Quote:
Originally Posted by MPM IV
It got quiet in here.
I'm hoping this is a buying opportunity as I'm utilizing money I don't intend to need in the near future.
Since my last post I've added Coke (KO) and Kimber Morgan (KMI) bringing me to a total of six positions. I previously had:
Altria Group (MO)
ATT (T)
Southern Company (SO)
Royal Dutch Shell (RDS.B)
Here is my question for you more knowledgeable and experienced investors. I'm coming to the end of my available funds. RDS has dropped significantly since I invested. Would I be better off creating another position in a different sector, or buying down my price per share of RDS?
I appreciate any insight you gentlemen can provide, but please provide the reason you would do one or the other with your answer.
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Not an easy one to answer, especially not knowing how much of each position is in your potfolio and if these are your only holdings. I am by no means an expert but here is how i look at it.
I am going to assume the six stocks comprise your total exposure to the stock market and you are fairly evenly weighted in each position? If that is the case, The conservative approach would be to open a new position in a sector that you do not have a position in. The reason is it will make your portfolio more diversified which will lower the liklihood of one position having a big negative impact on the portfolio and lower the overall risk of your portfolio. You also said that you have a position in KMI which is in the energy sector as well. Buying more RDS would really put you heavily weigted in energy.
You mentioned that you are at the end of your available funds. The only way I would consider buying more RDS was if I knew I had more funds to continue adding to the portfolio with which i could diversify with when the next buying opportunity arrives. I Think it is difficult to remain equally weighted at all times and there will be times when you are overweighted in one position, especially when you are starting out. The important thing to keep in mind is to not get too heavily weighted in one position or one sector.