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Seven Investment Types M* Portfolio Strategist Does Not Own

Observant1
edited December 23 in Other Investing
"As someone who writes about building portfolios for a living, I do research on many types of investments,
ranging from tried-and-true core holdings to more esoteric corners of the investment world.
A key part of my job is to comb through the available evidence and help readers understand the pros and cons
of various investment types for their own portfolios."

"But what do I actually do with my own money?
Here, I’ll discuss seven popular investment types that I’ve decided to take a pass on.
I’ll also discuss the rationale behind my decisions."

https://www.morningstar.com/portfolios/7-things-i-dont-own-my-portfolio-2

Comments

  • Old_JoeOld_Joe
    Interesting.
  • MarkMark
    Well, I don't own any I-Bonds and I'm not compelled to ditch the others mentioned based on this report. The author seems to lean toward Capital Appreciation focused positions which might be appropriate over an investment journey but maybe not so much for those who are more focused on Capital Preservation. To each their own.
  • WABACWABAC
    Never understood the fascination with alts. But, whatever helps you sleep at night is what it's all about.
  • Observant1
    edited December 24
    I'm in general agreement with the author regarding the exclusion of certain investment types.¹
    My portfolio does not include the following investments:
    1) Dedicated REITs
    2) Sector funds
    3) Alternative investments
    4) Dedicated high-yield bond funds (my multi-sector & nontraditional bond funds can hold HY)
    5) Gold bullion or dedicated gold funds

    Unlike the author, most of my funds are actively managed and I own a chunk of I Bonds.



    ¹ I reserve the right to change my mind about investment exclusions at any time! ;-)
  • MarkMark
    edited December 24
    Sure, I can see excluding certain investment types, just not the ones listed in this article. Not to disparage anyone but I think one can be selective and do well.

    1. Dedicated REIT. I own 'O' Realty Income. First bought in 2009 @ $22/share, added to in 2013 @ $38. It's been paying me a steady 5-6% yearly in dividends since the beginning.
    2. Sector funds - FSPTX and/or FSELX over a similar time period.
    3. Alts - QLENX currently. I would concur that there are a lot of mushy apples in that barrel but not all. I use it as a hopeful hedge against a full blown correction.
    4. Gold - Again off and on I hold a small pot between 3-5% of my total portfolio in either mutual funds, mining stocks or physical specimens following Rono in that regard. My current position is in IAUI.
  • larryB
    Wasn’t M* established as a service to enlighten its users on finding the best actively managed mutual funds? If the whole fund biz had been entirely index funds where would the author be employed?
  • stayCalm
    edited December 24
    Interesting indeed for a M* employee to publish this and for M* to post this on their site. Note the date cherry picking across the different asset classes -- 10/15/20 years

    Two points
    - Bug looking for a windshield
    - Data torture will produce whatever one desires.
  • WABACWABAC
    How many of us would even visit the place if it wasn't for the portfolio and watch-list features? Well, maybe the daily market style-box would get a glance.
  • hank
    edited December 24
    Article length too short to allow a really deep dive into any single area. Is "does not own" same as "has never owned"? Doubt that. Perhaps this is intended as some type of disclaimer since she's a M* employee and feels a need to come clean ...

    I haven't owned any gold / miners funds the last couple years, and prior to that in only small quantities. (She doesn't own any). Not something I'd care to brag about as it has trounced everything else I know of for the past 3 years.

    Alternatives get beaten up a lot. Such a wide and hard to define area. I'd say 80-90% not worth owning. But if very old and very risk averse there are some decent L/S funds that could possibly keep you from getting completely taken to the cleaners in a market wipe out. I don't think M* includes those under alternative in their schematics.

    Thanks for posting @Observant1
  • rforno
    Meh.

    I own a slug of OHI as a REIT, and am considering GTY and some specialized ones at some point once my tax situation changes.

    I'm ok with sector funds if you know what they own, watch them, and don't just blindly jump into them. (to wit: I have EUAD as a 'sector fund' for European defense and aerospace.)

    Alts I won't touch with a bargepole.

    I don't own gold, but in recent months I've been auto-throwing $200 into BTC every payday as an experiment.

    Otherwise, across portfolios, I'm still like 85% in stocks. The only FI I have is in PRWCX and a Franklin tax-free fund that my parents setup for me back in the '80s.
  • InformalEconomist
    It's weak filler.
    Editor’s Note: A version of this article was published Nov. 25, 2024.
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