Wow I now have color in my blog!
I know my blog is pretty boring to look at. I'm working on it, but unfortunately I'm not very creative or gifted at designing websites. If anyone has an idea to make this better, let me know.
Looking at the sector breakdown in my portfolio, you can see it's very defensive. I'm way overweight consumer staples and also heavy on utilities and energy. I vastly underweight tech stocks and also go light on consumer discretionary and financials. It never occured to me I was actually overweight in the industrial sector, I will have to keep that in mind for the future. The materials sector is noticably absent in my portfolio, I plan to to remedy that situation sometime this year.
I never expect or even want to match the stock market in weightings. I just use it as a reference point. The distribution of quality dividend growth stocks favors some sectors more than others. It would be hard to find a bunch of tech stocks that meet my investing criteria, while it's a piece of cake in consumer goods.
Thanks Austinbroker. I stole the pie chart idea from you.
I didn't realize how overweight I was in a couple of sectors until I made the pie chart. It's a great visual reference to see your sector makeup.
ReplyDeleteI like the charts, what program do you use to make them? I was also wondering if the chart that says stock market was the s&p 500?
I made the charts in google documents, saved it as a jpeg and then added it as a picture. It will be tedious to update this is every month, but I think I'll give it a go. I'll come up with a way to automate it, it can't be that hard. The Stock Market chart used numbers from Fidelity. Fidelity uses the S&P 1500 as the benchmark.
DeleteI know of a couple different schemes to categorize stocks into sectors, I use what Fidelity uses since they are my broker. For example there is no services or transportation sectors. Transportation companies are part of the industrials sector in the convention I use. So NSC and EIFZF are both industrials. EIFZF is definitely the oddball stock in my portfolio, but it has been a great investment thus far. They own regional Canadian airlines, helicoptor services, and also manufacturing companies. It's a weird one, no doubt.
Nice pie chart. I'm also overweight in some sectors and underweight in others -- in fact, I don't even own any tech, financial, or utility stocks. I basically choose to own the stocks that I consider to be good long-term investments, without caring about whether my portfolio matches the sector weights of the S&P 500 or some other index.
ReplyDeleteActually that makes sense to a certain extent. Why should it matter what sector a stock is in? If it's a great company trading at an attractive price, who cares if it makes you overweight in a certain sector. At the same time I want my portfolio to be balanced or else I'd own 75% consumer staples. Keeping a balanced portfolio it just a way to reduce risk. We don't know for sure what the future holds. Not saying I'm trying to match the market because I'm not. The main thing for me is avoiding companies just for the sake of diversification. They have to be a good investment on their own merits.
DeleteLike Deedubs, I am not that concerned about sectors. Personally, I wouldnt worry about being overweight in utilities, as you stated in your article, because I still think utilities are a great place to be right now...good dividends, steady, predictable businesses, regulated(should read protected) by the government...they are basically mini-monopolies in their geographical area, I mean, if you dont like your electric bill, you cant easily get your power from somebody else can you? Thats the definition of a monopoly. But, I agree it is a good thing to keep an eye on sectors just to make sure you arent TOO overweight in any one company or sector.
ReplyDelete