Investing Unscripted

138. January 2025 Mailbag

Jan 22, 2025
Dive into listener insights on preferred shares versus common stock, exploring their respective risks and rewards. Tune in for strategies around portfolio rebalancing and the importance of diversification amidst market volatility. Intrigued by REIT metrics? Learn about distribution payout ratios and funds from operations. Discover the solar energy market with a focus on prominent companies like SolarEdge and Enphase. Finally, grasp the unique mindset needed for options trading and how it differs from traditional investment strategies.
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ADVICE

Rebalancing and Diversification

  • Rebalance portfolios with large Mag7 holdings by diversifying into value funds, smaller mid-cap, and international exposure.
  • Hold some cash in money market funds, but be mindful of market timing.
INSIGHT

Mag7 Concentration and Valuation

  • While Mag7 companies have high free cash flow yields, their concentrated growth and high valuations raise concerns similar to the 1999 tech bubble.
  • Artificial intelligence could drive future growth, but expectations and timelines might be unrealistic.
INSIGHT

Investment Strategy and Time Horizon

  • Downside exposure reduction becomes a priority as investors approach retirement.
  • Staying invested in equities and contributing regularly benefits long-term investors.
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