Diversified Stock Competition: Good luck and enjoy the games!
We can refer to this friendly competition with three portfolios akin to the road to the World Series. A lot can happen in two weeks. Teddy cannot be held responsible for these Dailey Dozen lists of three diversified portfolios… it was my own doing.
What happened is that we took twelve industrial sectors to spread the financial risk and found three to five stocks within each sector that outperformed Friday the 15th’s market indexes. If I had a spare $50,000, I would have invested in all three.
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It is a great risk management strategy to have a diversified securities portfolio. Instead of choosing just one, we have three competing lists with a dozen different stocks in each.
Fifteen thousand dollars of funny money was invested in each of the three portfolios and about $1,200 was set-aside for each of the twelve securities.
Thus the risk of the $15,000 worth of investments is spread across 12 sectors: Hi-Tech, Bio-Tech, China-Tech/Agriculture, Petrochemical, Alternative Energy, Precious Metals, Retail Sector, Computer Security, Real Estate Investment Trusts, Banking and Finance, Sports and Recreation Apparel, and Consumer Foods.
We’ll be closely tracking developments. It is interesting to note that not all financial institutions faired as poorly as the big banks with the widespread fear about mortgages. Smaller banks like BBXT, BOH, and HRS actually outperformed the market indexes.
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