The Prudent Investor

Introduction to the Prudent Investor
December 31, 2006, 4:15 pm
Filed under: Uncategorized

Item #0 – Introduction

The purpose of this blog is to occasionally post thoughts and updates on a portfolio I am going to create.

A while back it was brought to my attention that is a place where equities can be traded without a broker’s commission. Of course, my initial thought centered around how they must make their money, and if they only allowed for market orders then that would be rather obvious. However, limit orders are allowed, and they make their money by sending the orders through their routing process, so as long as I can purchase at my price then I am fine with this.

The purpose of this portfolio is to purchase equities with the expectation of holding for at least six months. Growth will be a consideration, as will the typical value assessments, as will be diversity of choices.

This money is considered to be my “Go To Ireland” money. A number of years ago I parked three thousand dollars into Vanguard’s Balanced Index Fund Investor Shares fund. The idea was to find a relatively safe location to place my money, as I planned to withdraw it and use the money for a trip to Ireland (of course, there were many safer options, but I’m always willing to take on more risk than is often considered acceptable). Because of numerous reasons, I was not able to take the trip, and having added $250 per month to it over this time, the fund has tripled in size. I will use a third of this to initially fund the portfolio, and will add $100 per month to continue funding.

My situation at this point is that I am 55 years old and expect to work full-time for at least the next ten years. Sometime over the subsequent five years I expect to switch to part-time, as the house will be paid off by then, and at 70 I will begin to take Social Security and become a full-time professional fine arts photographer (retire). I max out my employer’s 401k contribution, max out money going into my Roth IRA, and have no debt other than the mortgage (my car is paid for, and I save for the purchase of my next car throughout the life of my current car). In a worst case where all of my picks go to zero, I have properly saved in the right places, so I am able to handle increased risk, though this will not be an increased risk portfolio.

So there you have it. I have sent all of the proper documents to, and when the account is set up I will fund it and begin the portfolio. In the meantime, I will begin considering companies to add to the portfolio and will post those thoughts on an occasional basis.

Hopefully, I will learn something from this public document, which is really the point.

As always, please feel free to either enter a comment, or email me at

Cheers –