SINLetter Investment Forums / Getting Started / The First Steps / Getting started with the SIN Model Portfolio / Latest Posts

RE: Getting started with the SIN Model Portfolio

Raja — Thu, 06 Sep 2007 08:35:10 GMT

Thanks a lot, Asif.

By the way, I, like many, am eagerly awaiting your upcoming monthly newsletter. Your writings are quite thorough and often educational -- especially for the lay investor.

RE: Getting started with the SIN Model Portfolio

sinnerMan — Tue, 04 Sep 2007 12:37:00 GMT

Here are four ETFs that I currently like,

1. The water ETF PowerShares Water Resources Portfolio (PHO).

2. The alternative energy ETF PowerShares Wilder Clean Energy Portfolio (PBW).

3. The PowerShares Value Line Timeliness Select Portfolio (PIV).

[url=http://www.sinletter.com/blogComment.aspx?id=2]http://www.sinletter.com/blogComment.aspx?id=2[/url]

4. And the WisdomTree International Real Estate Fund (DRW). Even though this is a well diversified international ETF, I would wait on this one until the real estate mess subsides a little.

RE: Getting started with the SIN Model Portfolio

Raja — Tue, 04 Sep 2007 12:18:39 GMT

Thanks a bunch for the insightful reply, Asif. Following up on your reply, I have to ask if you can recommend any ETFs and/or MFs from which the SINL forum could benefit. Again, thanks.

RE: Getting started with the SIN Model Portfolio

sinnerMan — Tue, 04 Sep 2007 10:32:30 GMT

Hi Raja,

I wanted to respond to your questions earlier but this weekend was downright crazy and I was not able to devote much time to writing.

Instead of switching your IRA exclusively to SINLetter stocks, I would suggest using a combination of stocks, Exchange Traded Funds (ETFs) and mutual funds to build a diversified portfolio. Your specific questions are answered below,

1. Ideally a new investor should start up adding new positions based on their research of the monthly picks in future newsletters. You can add positions slowly to get to about 20 to 30 individual stocks. After 20 stocks, the benefits of diversification taper off but this only holds true if all 20 stocks are from different sectors/market caps. Since I mostly concentrate on the tech sector, my personal goal is 30 individual stocks.

2. I have mixed feelings about dollar cost averaging into individual stocks. I use a discount broker like Ameritrade Izone ($5 per trade) to minimize my trading costs. If you have more than $25,000 across accounts, use the free trades provided by Bank of America and Wells Fargo to minimize the cost of dollar cost averaging.

3. At this point, I would stay away from the small caps, financials and select consumer non-durables. A better way for me to answer your question would be to mention the stocks that I like the most from the model portfolio right now. I currently like Gymboree (GYMB), Procter & Gamble (PG), Unilever (UL), Blockbuster (BBI), ICON plc (ICLR) and Tata Motors (TTM).

Check out these tutorials from the Chicago Board Options Exchange (CBOE) for an excellent introduction to Options. They even ask you to answer questions at the end of each tutorial.

http://www.cboe.com/LearnCenter/Tutorials.aspx

The Indian stock market seems to be range bound over the last few months with huge swings in both directions. There is little doubt about the long-term prospects of the Indian stock market but I find it extremely speculative at this point. Hence my only positions are Tata Motors (TTM) and a tiny position in Wipro (WIT).

Getting started with the SIN Model Portfolio

Raja — Fri, 31 Aug 2007 11:47:11 GMT

Dear Asif:

Many thanks for helping people like me get started (and educated in this field).

I am an average investor with modest mutual fund investments in 401k and IRA. I have never owned any individual company stocks. I am, however, planning on following the SIN Model Portfolio in near future using my IRA funds. Following are my questions, given my situation. Hope you don't find them unreasonable.:w00t:

1. There are currently 21 positions (incl. options) in the SIN Model Portfolio. How should a new, average investor get started and migrate from 0 to 21 positions, given that it is a "Portfolio"? :ermm:

2. Once that is accomplished, what is the best (and a cost-effective) course of action to dollar-cost-average additional monthly contributions to the portfolio? I would like to stay away from investing in one or two stocks at a time, as it does not provide the diversity a portfolio does.;)

3. Which of the 21 positions do not hold as much promise presently, as they did when they were initially added to the portfolio? Given the budget, can one eliminate those stocks and still maintain reasonable diversity?:unsure:

Would appreciate it if you can suggest a site that has an Options-101 course with easy-to-understand examples. Seems like a somewhat complicated topic to understand!:crazy:

Separately from the above, I am curious about your take on the current Indian Stock Market. Don't you think a serious correction is overdue?:exclamationmark:

Again, thanks. ...And try to have a non laborious Labor Day Weekend -- but looking at your newsletters and blogs, something tells me that you won't!:)