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WealthEffect PortfolioTwo Arrows
by WealthEffect Staff

How much to have in stocks?
  WealthEffect Portfolio  
  Four Themes  

The first question you must answer is how much of your money do you want in stocks. To help you in this decision, we have prepared an Investor Worksheet. This worksheet takes into consideration how much you currently have in stocks, bonds and cash. Further, it considers how much more you will be able to invest in the next several years. Finally, for homeowners, it gives some weight to your unrealized profit (your "equity").

The suggested amount of stocks in your portfolio reflects two assumptions:

  • Stocks are more attractive than bonds or cash over time (if you're not investing for the long run, find a new web site)
  • Stocks are less attractive than usual (stock prices have been rising faster than earnings for almost two decades now)

The WealthEffect Portfolio is primarily comprised of companies with sustainable competitive advantages and quality managements. This should come as no surprise, since it reflects the recommended investment strategy of WealthEffect.com. There are a few speculations included from the technology group — the thinking here is that, although individual tech companies are speculative, technology in general does have a sustainable advantage in our world. As you will see, the suggested tech companies are dominant players in their industries. (Not all leaders are included, however, since some of them sell at unreasonable P-E multiples.)

The portfolio reflect several themes:

Affordable America — products which represent the best of our culture; a piece of the American Dream which is affordable around the world
  Gray & Pay — an aging and affluent population make healthcare an attractive industry; with the increasing influence of managed care, disproportionate benefits will accrue to those who give the most bang for the healthcare buck  
  The Tech Wave — as indicated earlier, the extraordinary impact of technology will only grow, impacting and improving our lives in ways we can't imagine  
  Financial De-Revolution — the deregulation of our financial system from the restrictions imposed during the Great Depression still have a long way to go; the free market will tend to reward the best and brightest  
Suggestion: Go to Investor Worksheet or to the WealthEffect Portfolio