James L. Paris Investment Recommendations

James L. Paris Model Portfolios

***Important: Please Read The Instructions Below, Prior To Accessing Our Investment
Recommendations For The First Time.

Under $10,000 Model Portfolio Click Here

$50,000 and Under Model Portfolio Click Here

Over $50,000 Model Portfolio Click Here

****Instructions****

***As the recommended investment advisor of Christian Money.com, we at Stock Market Income Advisors, Inc. are pleased to contribute to the site our monthly asset allocation models, based on portfolio size, for your review. However, before you peek, we would ask that you read on here so that you can better understand what you’re seeing when reviewing the models. Please note that what follows is not really a course on basic investing (although some investment basics are covered here), but information that we feel is good to have when reviewing our allocation models.
The “ Hottest” Investments or Industries
Please note that our model portfolios do not necessarily reflect the “hottest” mutual funds or stocks at present, nor those with the very best returns year-to-date, or anything like that. Our selections are guided by the overriding philosophy that performance should be held against the backdrop of prudence. There are plenty of securities that have amazing performance records over very short-term periods of time, but which also carry questionable risk exposure. Performance of industries and economic sectors, as well as individual stocks and stock mutual funds, is unquestionably a significant factor when making allocation selections, but it should be one of a handful of considerations when deciding to which investments you dedicate your hard-earned monies.
Are these models for conservative investors or aggressive investors?
We are presenting allocations that assume the investor is seeking long-term capital appreciation without an overexposure to market risk. That said, there is always a risk of investment value fluctuation due to market volatility when investing in the stock market, even through the relatively less volatile mechanisms of stock mutual funds (the operative word there is “stock,” so there will always be the potential for volatility in some measure). Still, we firmly believe that much of that risk can be mitigated with both a “long-term” frame of mind, as well as attention to diversification and allocation into funds that are not overly volatile. Botoom line: We do not distinguish between “conservative” and “aggressive” investors in these models; we present a single set of portfolio models that we feel are reflective of a prudent approach to achieving long-term capital appreciation. We realize that such an approach may not be a good fit for every investment mind, but that is ours.
Stock Mutual Funds, Individual Stocks, or Both?
Regarding our model portfolios for account sizes up to $10,000, we will only recommend mutual funds for those accounts. The diversification that comes with the use of mutual funds, thereby spreading your money over the fortunes of many, many stocks in just one fund, makes funds the best investment for the prudent stock market investor. Once an individual portfolio size creeps past $10,000, it may be time to at least consider the use of individual stocks, but even that can be very subjective. Ideally, we normally don’t like to recommend that an individual considers several stock positions for his account until his portfolio value reaches the area of $25,000 to $50,000.
No-Load Mutual Funds
When we speak about mutual fund recommendations, we highlight no-load (no commission) funds, and do not feature load funds. However, please bear in mind that many fund companies (also called “families”) do sometimes assess redemption fees under certain circumstances, particularly if you hold the fund for less than a given period of time. Also, if you purchase no-load funds through a brokerage, you may still be assessed a transaction fee by the brokerage, although many brokerages offer “no-transaction-fee” funds, as well. Here’s our point: While we will only mention no-load funds when suggesting mutual fund options at all (unless otherwise noted), we will leave our part of the fee screening process at that; the rest will be up to you. The fact is that in order to provide you with useful information in a timely fashion, we are limiting this part of our screening process to whether or not a fund is no-load, in the commonly understood sense; its ultimate transaction by you may, and we emphasize may, incur other sundry charges, depending on a variety of factors.
Stock Mutual Fund Types
Mutual funds are commonly categorized by “type.” Whenever you hear about a fund “type,” what’s being discussed is either the investment objective of the fund, some important criterion feature of the fund, or (frequently) a combination of the two. Here’s an example: There is a common type of fund available known as a “value” fund. A value fund invests in value stocks, which means stocks that are considered cheap (in other words, a good buy), by virtue of telling measures like price-to-earnings ratios. Another type of fund can be a “large capitalization,” or large cap, fund, which invests in stocks of companies whose aggregate value of the issued and outstanding shares is higher in comparison to companies, in general. Frequently, you will see the two fund types combined; for example, a well-known category of mutual fund is “large cap value,” which basically refers to a mutual fund that invests principally in companies that are very well-capitalized (i.e., big) but are also considered good buys at present; hence, large cap value. As you might imagine, the list of fund types is quite long nowadays, as mutual funds have grown in popularity over the past couple of decades.
Because we list our allocations principally on the basis of industry/sector type or fund type (or stock type, as it happens), it’s important that you become familiar with the various types of funds that are available. The following key is designed to give you a good overview of the fund types that you may see most frequently here in our allocations. We’re not claiming this is a complete list, particularly in light of how numerous (and contrived, sometimes) fund types have become, and how frequently now various fund types have been combined as a characterization of one fund; for example, a “mid-cap growth” fund essentially refers to a fund that invests in the stocks of medium-sized companies poised for significant growth. Let’s do this: If we happen to recommend something that you may not have seen before, we’ll try to be good about making sure you know what it is.

Income: Income mutual funds invest primarily in the stocks of large companies that have a strong record of paying quality dividends. These are typically the least volatile/most conservative of stock mutual funds.

Value: Value mutual funds invest in stocks that are regarded as being cheap, or an otherwise good buy.

Growth: Growth mutual funds invest in stocks that have growth as their principal objective. Growth stocks generally do not pay dividends, and instead reinvest what would be paid out back into the company. Growth stocks are considered more aggressive (read: riskier) than value stocks

Aggressive Growth: Aggressive growth mutual funds invest in stocks that are even more aggressive than “growth” stocks. This means that the potential reward is even higher, but so is the risk.

Sector: Sector funds invest in companies that represent a single industry or sector of the economy. For example, the XYZ Health Services Fund (a made-up name) would be a fund wherein its underlying portfolio of stocks is nearly all representative of companies in the health care industry. Sector funds are considered to be riskier because they lack diversification across several different industries, but ideally funds targeting a specific industry should make up only a small portion of the portfolio, anyway.

Index: Index funds are made up of a selection of stocks that are representative of a typically well-known index. For example, the XYZ S&P 500 Index Fund would be a fund wherein the stocks are representative of the S&P 500 Index. Index funds are by no means the kinds of funds that generate a lot of interest or excitement among investors, but they can be a good, low-maintenance addition to a portfolio when the market is doing well.

Foreign: As you likely guessed, foreign stock mutual funds invest in, well, foreign stocks. The fact is that roughly two-thirds of the world’s stocks are foreign stocks, so there is obviously a wealth of securities from which mutual fund managers can choose. You should be aware that foreign stock mutual funds are frequently further subdivided into a variety categories; here are the most prominent of those: Global (invests in both foreign and U.S. stocks), International (invests only in foreign stocks), and Emerging Markets (invests in stocks of countries deemed to be “emerging markets” by the International Monetary Fund or the World Bank; emerging markets countries are generally newly-industrialized, which makes these funds more aggressive, as foreign fund options go).

Market Capitalization: Market capitalization funds invest in stocks that have a market capitalization of a certain size. Market capitalization is essentially the total market value of the issued and outstanding shares of a company. However, you will not find a fund called the XYZ Market Capitalization Fund; what matters is not the fact that stocks have market capitalization (they all do), but rather the size of the capitalization. Accordingly, you will find funds with names like the XYZ Large Cap Fund, or the XYZ Small Cap Fund. Basically, the distinctions in capitalization size when used in mutual fund names are just that simple: Large Cap, Mid Cap, and Small Cap. While strict definitions of each are tough to agree on, you would be fine to regard small cap stocks as those that have a capitalization of between $300 million and $2 billion, mid cap stocks as having a capitalization of between $2 billion and $10 billion, and large cap stocks as having a capitalization of between $10 billion and $200 billion. To summarize it in simple terms, large cap funds invest in big companies (less risky), mid cap funds invest in mid-size companies (medium risk), and small cap funds invest in relatively small companies (higher risk).

This concludes our brief overview on fund types. There are several other fund types in the world of mutual funds, and we’ve not touched on them here. Part of the reason is that if we outlined each and every available specific fund type, this article would be a LOT longer than you’d probably care to read. Also, it’s not really necessary for us to hit each one of them, as many of them don’t really pertain to what you’ll see in our recommendations. For example, there is a wide variety of bond mutual funds out there, but we don’t recommend those very often – if we do, we’ll talk about them at the time they appear here. The bottom line is that you should have what you need now to be able to make sense of the allocations that appear on this site.

What makes your asset allocation selections so great?
The choices and philosophies outlined are our opinions, nothing more. That said, we’d like to think that our decades of experience in all aspects of the securities industry…trading, compliance, customer service, publishing…on behalf of both investment advisory and securities brokerage firms, counts for something. Still, there remains a wide variety of investment options, philosophies to wealth-building, and investment temperaments, and we in no way would suggest that our ideas are a great match for everyone out there…which brings us to our last topic…
The Disclaimer
Every wise investment professional that makes general asset allocation recommendations has one of these, and we have one, too, to help clarify what’s going on here for the person who is absolutely convinced we’re speaking to him or her personally. Here’s ours: These asset allocation models are not, nor should be construed as, specific investment recommendations for you. We do not know you. We do not know your specific investment objectives, goals, dreams, or anything else. The only exception to the aforementioned is IF you are a full-fledged client of Stock Market Income Advisors, Inc. How do you know if you are? You will have met with us either in person or over the phone, completed (and signed) our Confidential Profile as well as our Investment Advisory Agreement, and received back copies of each document with our execution signatures. Anything short of that, and you are not a client of Stock Market Income Advisors, Inc., which means you will not be receiving specific investment advice from us. Furthermore, these monthly asset allocation offerings, as well as the information contained throughout this section herein, are provided as general information only, and should not be construed by anyone who reads any of the information provided by us to Christian Money.com as a solicitation to effect, or attempt to effect, transactions in securities, or the rendering of personalized investment advice.

OK……now you’re ready to take a look at the asset allocation models that we’re pleased to provide to Christian Money.com as a service to its visitors. Best wishes!