The story of my IRA contribution
I made my 2006 IRA contribution yesterday. Yes - I realize that most people make their '05 contribution right about now, but I'm proactive when it comes to my retirement account. It is now 2006, and thus I make my 2006 contribution.
I had a lot of difficulties in deciding what to buy. Lately, I've been buying up positions for my investment club and the various accounts that I manage, and I think I'm getting the distinct impression that I'm over-diversifying - holding far too many positions. I think my favorite Oracle of Omaha once said that you should probably never own more than 20 stocks in your lifetime - operating under the mentality that only 20 companies are managed (and valued) well enough to justify putting your money there. 20 companies seems a little thin to me, but it's inspired me to increase my positions in companies that I already own.
A lot of times, my conversation with friends involve stocks (surprise, surprise). And since I was in a rut over a decision, I turned to my friend who either works at the Chicago Board of Trade or the Chicago Merc Exchange. I forget. He first recommended that I buy mutual funds with it. Hah. I don't do mutual funds. His reason was "for diversification." Well, I'm already diversified and I rejected his recommendation. I love what he said next:
Friend: Are you diversified internationally?
Friend: International equities are sexy.
His response gave me a huge smile. International equities are sexy. Frequent readers will acknowledge my penchant for diversification, and in this case international diversification. My friend had a huge point - why not diversify more internationally?
This morning, I put in an order for a small position in PetroBras (PBR). (My $4000 contribution only allowed for 45 shares - but hey, every little bit counts). I wrote about PBR a few posts ago, and now trading at $82, it still sports a low P/E of 10.
Petrobras honestly has a lot of potential. Feel free to read the following news reports to support my liking of PBR:
Brazil's Oil Giant Eyes Expansion January 13, 2006
Brazilian Oil Production Surges in 2005 January 17, 2006
I had a lot of difficulties in deciding what to buy. Lately, I've been buying up positions for my investment club and the various accounts that I manage, and I think I'm getting the distinct impression that I'm over-diversifying - holding far too many positions. I think my favorite Oracle of Omaha once said that you should probably never own more than 20 stocks in your lifetime - operating under the mentality that only 20 companies are managed (and valued) well enough to justify putting your money there. 20 companies seems a little thin to me, but it's inspired me to increase my positions in companies that I already own.
A lot of times, my conversation with friends involve stocks (surprise, surprise). And since I was in a rut over a decision, I turned to my friend who either works at the Chicago Board of Trade or the Chicago Merc Exchange. I forget. He first recommended that I buy mutual funds with it. Hah. I don't do mutual funds. His reason was "for diversification." Well, I'm already diversified and I rejected his recommendation. I love what he said next:
Friend: Are you diversified internationally?
Friend: International equities are sexy.
His response gave me a huge smile. International equities are sexy. Frequent readers will acknowledge my penchant for diversification, and in this case international diversification. My friend had a huge point - why not diversify more internationally?
This morning, I put in an order for a small position in PetroBras (PBR). (My $4000 contribution only allowed for 45 shares - but hey, every little bit counts). I wrote about PBR a few posts ago, and now trading at $82, it still sports a low P/E of 10.
Petrobras honestly has a lot of potential. Feel free to read the following news reports to support my liking of PBR:
Brazil's Oil Giant Eyes Expansion January 13, 2006
Brazilian Oil Production Surges in 2005 January 17, 2006
posted by L.Su at 8:52 AM
<< Home