One of the main disadvantages to portfolio management for working people is absenteeism.
The duties of work occupy our time at work and the duties of hearth and home occupy our time away from work, leaving little time for portfolio management.
For a very long time, I have said that until a person has at least $250K in savings, individual equities should not even be considered as an investment vehicle.
I was at an investment seminar some years back and spoke to this belief. It was not a popular position then, and for many money managers it is not a popular position today.
The reason of course is because that means that working class investors can simply put their money in an index or mutual fund and forget about it for the next 20 years.
There are many money managers that don't want to hear advise like that because they make little to no commissions from those sorts of investments.
But the smart money managers, the ones with your long-term savings interest at heart, will tell you two things.
First they will tell you that the way to accumulate wealth is through regular savings. Every time you get paid put a percentage into savings, just as if it were a bill that has to be paid.
The second thing they will tell you is to invest in an index fund or some sort of balanced mutual fund and forget about individual equities until you have a large enough nest egg to create a diversified equity portfolio.
It's the diversified portfolio part that comes to my mind when I tell folks go save $250K and we can talk.
Managing your own individual equity portfolio is not as easy as anyone that has been following these posts can attest to.
As I noted earlier, work, and hearth and home take up almost all of my time, making me pretty much an absentee portfolio manager.
Because of my absenteeism, I simply don't get to research stocks the way I should. And as you will see, that can be a problem.
Hi. My name is Wax, and I am an individual investor, a working class investor, just trying to do the best I can in a world that was never intended for investors like me.
Every week (or so) in this space I let the world see how I am managing the The Wax Ink Portfolio, and I do so in hopes of helping other working class investors avoid the investing pitfalls that found me when I was starting on my investing journey.
Markets
The Wax Ink Portfolio closed down 2.3% for the week. By comparison the Dow was down 2.1%, the Nasdaq was down 2.7%, the S&P 500 was down 2.1%, and the Russell 2000 was down 3.2%.
The Volatility Index, commonly known as the VIX, was the big winner for the week, closing closed at 14.97, up 24.1%. The VIX is now down only 1.8% for the year.
Year to date, the Wax Ink portfolio is up 0.1% while the Dow is up 11.0%, the Nasdaq is up 6.2%, the S&P 500 is up 9.0% and the Russell 2000 is up 7.4%.
Breakdown
The portfolio breakdown remains the same, with 70% of the portfolio in equities, 30% of the portfolio in cash, and 0% of the portfolio in bonds.
Research
It has been a busy period for the research list. The last time I posted, there were 24 companies on the research list. Today there are 23, so a loss of one more company.
The problem with a research list, or as many people call it, a watch list, is that you have a tendency to add stocks to the list for no clear investment reason. Before you realize it, you have a bunch of stocks on a list that really don't mean anything.
For the stocks I have removed from the research list, I went through and ran or re-ran worksheets for each company. In addition, I spent some time understanding how they make their money.
In the end, the stocks I dumped held no investment interest for me. In other words I did not believe they would help the portfolio over the next five years.
I apologize for taking so long to work through the list, but as I note often…life always seems to get in the way.
Holdings
This week's moving on up stocks were refiner Holly Frontier Corporation (NYSE: HFC), up 7%, rubber and plastics container maker Myers Industries, Inc. (NYSE: MYE), up 6%, and specialty chemicals company W.R. Grace and Company, Inc. (NYSE: GRA), up 2%.
This week's turd in the bunch bowl stocks were industrial constructor Layne Christensen Company (Nasdaq: LAYN), down 13%, aircraft repair company AAR Corporation (NYSE: AIR), down 8%, and mega colossal company General Electric (NYSE: GE), down 7%.
Not Performing
The top non-performers remain communications equipment company Tellabs, Inc. (Nasdaq: TLAB), down 64% since being added, Cliffs Natural Resources, Inc. (NYSE: CLF), down 48% since being added, garage door/telephone headset maker Griffon Corporation (NYSE: GFF), down 43% since being added, government contractor SAIC, Inc. (NYSE: SAI), down 28% since being added, and ultra capacitor maker Maxwell Technologies, Inc. (Nasdaq: MXWL), down 27% since added.
Wax
Wax Ink is a baseline equity research company comprised of individual investors NOT licensed or registered with ANY government agency. Always obtain the advice of a registered investment professional BEFORE believing any information contained herein.