Mix and Match Your Portfolio Selections

Physician's Money DigestJanuary15 2005
Volume 12
Issue 1

The Outlook

As your life changes, so shouldyour investments. According to, physician-investorsneed to periodically alter the mix ofstocks in their portfolios according totheir age and lifestyle. It's therefore recommendedthat these investors followfour broad investor categories: singles,young and married, mature families,and retirees.

If one of these categories isn't a perfectfit for you, choose the category thatbest describes your current situation andthen modify your stock mix to meet yourobjectives. Of course, expect to changeyour investment objectives over time toreflect rises in income and declines infamily obligations. Be sure to mix theportfolio entries carefully. Following is asynopsis of the four investor categories,which includes stock suggestions:

• Singles. With an emphasis oncareer, the preference in this category isto concentrate on stocks for your long-termretirement plan. Depending on eligibility,this group should quickly set upor participate in an IRA, Roth IRA, or401(k) plan. Consider supplementing thisplan with these solid, yet aggressive,growth stock choices: Amgen, CiscoSystems, Constellation Brands, LandstarSystem, Inc, and Pacific Sunwear.


• Young and married. Despite thegreater financial responsibilities (eg, collegetuition and mortgage payments),physicians in this category should strivefor some price volatility to achieve significantgains. The companies listed herehave above-average earning prospects,but expose investors to less risk than thestocks listed in the singles group: HomeDepot, Liz Claiborne, Nabors Industries,Qualcomm, and Alberto-Culver. Stocks listed in the singles and youngand married categories have strongergrowth potential but carry higherprice/earnings multiples and offer littleor no dividend income.

• Mature families. In this phase,physicians are enjoying peak earningyears. Generally, major expenses arealready over or provided for. The goalnow is to build a retirement nest egg. Allof the stocks in this list have a strongrecord of earnings and dividend growthand each of the stocks provide a modestyield: Bank of America, Johnson &Johnson, American International Group,Wendy's, and Aqua America.



• Retirees. In this final life phase, thegoal is to protect your assets. Physiciansshould replace some of their equitieswith short- to intermediate-term fixed incomesecurities. It's also vital to maintainsome investments that will keep upwith inflation. Thus, investing for capitalappreciation is essential. Stocks in thiscategory should provide a combination ofsafety, dividend growth, and moderateappreciation potential. The stocks listedhere carry above-average yields and havegood dividend prospects: Abbott Labs,ChevronTexaco, Verizon, Wachovia, andGeneral Growth Properties.Remember to always thoroughly checkout a stock before investing. For informationon Standard & Poor's newsletter , call 800-852-1641.

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