What do you think? If holdings include preferred, micro, long-term and short-term, can this portfolio be balanced?
What do you think about these portfolio allocation goals for someone with a very long time horizon and a total annual return of 2+% above SPY? Assume that less tax efficient issues are held in tax-deferred or non-taxable accounts.
A) 20% preferred stock position – 5 – 10 issues - learning
B) 20% - 40% micro and small cap stocks – 10 to 20 issues
C) 20% - 40% stocks for long-term holding – these can be significantly overweight
D) 20% cash and/or deep value stocks for flipping* – these can be overweight too
Some examples from each category
A) recently bought WLFCP and HIGpA in non-taxable account and BMLpQ and JPMpI in taxable accounts
B) bought some REX, VOXX and MIND recently
C) bought CMG after its most recent earnings report – long-term hold in taxable account, bought some SBUX in dividend accumulating taxable account and also in my non-taxable account, TOT
D) bought CMG after its most recent earnings report, sold it the other day in my non-taxable account
* I never let myself feel guilty about selling a winner when it is in this category. The purpose, when it is in this section of my portfolio, is to make me quick money and get out of my portfolio. If it suddenly goes up 10% - 25%, I might just sell, even if it looks like it is still worth more than what I sold it for. At that point there are probably more attractive bargains available.
I am currently debating GMCR in this category. It has gone up significantly from my buy point and I am trying to decide if it will be just greed that makes me choose to hold after this weekend or if I am really moving that position into the longer-term portion of my portfolio. It still looks like a tremendous bargain to me. But I bought it as an extreme value situation, so I give my self permission to go either way with it. What do you think?