YEAR END REVIEW

2007 proved to be a difficult market. My portfolio lost 5.2 percent for the year. This is only the third losing year I have had since 1992. The previous years being 1994 with a loss of 1.4 percent and 2002 with a loss of 2.9 percent.
The major reason for the losing year was the declining value of my preferred stock holdings which make up 26 percent of my portfolio. The good news is they are now paying an average dividend of 8.5 percent and I added to several on the way down so I am in a good position to collect fat dividends while I wait for them to climb back up. I rarely ever sell a preferred stock, only if I think the underlying company is in trouble. The only way for a company to call them in is if they have reached the maturity date and they pay me $25.00 per share. Most of the ones I own are trading from $18.00 to $22.00 so they will have a nice move up someday when they do get called in.
While reviewing the year I counted 14 stocks or mutual funds I sold in 2007 for a 10 percent or higher profit. I counted 3 I sold at a loss of 10 percent or higher. There are several stocks I still own where I have a nice profit as well as several I own where I am down considerably from where I bought, most notably Citigroup which I wouldn't consider selling at today's depressed price. If I didn't already have a position I would be buying here even with the rumours of a dividend cut.
What to do in 2008? My portfolio is split between 38 percent stocks, 26 percent Preferred Stocks, 17 percent bonds, and 19 percent cash.
I hate to have almost 20 percent of my money in cash so I will be looking to put it to work in 2008.