn't good enough (for me).

[97guns]

The controversey around here is always precious metals and I am known as the "silver bug" around here. I moved 1/3rd of my portfolio to SLV back in 2006. I bought in at $13.65 and it was trading around $34.00 the other day.

I have to concede at this point, there is some downside risk of silver at $34.00. Now. . .mind you, I even said that around $26.00 a few months ago. I didn't sell. I didn't buy. I "held". Man. . .my portfolio topped 100K yesterday, again, largely thanks to silver.

Now. . .it's decision time for me. . .my portfolio is now 48% in silver, almost half.

I am turning my eyes to real estate right now and am probably going to really change my portfolio (after all, I hit the 6 figure milestone. . .all or mostly thanks to silver)

i am very bullish on silver as well but only hold it in physical form, my metal portfolio is nearing 70% gains in just 8 months.

my assets are in only 2 classes. real estate at 75% of the portfolio for my passive income and precious metals to preserve wealth. every month for the past 6 months i have been putting all disposable income into PM's.

like i said im a hard asset investor and they dont get harder than these 2.

[jeffmem]

Thanks for all your replies guys.

What kind of real estate are we talking about? Virtual or real? (stocks or real property?) What stocks or funds are you guys looking into now? I was in NNN last year, but it wasn't doing much, it has gone up since I sold it, but I am not sure if I would buy it again or not, thier numbers look good, but the price of the stock is a little too high now.

Scanner, that is impressive! I highly wish I had bought some silver stocks when you did, or even in 2008 or 2009, I just purchased them now, but no one knows what is going to happen in the future. Although neither did you at the time you bought them. Congratulations on getting your portfolio at 100,000, that's impressive. Can I ask you which real estate companies you are looking at? I am glad to hear someone on here though is a fan of silver, that makes me feel better. Do you also own bullion or numismatics? I like how you are thinking. Downside first, upside second, that could potentially help when evaluating new companies. As for Bonds, all of my bonds are old, 90's, getting 4% on some of them right now, I would never buy a bond at this moment.

jpg7n16

What I think happened was, you saw these were the type of companies that you wanted (health and tech) and saw that the price was under a $1 - so you determined that they were cheap (not necessarily true). So you speculated, bought 'cheap' and hoped prices would rise, without investigating much into the actual operations of the companies you were buying.

Half and half. I looked at the companies, they looked good, had analysists saying it was buy time, scout trader was 8-10, articles I read about these companies seemed very positive. So I did my homework, and they looked decent, at least at the time, I have to admit that since I have bought them that perhaps I haven't really followed up with how they were doing, other than looking at the price of the stock. Perhaps all those numbers now have tumbled and it's time to get out while I still have profit inside.

Your analysis is great, investors should consider buying stocks just like how you described, that's a great point.