Is my portfolio diversified (or even good)?

Question

Vanguard mutual fund: $7,500 (2 funds - IRA and non-retirement)

Vanguard money market: $3,000

Stocks: Countrywide, China Precision Steel, Goldstar Resources, Oilsands Quest, Pfizer, Sirius, Unilever, Usec, Washington Mutual, Western Refining, Xcel Energy: $8,000

Answer 1

In my professional opinion, you do not yet have enough money to be investing directly in stocks.  A minimum position in a single stock would be between $10k-$20k with a minimum of 5-7 positions for diversification means that you need at least $100k to start investing in stocks directly.

If I were advising you, I would tell you to keep the 3 mutual funds,  Use the money market account for your emergency fund; the 2050 fund for retirement; and the Star fund for long term savings.   Sell the stocks.  Use the money to fund your $5000 max contribution for the IRA this year.  Split the rest between the MM and Star.

Answer 2

The Target Retirements are set to be self deversified and automatically adjusting tools for investing.  Their allocation changes to more conservative the closer you reach retirement.  You are diversified.  Oh by the way I work as an investment specialist at Vanguard.

Answer 3

No.  To be diversified you need different asset classes like international stocks, and bonds.  Different asset classes act differently under various market conditions.  So these asset classes are uncorrelated with eachother.

Answer 4

You have an incredibly risky portfolio. It is diversified, but your "asset allocation" needs a lot of help.

It looks like you bought the most aggressive stocks going.  I'm pretty aggressive.... I'm a swing trader.  I would never have more than 15% of my assets in the type of stocks you have. Your risk level is "out the door".  It's time to rethink your approach. Learn about "asset allocation". Create your own model and follow it.

Answer 5

What are the Vanguard funds?

Answer 6

It looks to me like you have some pretty good diversification going there.

Don't listen to what any of the other shills are saying, especially MVD34. Sounds to me like he doesn't have a clue as to what hes talking about, especially in the area about how much money you need in your account to start buying stock.

I have less than $500.00 in brokerage account, own 5 shares of Visa, which has given me a 35% profit since I purchased it.

I also have a call option position on Solarfun that has given me a 14% profit just today.

Don't trade emotionally, do your fundamental and technical analysis and you'll be fine.