Portfolio One is our longest lived portfolio. It began right after 9/11 and thus has been through twelve years. The beneficiary has invested $6,000 and the trustee has invested $13,500, for a total of $19,500. The current value in $33,161 for a gain of $13,661 or 70% in total, which works out to approximately 8% / year. You can see the detail behind this portfolio here or at the link on the right side of the page.
In rough terms if you have a more than 10 or so stocks you have a diversified portfolio (assuming of course that the stocks represent different sectors, market cap, and even countries) and there are 20 stocks in this portfolio, with an average value of around $1600 or so, and I would say that this portfolio is pretty diversified. About half the stocks are non-US (and the US stock Philip Morris is all overseas) and thus the benchmark would be about half the S&P 500 and half an international index of developed countries not including the US.
On the downside, we are watching Urban Outfitters which moved above our purchase price (finally) and which we are not riding back down. There is a stop loss order in for this that we will continue to renew (it only goes out for 90 days at a time).
We also are looking at stocks which may have reached their apex or might be on the verge of being over valued. The current stage of the bull market seems frothy and since we are long term investors we aren’t inclined to immediately sell but we may put in some stop loss orders to prevent some stocks that have risen a great deal from coming down too far. We are less inclined to sell a stock with a high dividend because it will continue to pay out than a stock which has risen a great deal but has no dividend. For now there won’t be any stop orders placed but we will watch stocks like EBAY and Taiwan Semiconductor which have had a great run for us.
As far as stocks we sold in the past, Amazon continues on its tear because it stands alone as a stock that has no profits for investors yet continues to soar and sports an enormous market capitalization. I have literally no answer for this phenomenon.
Microsoft, which we sold a few years ago, increased from the sale price of $25 in 2010 to $37 today. A lot of this gain is because their lunk-headed CEO Ballmer is finally leaving… since he retained his stock the day he announced his departure, the stock soared, and he made himself an extra billion dollars just for firing himself. Now that is surreal.
In general this portfolio is doing well and hope to keep it rolling another twelve years!