I created a 10 stocks for 10 years portfolio in April of 2005 which I shared on this blog. It did very well.

Over the years I adjusted the portfolio occasionally. Unfortunately the website I used to track results stopped doing that (and it is much more difficult to track results – with dividends, stock splits, spinoff… than you might suppose). I estimate I beat the S&P 500 by maybe 300 basis points annually (for the portfolio with slight adjustment over time, which is the one I tracked).

With this post I have created a new 10 stocks for 10 years portfolio.

The 10 stocks I came up with are (closing price on 22 April 2005 – % of portofilo invested):

• Tencent (TCEHY) – $43 and 15% (using the USA ADR). A phenomenal company with incredible global prospects for the long term. As the stock price has been hampered by concerns about China it has great potential for appreciation from the current price.
• Alibaba (BABA) – $175 and 15% (using USA ADR). Another phenomenal company with incredible global prospects that has performed poorly this year due to China concerns.
• Alphabet (GOOGL) – $1,254 and 11% (in the original 2005 portfolio the price was $216 and it started at 12% of the portfolio. The prospects are great long term, the stock price reflects that so it isn’t cheap but over the long term I expect it to do very well).
• Apple (AAPL) – $225 and 11% (I added Apple to the original 10 for 10 portfolio in 2010. The biggest mistake in the original portfolio was leaving off Apple, I considered it but chose not to include it. It has been my largest stock holding for years. It has been very cheap even just a few years ago, though today I think the price is much more reasonable so it isn’t the great bargin it has been. Still the long term prospects are great.)
• Abbvie (ABBV) – $97 and 10% (I added Abbive to the original portfolio in 2014. I would select a couple other healthcare stocks in a real invested portfolio for balance but Abbvie is the company I am most comfortable with so I include it here.)
• Toyota (TM) $125 and 9% (in the 2005 portfolio the price was $72 and it made up 12% of the portfolio). I believe the company is very well managed and the long term prospects are good though I am a bit worried about autonomous cars and the future of transportation. A potential new market for Toyota is robotics but they have not been as aggressive with software development innovation as I would hope on that front. The companies I am most interested in are very internet focused and I don’t like how concentrated that makes this portfolio so adding Toyota and Abbive adds a bit of diversity, though obviously not much)
• Amazon (AMZN) – $2,002 and 8% (in the 2005 portfolio the price was $33 a share, it was by far the best performer. It started as 8% of the original 2005 portfolio. I am very high on the prospects for the company, the stock price is what leads me to limit it to 8% of the new portfolio.)
• Naspers (NPSNY) – $33 and 8% (bought 30 October 2018, the company is largely a proxy for Tencent but also has many other significant investments in internet companies, the decline in Tencent, along with the Chinese market decline, and therefore the decline in Naspers just makes it too good an opportunity to pass up)
• Vanguard Health Care Index Fund (VHT) – $177 and 8% (I can’t decide on what other health care stock to hold for 10 years but I believe strongly in global growth of health care investments over the next 10 years so I settled on this low expense ETF.)
• Danaher (DHR) – $103 and 5% (I like this company but honestly the biggest reason for including it is to get some more diversity in the portfolio. I added it to the 2005 portfolio in 2008.)

I strongly believe that 10 years from now the Chinese stock market will have performed extremely well. There are of course numerous substantial worries about Chinese investments (the real estate bubble, high debt levels, “Great Firewall”, difficult government regulatory environment, restrictions on the press, restrictions on open debate…) but there are many reasons to be very optimistic about the long term prospects for China’s economic growth and the very promising leading companies prospects: such as Tencent, Alibaba, Baidu, Ctrip….

At this time it seems to me that the stock prices of leading Chinese companies are being held down compared to other leading companies (Apple, Google, Amazon…). Either the USA companies are overvalued or the Chinese ones are very under-valued or the global economy outside the USA is going to do very poorly in the next 10 years. Google, Apple etc. make a huge amount overseas but they have more earnings in the USA than Tencent and Alibaba (which still have almost none in the USA though their global business, outside China, is growing extremely rapidly).

One very big factor that I believe will support Chinese stock prices over the next 10 to 20 years is an large increase in the holdings of stocks by those in China. The current distribution of savings in China has extremely limited stock investments (and much larger bank savings accounts and real estate investments than in other countries). I expect that to change with a large increase in stock investing in China over the next 10 to 20 years.

Two other companies that are interesting are Naspers (which owns a huge amount of Tencent) and Softbank (which owns a large amount of Alibaba). Softbank has a large portfolio of investments in leading technology companies globally though much of it is held in a somewhat complicated manner. Naspers is more focused but also has a strong global portfolio. One of the very important aspects of Alibaba and Tencent is their huge portfolio of technology company investments made at the venture capital stage mostly (Google also has quite a few more investments than most people realize). I also believe Vanguard Emerging Market ETF (VWO) is a very good long term investment.

I wouldn’t be surprised if Chinese stocks had difficulty in the next year or two but long term stocks such as Alibaba and Tencent offer the best prospects considering realistic expectations for possible rewards compared to the risk investing in them poses today.

This portfolio is not meant to be a complete personal financial portfolio (at most it would be a portion of the portfolio allocated to equity holdings). Previous posts on portfolio allocation: Investment Risk Matters Most as Part of a Portfolio, Rather than in Isolation, Investment Options Are Much Less Comforting Than Normal These Days (2013) and Investing Return Guesses While Planning for Retirement.

Abuse of the credit system by 3rd party collection agencies (and credit reporting agencies) in the USA has been a long term problem.

An attempt to partially address some of the abuses was a change in the required reporting practices that impacted collections accounts specifically, known as the National Consumer Assistance Plan (NCAP), which rolled into effect during the second half of 2017. The plan has many components, including: (1) a requirement for more frequent, detailed, and accurate reporting of collections accounts, including reflecting when those accounts have been paid; (2) a prohibition against reporting debts that did not arise from an agreement to pay, or from, medical collections less than 180 days old; (3) the removal of collections accounts that did not arise from a contract or agreement to pay; and (4) permission to report any account only when there is sufficient information to link the account with an individual’s credit files (requiring a name, address, and some other personally identifying information such as a Social Security number or date of birth).

All in all, the changes in credit reporting prompted by the National Consumer Assistance Plan have resulted in an $11 billion reduction in the collections accounts balances being reported on credit reports. A total of 8 million people had collections accounts completely removed from their credit report. However, collections accounts do indeed align with other negative events and the cleanup of collections accounts had the largest impact on the borrowers with the lowest scores.

These borrowers will certainly benefit in the long run from the cleanup of their credit reports, since higher scores are associated with better access to credit, to the job market, and even to the rental housing market. But the immediate impact of the removal of collections will be muted for most of those affected (other items are also impacting their current credit score).

In the longer-term there may be a rebound in collections account reporting because creditors will likely begin collecting the newly required personally identifying information as they adjust to this reporting change.

This was a small good step in protecting consumers from the bad behavior of credit reporting companies and their customers. But much more must be done to protect us from having our financial lives negatively impacted by bad practices of the credit reporting companies.

Related: Cleaning Up Collections – Avoiding the Vicious Cycle of Credit Problems – Truly Free Credit Report – USA Household Debt Jumps to Record $13.15 Trillion