I Am a 14 year old investe. HERES MY PORFOLIO. what do you guys think I should change? THanks?

Question

Hello everyone my porfolio is down 500.00 today. I think everyones is! I love getting the dividends from these high yeild stocks. HJHO i am going to sell when it goes above my purchase price, and my broker friend told me to buy lpad.

Any changes etc? Should i put all the money in a mutual fund? ( in a mutual fund does the net expense ratio charge you for the money you made that year in the fund, or the total amount of money you have in the fund?)

Thanks everyone

MBI

Buy / Sell 62 $8.80 8.75 $555.59 $542.50 -2.36% -$13.09 Edit

BAC

Buy / Sell 17 $30.03 28.86 $523.50 $490.62 -6.28% -$32.88 Edit

HJHO

Buy / Sell 375 $0.39 0.31 $156.24 $116.25 -25.60% -$39.99 Edit

GM

Buy / Sell 69 $10.92 10.26 $779.46 $707.94 -9.18% -$71.52 Edit

C

Buy / Sell 61 $18.92 17.81 $1,176.99 $1,086.41 -7.70% -$90.58 Edit

LPAD

Buy / Sell 1,000 $0.665 0.54 $677.99 $540.00 -20.35% -$137.99 Edit

MER

Buy / Sell 65 $27.81 25.60 $1,853.86 $1,664.00 -10.24% -$189.86 Edit

Cash 296.86 ... ... $296.86 $296.86

Answer 1

yes

Answer 2

I would get out of GM and MBIA asap.  these things are worthless.  GM's stockholder equity is actually negative!!!

you are definitely not diversified, though.  maybe consider dropping another financial, as well (probably merrill lynch).

and why do you own penny stocks like hjho and lpad?  the things don't even trade on an exchange!  this is a lot of risk, for no reward.  i would get out of the positions.

as far as new positions, how about a retailer or consumer-staple name?  you could benefit from something like a PG or WMT.

also, how do you feel about tech or a pharma/biotech holding?  maybe a BBBB or AMGN?

maybe consider an aerospace/defense name like LMT or a consumer name like TAP.

Answer 3

i would stop messing w/penny stocks first of all.

I would diversify by not owning both BAC and C.  Both of these companies are in trouble and vulnerable to the whole subprime mess....so why do you own MBI as well?  Are you a deep value investor or something.   Merrill Lynch is getting beaten down as well.  They've lost so much money in the past year, I don't know how they're even still in business.  And they're selling off solid assets (or atleast considering it) such as their interest in BlackRock just to stay a float.

Look for some better midcap value stocks that are large enough to have some decent volume, and maybe start gaining more analyst attention.  

Answer 4

wow

Answer 5

You should stop looking at your portfolio, let it sit and work for you, look again every 6 months to see how it's doing then forget about it again. You'll probably be rich in 5-10 years compared to today with this stuff.

Take any new cash you get and develop a good diversified long term portfolio following accepted asset allocation concepts and stop playing around. Maybe keep a little cash for messing around with 'experimental investments' since you seem to enjoy that. But start investing with proven methods.  

Answer 6

You are heavy in financials but I think at this point they are undervalued and you will make money off them. GM is getting killed due to high gas prices and foreign compteition, thet probably wont be changing any time soon. GE like someone mentioned is the only stock I own outright and I love it at these levels. I exclusively trade ETF's for more diversification and you can look at building a portfolio with them. The ones I hold: DIA, VTV, VBR, EEM, EFA, EPP, ILF, PWY, PWV, GLD, SLV, MDY, TIP, BWX, UYG and PSP. Over the long term with good allocation and rebalancing you can do quite will with minimal risk using this type of strategy. Look at this book: The Intelligent Asset Allocator, I forgot the author but you can search for it.

Answer 7

In regards to a mutual fund, yes, an expense ratio does decrease the money you make in a year by lowering the return.  Beware of front or end loaded funds as well.  But in theory, the amount of money you would be making from the fund would offset these losses.  And in theory, you would be better off putting your money with them than just the S&P or some other index.  After all, these are professionals that are investing your money for you...  In actuality, 80% of mutual funds under-perform the index.  I personally own mutual funds, and think they do have value.  Just choose them carefully.  

One thing you may enjoy looking into is something called an ETF.  http://finance.yahoo.com/etf.  They are similar to mutual funds, except they have no minimum buy-in requirement, usually have a lower expense ratios, and there is no minimum holding period (you can trade it like a stock).  Like Mutual Funds, there are ETFs for lots of sectors and investment preferences.  For example, if you wanted to buy all 30 companies in the DOW, you can buy DIA.   You will still get dividends (I think it's only paid annually)  DDM tracks the DOW times 2.  You can also be on things going down with inverse ETFs.  DXD is an inverse ETF that tries to match the inverse of the DOW times 2!  There's even ETFs that you can buy that track crude oil... USO for it going up.  DTO (which is relatively new) for inverse times 2 of it going down.  

As a 14 year old, I would suggest you playing with ETFs over mutual funds because it allows you to be more in active in your portfolio management and you would probably enjoy it more.

Although I personally would not recommend it, you seem to like Financials.  UYG will track 2 times the daily performance of the Dow Jones U.S. Financials Index, and includes strong holdings in BAC, JPM, and C.

Lastly, don't buy penny stocks (unless you have insider information or it's a really special company)!  They are penny stocks for a reason.  They have a high chance of going down to nothing and you can lose everything.  Also these stocks are highly manipulated.

In full disclosure, I own DTO.  Good luck!

Answer 8

how does a 14 year old even know what this is? well done!, defo go with lpad get rid of c, dont bother changing porfolio or anything x

Answer 9

Consider buying General Electric (GE).  It's lower now (last time I checked) than it was the night before a newspaper article mentioned it favorably as having had a history of rising dividends.  Moreover, they recently received a big order for wind turbines.

This is not financial advice or an offer to sell blah blah blah I own GE.

On edit: As for your question about the expense ratio of a mutual fund, that effectively applies to your total investment in the fund, not your profit.  If you go into a fund, consider one of those with lower expense ratios.  Consider exchange-traded index funds that invest outside the withering USA.

Answer 10

I'd hold C - I'm slowly buying since I think they're undervalued & they'll do well long-term (5+ years).

GM looks like a dog to me.