Saturday, December 13, 2008

Sector Distribution

Now, I want a good diversity of stocks, so that no one sector bubble kills me. I also want to focus in on sectors that took a beating and I think will recover. Out of my butt, essentially, I shall pull the following initial weightings, which will probably be readjusted to something more balanced later.

16% Oil stocks: what can I say, I believe in peak oil...
8% Utilities: these seem solid and stable
8% Conglomerates: seem stable? Sometimes. GE is a bit shaky atm...
12% Real Estate: I think that the housing bubble might have popped a bit too much
14% Financial stocks: lets face it, they had the stuffing beat out of them, but lots will live, and hopeful I can pick them
16% Shipping: when the economy recovers, shipping will, and they pay good dividends (when they don't cut them :( ) I may cut this back if I can't find enough stable companies with good long contracts.
8% Pharma: Seems stable with reasonable yields
8% Raw Materials: Sort of beaten down, but since it doesn't yield much I'll weight it lower
10% Staples: Heavier weighting just because it's stable.

So, we have a million to start, and lets call each stock position about 10k-20k, so one stock per percent or two, hopefully I'll end up with 60 or 80 companies.

Did I miss an important sector? If so yell at me please.

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