What’s in your portfolio for 2018?
The annual return on capital (ROOC) for a stock is the amount of money investors can earn from investing in a stock for the next year.
That’s a very simple idea, but for most investors, ROOC is a big deal.
The higher the ROOC, the more they can earn, and it’s important to be able to earn the right amount of ROOC to offset the costs of buying a stock, according to the Wall Street Journal.
So it’s really important to have a portfolio that’s in good shape, says Michael E. Denniston, chief investment officer of Dennison Investment Management, who is a member of the board of directors for the Vanguard Retirement Income Trust.
Domeniston’s advice to investors: “I think you should be able afford a decent amount of stock and put that money into bonds and bond ETFs,” he says.
And as for the market, the market has been doing well this year, so investing in stocks is a good idea, Domenisch says.
“I don’t think it’s necessarily the right time to invest in stocks,” he adds.
So what’s in the portfolio for this year?
Domenis says that you should consider buying stocks in small, mid and large cap companies, and that if you’re a small cap investor, you should invest in bonds and ETFs.
“You’re going to have to make some decisions,” he explains.
“But for small cap investors, I think bonds and index funds are the way to go.”
You can also look to buy small companies, such as hedge funds and private equity funds, and then sell them later, if the market improves.
But keep in mind that this is the market right now, and there are many different stocks, so you may want to consider what’s right for your needs.
You can use your portfolio as a guide for when to sell stocks.
“If you’ve got the best balance in your life, you may be willing to sell it at the right price,” says Domeniss.
“That’s the point, isn’t it?”
And if you feel your stock portfolio is too expensive, you can also consider buying small bonds.
But if you think the market is not right right for you, you’re not going to be successful, Denniss says.