Words of Wisdom from my man Timmy...
"Sometimes, when it comes to diversification, people want to adopt the Noah’s Arc approach and own a little of each sector. That is not how diversification should be practiced because all sectors of the economy are not equal when it comes to creating long-term wealth. There is a hierarchy. The sectors that have historically beaten the market are tobacco, electric utilities, chemicals and healthcare, food, and railroads. The sectors that have underperformed the S&P 500, but generally hold pace with the market as a whole, are: household goods, telecommunications, industrials, and non-electric utilities. The sectors that trail the S&P 500 by a sizable gap are: paper, steel, textiles, and shipbuilding."
It’s far better to go through life with a collection of healthcare stocks, food stocks, energy companies, utilities, an occasional tobacco investment, a telecom or two, and a few niche companies like Disney, Visa, Tiffany, and Nike rather than thinking you have an obligation to own every sector of the economy in your portfolio. The long-term records are so divergent that the difference between the cluster of best sectors will give you a much better lifestyle than what you’d get making investments in the worst sectors. Over long enough periods of time, it eventually makes a $1.9995 billion difference
New post on: The Financial Home Of Tim McAleenan Jr.
Amen....tb
Comments
the Pudd
If you want to have all Asia (for example) and have a thesis as to why, that's fine, just be prepared to stick with it because there's going to be periods where it will underperform or just not do well. If you want to be in all high dividend stocks, fine, but just be prepared for times where that's out of favor (although at least with that you'll be collecting dividends.)
---Ya mean, this limit applies to "cut and paste", too ???
Or is "govenor" a better word, versus limit???
Nah, govenor applies to motors and is probably not the proper use of the word for writing applications.
I just don't know.
I have to leave the area now, to install a port hole in a bass drum.
But if you are conditioned to links that's ok....
John wins the spelling Bee...good work
Guggenheim Investments seems to be the one who has the most equal weighted etfs, there are 14 of them. I have RHS, which is beating the my other consumer staple etf XLP 6 of the last 9 years. There are more than a few equal weighted indexes that beat the market weighted ones, they are the most basic of the smart betas etfs. But most of my equity portion is still in managed funds.
Regards,
Ted
I kind of like the typo arc as the course, not the vessel.