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JBR101 (< 20)

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Advice for a Fool

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September 30, 2012 – Comments (3)

I've owned one stock (ACE Ltd) since 2004 and have watched a steady climb with the benefits of dividends which have been consistently reinvested.  YTD the stock is +7.82%.  The Friday close was 75.70 and the 52 week performance at 56.90 low and 77.85 high.  The forecast for this stock is 93 high and 73 low with median forcast being 84.50.  The MDP performance is +1.7% YTD.  Knowing that a good investment strategy is investing in quality stocks and portfolio diversification...my cold feet just can't seem to get warm trading a stock that has performed consistently to invest in a portfolio that hasn't met the same performance standard.  Also thinking of signing up for the Deep Value portfolio. What's a fool to do? 

3 Comments – Post Your Own

#1) On October 01, 2012 at 12:41 AM, awallejr (79.94) wrote:

I dunno about cold feet there.  You held this stock for 8 years now.  Even through one of the worse recessions in history.  What could possibly be concerning you at this point?  Just put a stop loss if you think it will some how tank.

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#2) On October 01, 2012 at 12:55 AM, MegaShort (99.95) wrote:

ACE is an above average insurer and trades at 1.2x tangible book. It looks like an OK investment to me, but a single stock portfolio doesn't make sense for most people. I hope you also have other other retirement savings besides ACE?

In my opinion your best bet for diversification is index funds, unless you are willing to invest a lot of time into actively investing (reading value investing books, reading financial statements, etc.) Of course you can keep a couple of positions like ACE along with index funds if you want to approach them as a hobby.

If you're looking for an alternative insurer to ACE, check out RGA. I think it's a similar quality company, but it trades at 0.7x TBV instead of 1.2x TBV. 

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#3) On October 01, 2012 at 1:00 AM, MegaShort (99.95) wrote:

Or maybe I misunderstood your first sentence and you own more than one stock.

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