Monday, January 21, 2008

1/21/08 Stock Purchase Update - Signficant Decline In Portfolio

In my 1/14/08 stock purchase update, I wrote about how the 10/15/07 updated buy list of Potash (POT), Southern Copper (PCU), CNH Global (CNH) and BHP Billiton (BHP) was performing. In that article, the portfolio had declined to a $2,862 gain for a 20.1% return. As of 1/18/08, the portfolio had pulled back further to a gain of $1,072 for a 7.5% return, due to the market decline in the first thirteen trading days of 2008. The portfolio is now down 20% from its high on 12/28/07. The new purchases of PCU, CNH and BHP are down $1,498 for a 14 % loss. Both PCU and BHP continue to have large losses of 22.5% and 15.1% respectively. Here's the current status of the stocks I own in the portfolio:

My Wealth Builder 10/15/07 Buy List
Stock [purchase date]SharesPurchase Price

Current Price

Potash (POT) [6/7/07]50



Southern Copper (PCU) [11/13/07]40



CNH Global NV (CNH) [11/13/07]50



BHP Billiton (BHP) [11/27/07]50



The market activity continues to be downward and ugly. As of the close on 1/18/08, the Dow, Nasdaq and S&P 500 indices were down 8.67%, 11.77%, and 9.67% year to date. Unfortunately, there are no indications that a turnaround will occur soon.

I continue to believe that the probability of a recession in 2008 is relatively high. The multitude of negative factors will eventually outweigh any actions by the government and financial institutions. Originally, the Fed interest rate cuts and other actions led me to expect that the bull market would last through summer, 2008. However, the economic data in January, 2008 may cause the bull market to end earlier. For either case, I expect the market to continue to be choppy in 2008. At this time, I will continue to hold this portfolio. However, I do not plan to add any more to the amounts that I have already invested in the above table.

For more on Strategies and Plans , check back every Monday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

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