Each SNIPI™ portfolio includes a balanced blend of companies from across the stock market. We understand having too much of a portfolio in any single company or area (sector) of the market can have severe consequences if that company or sector runs into trouble. Consider bankrupt companies Worldcom and Enron whose workers saw their retirement accounts vanish as a consequence of having their investments concentrated in their company’s stock, or the DOTCOM bubble which burst at the beginning of the 2,000’s resulting in losses exceeding 50% and more for investors whose portfolios were concentrated in technological companies. Owning a lopsided portfolio is like having an unbalanced load on a ship which increases the likelihood of capsizing or sinking in turbulent waters.
The following list shows the economy broken into sectors. Long Run Financial, Ltd. lowers risk by distributing equal amounts of a client’s portfolio across 10 of these 11 sectors.
- Telecom Service (telephone and cable companies)
- Information Technology (makers of computer chips, software, hardware)
- Utilities (water/electricity/gas suppliers)
- Healthcare (pharmaceutical companies and medical equipment)
- Consumer Discretionary (restaurants, stores, etc.)
- Consumer Staples (makers of food, beverages, clothes products)
- Energy (oil and gas related industries)
- Industrials (makers of machinery and equipment, freight and logistics companies)
- Materials (Chemical manufactures, miners)
- Financials (banks, insurance companies)
- Real Estate (storage companies, owners of retail facilities, apartment complexes, hospitals, nursing homes, etc.)
NOTE: Each SNIPI™ portfolio includes at least one company from each sector with the exception of the energy sector. Due to it’s poor performance over the past fifteen years and it’s extreme volatility, the energy sector is deemed unsuitable for SNIPI™ investors.