My Personal Finance Journey

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Portfolio Update - September 2007 (Up 3.75%)

Contributed by mm | October 1, 2007 9:12 PM PST

SUMMARY

After Fed decisively acted to cut rates, the general market is recovering from the turbulent July and August. This lifts all boats, and helped my portfolio to book a record-beating 3.75% monthly gain. For the first time, my actively managed portfolio (excluding employee stock option account), has more than $800,000 in assets.

My portfolio performance is in line with the benchmark for the month. Year-to-date, my portfolio index has gained 10.1%, compared to 9.6% in 50-35-15 benchmark and 8.9% in 45-30-25 benchmark. Overall, I'm satisfied of the portfolio's performance.

TRANSACTIONS

I completed two transactions this month. First, I sold about a third of my energy holding ConocoPhillips (COP) at $86.05 after it broke my earlier target price of $85. While oil price has been breaking all-time record throughout the month, most of the climb is due to the weakening dollar. Also, I feel I'm a bit over-weighted with this single issue representing more than 6% of my portfolio. New target price is set to $90 for the rest of the shares, though.

On the other hand, I am happy to be able to acquire more shares of the insurance broker Marsh & McLennan Companies Inc (MMC) at $24.71, or 15% discount off my initial purchase price of $29.27 back in February. The stock is obvious weak for the time being, but by reading more analysis reports and its financial filings, I do believe a turnaround story is developing. I have quite some success in the past by betting on recovery of distressed industry heavyweights, including (Cigna, Sears, Altria, R.J. Reynolds and Coca-Cola), and I am expecting the same thing to happen again here. MMC is trading at 14 times forward earnings and bears an impressive 3% dividend.

NEXT STEPS

There are a couple of loose ends I expect to tighten in the next 30 to 60 days. First, domestic equity has been under-represented in my portfolio for quite some time compared to benchmark portfolio, and with more money coming from our tireless savings engine, I need to think hard to deploy them to new opportunities.

Second, I just received notice form our benefits department that one foreign equity fund (namely Fidelity Overseas, FOSFX) will be replaced by a new investment vehicle soon. I need to read the change announcement documents and research my options.

portfolio-200709.jpg

This Post Has Received 6 Comments. Share Your Opinions Too.


SingleGuyMoney Commented on October 2, 2007

That is a pretty balanced portfolio. How long did it take you to construct it?


jack Commented on October 3, 2007

I too am buying more MMC. Could you please identify the software you use to track your portfolio? Thank you and please keep working on the blog.


Financialchoices Commented on October 7, 2007

Very encouraging! You must be excited as you are getting so close to your goal. I am also encouraged because I own some of the same mutual funds in my portfolio. You have enjoyed much professional success at work. I would enjoy a post about “doing well at the work place while completely focused on getting out of the workplace” something like that…


Rob Commented on October 14, 2007

This looks like a nice portfolio but I'm curious about cash/fixed income. Is it in a savings account or do you have some bond exposure? Just curious what your ROI on uninvested cash. Personally, I've found some of the online banks to offer savings around 5.05 annually which is pretty nice. And you can usually achieve 6.0 or higher easy with corporate bonds.


MM Commented on October 14, 2007

Rob, most of the monthly I clear 0.4% for my cash positions (i.e. ~5% on an annual basis) but I didn't do well on September as I'm moving some cash to China where I need to pay daily bills.


jack Commented on October 23, 2007

Do you have an estimated time table for the expected MMC turnaround? Could you share the basis for why you believe a turnaround will occur? Thank you for your comments.


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