Marshall B. Taylor has a lot riding on the stock market. When the 49-year-old got a large chunk of cash late last year after resigning as chief executive of Aviall Inc., a Dallas aircraft-maintenance company, he knew exactly what he wanted to do with it: invest in stocks.
That cash infusion helped double Taylor's stock portfolio to more than $1 million. He now has 90% of his portfolio in stocks, and the rest in bonds and cash. His goal: build up his net worth while deciding whether he wants to start a company or acquire one. He plans to use his investments to guarantee any debt taken on to finance a business.
BEATING THE INDEX. Growth is Taylor's investment focus. Between early February and mid-April, he and his broker at Rauscher Pierce Refsnes Inc. diversified his personal portfolio, which consisted largely of stock in Aviall's former parent company, Ryder System Inc., and four other large companies. He expanded his holdings to 30 stocks, with a heavy weighting in smaller, technology-related companies. "I know equities are high right now, but I felt there was still good opportunity in the market for growth stocks," he says.
Growth is also a theme in Taylor's retirement savings accounts. The bulk of his 401(k) money is in equity mutual funds. About 20% is in fixed-income investments.
Taylor has high expectations for his portfolio: He wants it to exceed the return on the Standard & Poor's 500-stock index. Many professional growth-oriented mutual-fund managers can't manage that feat. But so far this year, Taylor says his portfolio is beating the index.
A substantial market correction does not factor into Taylor's thinking. He doesn't expect the market to continue rising at such a torrid pace, but he doesn't expect a big crash, either, because he doesn't think the economy is overheated. If faced with a prolonged bear market, however, Taylor says he would probably shift some of his assets into cash.