Regrets, I’ve had a few But then again, too few to mention

The above quote from the “ole Blue Eyes” song sums up my thoughts on the Miley Growth Fund and the Miley Income Fund.  On the Growth Fund, I have regretted recommending BABA and VIPS – the performance of the fund would have been a lot better without them.  But as I mentioned, I think that the Chinese government will eventually come to its senses (and the stocks are improving a bit today).  It also illustrates the fact that diversification lessens the impact of bad choices like BABA and VIPS.  As for the other stocks in the growth fund, notice that my confidence in NFLX has been rewarded – the stock is rebounding today.  I may make some adjustments to the fund in January on the fund’s year anniversary, but for now stay the course with all of the stocks in the fund.


On the Miley Income Fund, I am only worried a bit about Western Union (WU).  I may jettison it, but again, for now, stay the course.  As for the other stocks with negative performance  (Merck (MRK) and Cardinal Health (CAH)), I see no reason to sell them – just sit back and collect their dividends.


As for investing in general, for younger investors, I am with Jim Cramer:  your first task is to get rid of high interest debt like credit cards.  Even those with great credit are charged at least 12% (a great deal for banks but not for their customers!).  After getting rid of debt, building a retirement portfolio in an S&P 500 index fund should be the first step before investing in individual stocks.  For asset allocation, I recommend a portfolio of 90% in an index fund and 10% in cash – then you will have cash to invest in dips in the stock market.  While I don’t believe in excessive trading, to me it makes good sense to “buy the dips” – especially if you have a very term long time horizon.  While dollar cost averaging is great in an IRA or 401k (and I certainly advocate that!), I think boosting stock purchases in downturns using free cash will produce better results than static contributions.  If you are making regular contributions, your cash balance will be eventually be replenished and you will be ready to buy the next dip.  For those unwilling or unable to follow this strategy, are under 40, and can tolerate market  fluctuations, I see no reason to hold cash or bonds in an IRA or 401k portfolio – I would allocate 100% to stocks.  If an investor is under 40 and more conservative, I would use the 120 rule, i.e. subtract your age from 120 to get your stock allocation and put the remainder in bonds and/or cash.  For the cash or bond portion, if your 401k has a stable bond fund, I would use that – they are guaranteed insurance contracts that pay a lot more than money markets or treasuries.  If an investor is over 40, it is time to get a bit more conservative – use the 120 rule that I just stated.  These are of course, my recommendations, you should evaluate your own situation and take action as you see fit.  And remember, you know what they say about free advice…


Well, that is about all for now.  I need to go back to listening to the “Chairman of the Board”.





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