Retooling my portfolio
After a conversation with my friend and fellow intelligent investor Harry, I’ve realized that I am not diversified at all, and it wasn’t even close. Of the 6 stocks I owned: EP, NBR and FRO are correlated as are MTW and CMCO. Why I didn’t realized I had no idea I just must have missed this fact; so when I look at my portfolio and noticed that I have massive downswings compared to the price of Oil, this is the reason why.
The companies that I chose were all good companies, I just wasn’t diversified and it is my own fault for such negligence. So, I’ve been looking for good times to sell 3 of the above 5 stocks in order to diversify myself. I found a good time for CMCO, as it rallied big the other day when the Market had a nice upswing and it took CMCO up over 5% to go with it. I sold it for only a small loss of $40 (2% ish) and enjoyed the extra cash.
I sold EP and NBR today as it looks like oil and natural gas continue to fall. I knew I should have sold these stocks a few weeks ago but for some reason I just continued to think that they wouldn’t fall as much as they did. My once 30 % gains in each turned into losses for each stock; I should have listened to Cramer! But, I live and learn and hopefully don’t make the same mistakes.
I’m going to have to do some more research but I’m going to look into a Healthcare and a Financial, while keeping my FRO, MTW, and MMM positions. I put an order to buy the Gold ETF today symbol GLD, only about 13 shares at a price of $84, as it is trading at near its low for the past few months and I’ve been keeping track of that trend. I plan on selling it when it gets back up to $92 or so as I know that is going to go back up, it always does.
