My Personal Portfolio
Why aren't these names in the AIA Newsletter?
I get asked by subscribers about my so-called “personal portfolio,” which I occasionally mention during podcasts.
Before I start, I have to say that I own all the stocks in the AIA Portfolio and the AIA Dividend Portfolio.
The AIA Portfolio aims to be an actively managed portfolio that maximizes capital gains and beats the returns one could achieve by passively investing in a low-cost S&P 500 fund or ETF.
In the AIA Portfolio, I typically look for companies that are bombed out, ignored, or hated yet have some catalyst that could change perceptions toward the stock and lead to a re-rating upward in the stock price.
I don’t mean to be hyperbolic, but that means trying to turn one dollar into five or ten dollars.
My process for selecting stocks and/or investments involves consuming a voracious amount of information, identifying opportunities that most don’t see, or skating to where I believe the puck will be before everyone else. This has worked well, although it can be volatile and take longer to bear fruit than initially expected.
The AIA Dividend Portfolio comprises stocks with decent dividend yields yet are in industries that are out of favor and could inflect. This allows me to collect current income (tax-free in a self-directed IRA) while still having the potential for capital gains if and when these companies inflect.
The stocks I hold in my so-called “personal portfolio” are there for a few reasons. For instance, I might come upon an idea I find interesting. Before I even do a deep dive into a particular stock, I may buy a small tracking position. This forces me to keep an eye on it and do further research.
Some ideas end up not meeting the criteria for recommendation into one of the portfolios. Some of the stocks I bought a while ago when they were relatively cheap but have appreciated and do not fit into the AIA Portfolio at their current valuations.
Some of it comes down to bandwidth. I don’t have the time to compose a big write-up on all the stocks and include them in the AIA Portfolio. I am trying to keep the AIA portfolios at a reasonable number of stocks.
I hope that clarifies the so-called “personal portfolio” for people. Below are some of the stocks I own that are not in the portfolios, with a few comments on each.