Last week, I presented an update on the monthly progress of my dividend portfolio. In this post, I am discussing the quarterly risk analysis. My objective here to make sure I am continuing to following my risk management process.
- Maintain pre-determined asset class allocation;
- Maintain pre-determined diversification (any sector should not exceed 10%); and
- Dividends from a single stock should not exceed 5% of total dividends.
My dividend portfolio holdings can be referenced in My Portfolio menu at top of this page.
Maintaining Asset Allocation
Chart 1 shows the asset class allocation along with my maximum target limits. In general, I am continuing to meet (or much closer) to my pre-defined target levels. During 3Q09, I did not make any contribution to the emerging markets index funds such as VWO and EPI. This was because I believe they rose too quickly to my comfort level. I am still tad lower than my maximum limit for emerging markets.
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Investing in ETF – Know What You are Investing In
Example 1: VWO and EEM are funds based on MSCI emerging market select index which is market capitalization based index. It includes 18 to 20 emerging economies where stocks can be bought free of any restrictions.
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