Portfolio: For 21st Century

The stock market performance during the last few days were quite confusing. However, make no mistake about it; we are currently in a bull market. Just like four seasons, this bull will fade away too. Preparing for the next new bull market to come alive.

There is this one question I get all the time: "Isn't putting money in the stock market like gambling in casino?" My answer: "The difference between casino and the market is simple. The longer you stay in the casino, your chance of making a profit falls dramatically. Stock market however, the longer you stay with the market, your chance of making a profit dramatically increases."

Look back to the history, through all the economic recessions, wars, terrorists, diseases, natural disasters and god knows whatelse; has the market gone down or up? Statistically speaking, if you leave money in the market for 10 years, it is almost impossible not to make a profit. Lately everyone is hot on real estate investments. Of course it is important that you buy a home to live in but as an investment over the long term, stocks returned higher rate of return than real estate. Most people forgot this important fact. Real estate will cool down in coming years.

An academic answer to casino vs. stocks is this: "Casino is a zero-sum game, stock market is not." Zero-sum game means that the total amount of money (aka the pot) does not increase, you are mearly moving money from person #1 to person #2 and so on. Thus, if John made $100 then Mike just lost the same $100. As a group, they are no better off than before.

In the stock market, everyone can be a winner. When stock price increases, everyone benefits. Anotherwords, as a group we are all better off. The total amount of money (the pot) actually increases for all the players. Thus, as a whole we are better off than before.

Refer to my note dated 4/19 (what's your position) where I gave you a worry free, high performing, low risk, hands free, cheap portfolio for the next 30 years. Let me give it to you one more time: [ TMW 50%, EEM 20%, AGG 30% ] This is a truly a genius portfolio for non-active investors. I highly recommmend this model.

Refer again to my note dated 3/31 (End of 1st quarter) where I gave you a glimpse of what I think of the investments in the 21st century. Let me now give you a porfolio that carries more risk than the above but I feel will perform much better than hands free portfolio.
For the next 30 years these are the areas where serious money will be made: Asia / Biotech / Oil & Gold / Global high tech. Make sense?
Now let me give you the best investment for each.

Portfolio for the 21st Century:

10% FXI (Top 25 chinese public companies in one basket)
10% EEM (Emerging countries such as Korea, Brazil, India, Russia and more)
10% IXN (Top global technology companies)
10% PBE (Power shares Biotech & Genome related companies)
10% OIH (Oil services companies-better than oil companies)
10% ASA (Gold and Silver mining companies)
10% AGG (Lehman Brothers Bond Index-some bond is good)
10% PWC (This will outrun the SP500 index)
10% PWO (This will outrun the Nasdaq index)
10% PIV (Power shares Value Line - top U.S. companies)

So, there it is: this will total 100% and you are set.
Believe me, I have spent more hours than you can imagine going through all available investments to come up with the best, cheapest, safe and intelligent choices. Try your best to slowly add each of the above ETFs (exchange traded funds) into your 21st century portfoilio.

P.S: As you know, Bad Toys Inc. (BTYH) is one of our holdings. It will come out with 1st quarter earnings report in 2 weeks. I am expecting a blow out numbers. The stock will move up significantly I imagine. Get in if you haven't yet. The stock will not be where it is next month.