In a prior blog post, I discussed the fact that I had made a sweeping overhaul of our investment portfolio for two reasons:  the uncertainty that Donald Trump will act rationally, both with regard to the economy and to other policy areas; and the fact that I need to simplify our portfolio, so that my Wife )nd our Daughter) will become more involved.  That’s just common Estate Planning sense!  That post is as follows:

I specifically cited the fact that I had dumped all of our Apple, Inc. (25% of our portfolio); but, that’s not because of the company, per se.   I believe that it is still excellent, which is well-managed.  In fact, I might even buy some back someday.  As the largest corporation on earth, however, and the fact that its iPhones are assembled (but not manufactured) in China, it might be Public Corporate Enemy #1, should Trump  continue to act like an unstable spoiled brat!

I will go into more detail, describing why I decided to simplify our portfolio, in a follow-up post,  Now, I don’t intend to go anywhere, so you will have many more blog posts to delete, for years to come.   But, that is why I went outside of my normal portfolio method of operation.  As I suggested when I began this blog, from time-to-time, I will write about life and career changes, that are best planned for—before, rather than after, they occur.

I actually reached my Eureka Moment on November 14, and downsized our portfolio, based on Asset Class switches, as follows:  Individual Stocks from 42%, down to 16%; ETFs (exchange-traded funds) from 18%, increased to 33%; Mutual Funds remained even, from 37% to 34%’ and Cash increased from 6% to 16% (plus, we have a little more outside).  The number of individual stocks dropped from around ten to four; however, the ETFs (still) are mainly replicates of major stock indices (i.e., DJIA, S&P 500, Russell 2000) and a few Sector SPDR ETFs to enhance specific sectors, such as Energy, Technology and Utilities.  So stocks did’t really decline, they are now just more diversified.

I kept four individual stocks; however, I am not recommending that you invest in them.  Rather, I wish to give you a little flavor of how I make my investment decisions:

Aetna:  provides health care insurance.  This is the whimsical one, in that its hard to tell how it will fair in a Trump World; so, the amount invested is minor.  AET has performed well, as the Affordable Care Act (”Obamacare” to GOPers), as some 25 million more Americans now have health insurance.  Under Trump,  even he doesn’t know what he will do,  So, Aetna may benefit with less customers, but paying higher prices under Trump-O-Mania.

IBM:  Contrary to popular belief, IBM’s major revenue service is IT Solutions, rather than focusing on hardware or software.  Feel companies can compete with the fact that it can provide global quality service in more than 150 countries around the world.   Many corporate IT chiefs prefer its global reach.

ITW:  Illinois Tool Works is composed of independently operated industrial tool-shops in 52 countries around the world.  The independence enables it to modify its operation to the needs of its local corporate customers.

UTX:  Serves industrial and government customers as a (number one-or-two) market leader in four distinct areas:  Otis Elevators; Carrier Heating and Cooling; Pratt & Whitney and Aerospace.  Such diversification, by product and type of client provides stability.

Several people have asked what I did with our money when I bailed-out of Apple, both in comments on the blog and personal Emails.  Let me add that:  when the Economy went through a major melt-down in 2008, and the Dow Jones stock index dropped from 14,000 to 6,500 within 18 months, we road it out, fully invested, but with a few “tweaks”,  And that was with three-to-four years until retirement!  But, seven months before I retired. I decided to add about 25% in a global bond portfolio.  And this re-shuffling now is partially a follow-on to that.  Hopefully, I’ll get the conclusion written by tomorrow.


, , , ,

  1. #1 by cheekos on December 21, 2016 - 4:03 PM

    Welcome to our blog visitors from Serbia!

  2. #2 by David Shahrestani on December 21, 2016 - 10:01 PM

    Hi cheekos, great post. ITW is great company that I’ve been looking at for awhile but never pulled the trigger on. To my hindrance, I’ve never been able to comfortably incorporate a “Great Business” premium into my valuations.

    As for the macro Trump stuff, I have had difficulty coming up with a useful model for his governing style. The market is obviously going with the “He doesn’t mean what he says” model. I think they mainly subscribe to the Adam Scott “Think past the sale” argument ( When Trump starts negotiations at we will build a wall and Mexico will pay for it, he is aiming to settle at enforcing immigration laws. When he starts negotiations at we are going to tax Chinese imports 40%, he is aiming to settle at a freer floating exchange rate.

    Of course, this could also just be people projecting what they what to be going on in Trumps head. The market is notorious for being too optimistic at exactly the wrong time. I live in California, so I get plenty of the other argument too, that the world is about to end.

    I think Ray Dalio got it right this week when he said the Trump administration will either be aggressive and thoughtful or aggressive and reckless, but either way, they are going to be aggressive ( It’s hard to say what will happen next, but it definitely won’t be boring.

    • #3 by cheekos on December 21, 2016 - 11:03 PM

      David, Trump is in over-his-head. Remember too that, his mind cannot stay engaged beyond 144 characters.

      President Lincoln is said to have claimed: Keep your friends close, and your enemies even closer. Well, during the second Debate, I thought that Donald outdid himself in demonstrating how asinine he can be. That’s when he suggested that China should invade North Korea. Now, wouldn’t that be friendly: having China and the U. S. face-off across the 2 1/2 mile wide DMZ.

      Earth to Donald: In the Nuclear Age, 2 1/2 miles is the same as sitting in the same foxhole!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: