Friday 11 May 2007

US Stock Trade and "Little Book" Portfolio Update - MAY 2007

This month I selected Jakks Pacific (JAKK) from the MagicFormula listing to add to my "Little Book That Beats The Market" Portfolio of US Shares (100% geared). I bought 200 JAKK @ $24.96. My US Stock Portfolio current situation is listed in the sidebar.

My portfolio had recently reached an annualised ROI of 20%, but in the last few days it has dropped back considerably. I won't be doing a serious review of performance and comparison to a benchmark (such as the Russell 2000) until I have a track record of at least five years to evaluate. My success criteria is to achieve a return greater than the cost of funds invested (borrowed as part of a "Portfolio loan" from St George bank, so the interest rate is the standard variable home loan rate), and my target is to achieve a ROI of 10-20% pa over the long term.

When I'm fully invested this December (approx. US$90K) I'll have a portfolio of 18 individual stocks (I'm buying one US$5000 lot of stock each month), and I will then start to sell off the oldest holding each month and replace it with a new pick from the current MagicFormula list. Rather than rollover the exact amount realised from each sale into a new stock, I'll invest 1/18th of the current portfolio value, adding in some extra cash when needed. That way I'll be investing roughly equal dollar amounts each month.

Enough Wealth

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