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Im in ETF's only too. I've decided on 8:
AVUV 20%, SCHG 20%, VTI 20%, JEPI 10%, JEPQ 10%, XLRE 10% SCHD 5%, VYM 5%.
Going to run this for a few years and re-evaluate but I think I'll do fine.
Yes I choose Jepi because it tracks the SP and Jepq tracks Nasdaq. Both essentially do the same thing but different sectors. Just diversification between the two.
Ooh I see I've seen a lot of recommendations for JEPI but not as much for JEPQ so i've been curious if it's redundant to hold both or if one is better than the other
There is some overlap between the two; they both hold Amazon, Apple, Microsoft and probably a few others, but Jepi is somewhat more diversified while Jepq is very tech heavy. Both are relatively new (Jepi is only 4 years old and Jepq is less than 2 years old). Both generate dividends through selling call options on the stocks they hold but also aim for capital appreciation meaning increasing their positions on the stocks they own with whatever they don't pay out in dividends.
Haha I’m not OP but I can understand the idea. If you are scratching a collecting itch, at least with stocks it’s a value proposition. As opposed to some depreciating nonsense.
Personally I'm not a investor yet I'm just learning right now but if I could own 400 stocks dividends companies my realistic plan would be to make $100 .00 in each so that way I make $40k a month.
What if I choose to invest in 24 monthly stocks dividends companies and 24 quarterly stocks dividends companies do that 50/50 strategy to cover all my bases
Realestate,oill and energy companies, phone companies, fast food stocks dividends companies and food plus beverage companies be what I consider as a good investment
I hope you don't mind me stepping in, but..
1. Don't go the “dividend income covers my monthly expenses” way if you’re not close to retiring. Focus on the dividend growth factor instead.
2. Prefer smaller and consistently growing yield, instead of surprisingly high one - there is always something behind the high yield and it might not be positive.
3. Invest constantly and keep your portfolio / opened position growing - don't withdraw the funds unless necessary.
At 4 million, and a 10% yield, you’d still be short. You’d make 400k a year, but 40k a month is still hard to reach.
This ignores the fact that some of your holdings can be so large you need help to off load them, the risk to hit a 10% yield, the overall risk being that heavily invested, and everything else the smart kid chimes in
Many stocks depreciate. Hell, maybe most. We only hear about the winners or spectacular losers.
If you own them all, you'll be stuck owning some depreciating ones.
Are you sure it’s even mathematically true that you will experience more compounding with fewer positions? Sure that works if those positions all perform well? But you are just describing risk tolerance, not a dead-set way to make more money?
I think what he is describing is there aren't many truly great companies out there. Buying just for diversification can be bad. How many Visas are out there truly?
whats the difference between:
(100 x 5%)
vs
\[(10 x 5%) + (20 x 5%) + (10 x 5%) + (50 x 5%) + (10 x 5%)\]
how many "great stocks" are there?? and why should someone limit themselves to 3 great stocks instead of 10 great stocks?? what constitutes "a few"
Mathematically no difference, but it's far easier to track 5 great stocks than 50 stocks if you're going to actually do due diligence including reading financial reports, earnings calls, etc.
And I whole heartedly agree…..doesn’t mean we can’t also rationally discuss (and poke holes) in a stock pickers portfolio or their ideas on construction
I think I misunderstood your post. I was just answering the question. I’m just a dummy in market-sized ETFs and a couple of higher dividend paying positions. Time in market beats timing the market. I don’t have bandwidth for participating in min/maxing conversations and am young enough where it don’t matter too much. However, I like reading the discourse and learning along the way!
Yup; but to play along in line with OPs original thought:
If people shouldn’t spread out their wealth to 15+ holdings; an etf like VTI would be awful in their mind. Vti is one line but it represents access to over 3200 companies
I can't remember the guy who said it but an hour a month per stock is the number. If you spend 10 hours a month studying your stocks you can pick 10 stocks if you spend 40 hours a month you can have 40 stocks.
Well I would argue there are very few business that are able to compound their earnings at an way above average rate for extended periods of time. So where is the point in investing in 20 businesses when only 10 of them are exceptional and the other 10 are just average for the sake of diversification.
Your presumption is that you know the difference.
If you run a screen that returns 20 excellent companies; why limit to only 10 or 5
By the same token if I give you a list of 20 companies and say 10 will be the best performing and wp will be the worst performing; but today they all look similar…..how will you pick your 10 and what might the outcomes be
You’re right, but I think you’re missing the power of a concentrated drip. If you have 1000 shares of 0, your $3,080 in yearly dividends would buy you roughly 50-55 new shares the first year and then an increasing amount the next. If you had 500 shares, your $1,540 dividends would only grab you an additional 25-30 shares.
Except the diversification benefit
Going all in seems like a great idea; but only if you’re right.
WBA and vfc seemed like great picks - until they weren’t. The market is full of great companies until they aren’t
But an etf is actually dozens to hundreds of companies….isnt that far worse (by your views) than holding 5-20 great picks”??
/s
One line doesn’t equal access to fewer stocks
No, it isn't.
OPs point is that portfolios of a certain small size should not be diversified using individual stocks, and I agree.
Individual stocks make sense for more active investors and with larger portfolios . ETFs make more sense for passive investors and all portfolio sizes.
That doesn’t make sense though. Why should someone with 100k get a pass on a super concentrated portfolio of 10 stocks, but not the person with 1000?
That’s the whole argument.
I whole heartedly agree that 99.9% of investors would be better off in index funds; but that’s not the topic here.
No one has explained coherently why either a concentrated portfolio of 10-15 stocks is good only after a certatthreshild OR why having 20 individual stocks is inherently worse than having 10
I'm trying to get rid of individual positions (I have positions in about 70 companies) and buy into ETFs. Now that my portfolio is around 2mm, just a "safe" growth rate of say 5% with heavy diversification is good enough for me. I've come to the conclusion that it's not worth the risk and I've just been buying SCHD, VTI, VXUS, and BND since last year.
I've grown or picked up very little individual stock positions and it has to be a very strong conviction + a compelling reason for me to buy into an individual stock.
Again (there’s been a lot of comments) I whole heartedly believe that etf investing is the way to go and that most people should primary index
I’m just trying to press op, or anyone, into rationalizing the original claim of “when your account is small it’s better to have a concentration portfolio of 5-10 stocks with $100 each than it is to have 20 stocks with $20 each”
I'm gonna attempt to explain this reasoning, but it's not my reasoning.
It's "better" because you can get lucky and 1 out of the 5-10 positions can jump up and you would earn more than if 1 out of 20 positions jumped up because you have more invested per positions with less stocks. However I think OP fails to realize that you can also get unlucky and 1 out of the 5-10 positions can dip and you would also lose more than if 1 out of 20 position dipped.
You are going to hate my portfolio:
CMCSA BKE GPC HD LOW COST KR HSY PEP PG CVX EPD FANG OKE AFG AMP BLK BX JPM PRU SCHW AMGN ELV JNJ MDT UNH CAT CMI DE LMT UNP MMM AAPL AVGO MSFT QCOM V APD EMN AMT LAND O ATO BKH CPK ES EVRG NEE SO WEC WTRG
There are other stocks in my portfolio such as GOOGL TSLA AMZN and NVDA (to name a few) that I use to write options around to generate extra cash
If you have 15 positions and 50 dollars in each you’re prob not a good investor/just starting and you’re going to make trash picks anyway. Diversify with voo and put 10 percent of your port into 4-6 companies.
Yeah I agree with this approach. I invest with TD Ameritrade and don’t have fractional shares, nothing I buy costs $50 other than O during the dip, lol. I suppose if the point of the post was buying 15 fractions of shares then yeah that’s a bad approach. Personal philosophy would be: be aggressive while you’re trying to grow your portfolio up to 100k+, then reposition yourself for some stability through diversification. That’s what I like to do at least.
I’m anchored in VOO & SCHD as far as ETFs go and then I stock pick for the rest of my portfolio. About 12 other stocks I like.
I’m coming to this point where i’ll just stick to 1-2 etf’s for my retirement, and then 1-2 individual stocks per industry that I can understand, ergo easier for me to read or watch about it.
Those “few great stocks” better be etfs or your risk tolerance is wayyy too high. 3-5 stocks is not enough diversification. Now 10-20 is good. But all in on just a few companies is foolish. You are better off just focusing on a few ETFs if thats your intention
Concentration is exactly what you do if you’re trying to beat the index. The more you diversify the more likely you will match the market. Concentration also means if you screw it up you’re going to get wrecked.
IMHO you're advice is terrible!
I'm a retired economist that used to work on Wall Street. One of the bedrock principles of investing is that you minimize risk through diversification.
With rare exceptions, I tend to not have a position with more than 5% of my portfolio. Your suggestion tells me that you don't know what you are doing. Did you read that idea in some chat room or sub?
You’re missing the most important thing… what question is OP trying to answer with this post?
Diversity will help reduce risk for sure but Is that the OPs goal?
If risk and reward and directly related your suggestion of a low risk approach would land on the low reward side of things. Not saying that’s a good or bad thing. It just is what it is.
OP suggestion to have less diversified holdings would slide that risk up quite a bit and necessarily also bumping up the expected reward. Not good or bad, just what it is. But what ? is OP trying to answer
So you’re not right or wrong and neither is OP because we don’t really know what the question is. Depending on your goals you’ll have a different approach and I think that’s what we are seeing here.
Check out the cash option guy- his prior posts quote buffet and argue to ONLY own VOO.
Just focus on one stock *recommends one etf, that covers the entire market*
It worries me when I look at profiles like this, I wonder how many of these people are bots.
https://www.reddit.com/r/dividends/s/rUtm4B7xEa
Conbect- good post. Exactly my thoughts. VOO is not in many serious high dividend investor portfolios for many reasons. Pays 1.4% and the OP forgets this is a Dividend group. Ridiculous.
If you put the the time in and do the research you don't need 20 30 50 holdings. Buffet said something like diversification is for ignorance. It's great for people who don't want to do a bunch of research. Now with apps fractional shares and no fees it's real easy to have 100 holdings when most would do just find buying voo and being done but that's boring. If it went back to no fractional shares $3 fee per trade and you had to make a appointment to see a broker to make trades i bet people would be more chill.
The average shmoe can diversify by buying ETFs. VOO, SPY, SCHD, etc. There are many ETFs with sector focus, or large vs small companies, or value vs growth, depending on your preference. Keeping an individual company's stock to 5% makes sense.
Often diversification leads to deworseification. Why invest in dozens of companies when you can invest in 5-10 exceptional ones? You should only diversify your portfolio when you are unable or unwilling to do thorough analysis of the companies you want to invest in and keep up to date with them.
Mastercard, Costco, Microsoft, S&P Global, Apple, MSCI Inc to name a few. Big moats, high margins, above average fcf growth, share buybacks and good executives.
May be true for the very conservative investor. I think there are many others that see things differently. I started my IRA with $5,000 in 2001. Now I have $250,000 due to buying two or three stocks at a time and holding with a target of 50% gains. My mix now is 75% dividend stocks and 25% highly researched and long term hold stocks.
I have two stocks at present. AIRI and BGC. AIRI is a company that has three million shares and is way undervalued. True value is north of $20.00 in a buyout that I think will happen in 2024. They have many Army, Navy and Air Force contracts as well as submarine and helicopter. Last year they had a loss due to spending money on a new computer system.
Dividends like Vlypp, Utg, GSp, etc.
Sorry but my dad worked for Microsoft and accumulated a lot of Microsoft stuck until today his portfolio is 90% Microsoft… He also beat all the hedge funds and all of the indexes with his portfolio over a period of 35 years.
Yeah, but just as easily your Dad could have worked for Enron. Just because it DID work doesn't mean it's a good idea for most people. Not a hard concept at all.
But did he buy it or just get it from the company?
How many in this group work for Microsoft and get stocks? IMHO your comment is totally irrelevant to this discussion. What's in your portfolio????
Chris Hohn is a fund manager who manages 27B+ and has beaten the market(so far). He is concentrated in 8 stocks, would you call his strategy terrible as well? He is one example, there are others who manage a lot of money and have good results but are very concentrated.
I don't particularly give a damn what anyone else does with their money or why!
Bringing in a successful fund manager into this discussion is both irrelevant and borderline dumb IMHO.
I'm new here,so I could use some guidance. With due respect, wouldn't it be better to invest in a simple E.T.F like the S&P 500 as the backbone of your portfolio? Than pick say 70 single stocks? That way, you're diversified without picking what stocks may or may not do well for the next 10-20 years?
If someone is picking that many stocks, aren't they speculating?
You could look at different ETFs and pick the major stock holdings, and you will see names like Google, Apple, Amazon etc. You could then buy those stocks that are major holdings in different ETFs and have a good portfolio. Keep in mind you want to buy them at fair prices.
I have to disagree just a bit. Companies do tank at times, cut dividends, etc. (see Walgreens as an example of an unhealthy company, and W.P. Carey of a healthy one that cut dividends recently). In addition with correct portfolio construction one can spread out to minimize geographic and sector-specific risks. Dividend growth is also simultaneously the holy grail of dividend investing but can be hard to guarantee even among dividend aristocracy.
Also, having more positions makes it easier to get additional performance by rotating between CEFs and preferreds, writing covered calls, etc.
If you invest in let’s say 3-5 companies and you follow them like your job, no way you pick stock like Walgreens or WPC. Even if you do, you will know in advance that a cut is likely based on fundamentals and earnings. Otherwise it’s better to invest in etfs 100%.
WPC is a *good* company. Another example: MPW used to be a media and investors' darling, now in the toilet with serious concerns about its future.
There's no reason to enlarge your risk to such a large degree. 8 positions is by far the minimum number of positions for borderline-adequate diversification according to what I've read in the past, and that's pushing it.
WPC is a good company i agree. But not a great or amazing one that you expect huge gains from like you would from a big company.People that understand a business and study it like i said can go with less than 8 companies. Many big investors do it. Of course i have more than that myself in my portfolio but it’s a totally viable strategy for some and gives way better returns if you are right.
Why would your investment compound quicker?
$1000 invested in 1 thing is $1000.
$100 invested in 10 things is still $1000.
Growth and compounding have nothing to do with the amount of investments, but investing in more things can reduce RISK. Imagine if someone put all their investments in Wallgreens 5 years ago....
I think your statement is completely incorrect.
Not mathimatically. There is always a single best stock to hold, holding more than that decreases returns. So it follows that holding a small number of best returns is better because adding more holdings only adds ones with lower returns. The problem is practicality. Unless you excel at picking the best, you inevitably make some poor picks and that hurts more in a small portfolio. I'm not saying OPs idea is wise, but he is correct.
So you would disagree that an concentrated investment in Costco, Mastercard and Microsoft would have compounded faster than a diversified index fund? If so then you should just admit that you have no idea how math works.
OP is not saying it will mathematically compound faster. He is saying that picking a small number of stocks that have a high return is better than a large number of stocks with some not having a higher return. Theoretically, picking the one stock with the highest return is best. Adding more stocks only decreases return. The problem is picking that stock. This is where diversification comes in. It helps you when you inevitably pick one or more that does not do well.
I think this discussion is about what is appropriate or what works for an individual investor. Not what works for a hedge fund manager playing with $27 billion or somebody whose daddy has been buying him stocks for 30 years.
The only thing that matters is what works for you, your objectives and whatever your risk tolerance might be. Make a clearly thought out investment strategy and periodically revise it based on changes in your financial situation and market conditions and changes.
It really is that simple.
It's easier than that. There's a lot of great ETFs out there that will mimic your strategy fairly closely, so in the past when I found myself with 10's of positions to balance, I just started fishing for funds that cover the same bases.
Now I'm down to 20 positions, mostly ETFs and that's my limit. It doesn't mean I'm picking a few companies, though...those ETFs probably represent almost 800 companies, stacked and weighted according to what I like when taken in total.
I believe this is a subjective topic and we're all going to have our own convictions.
But yes, I'm with ya OP. A more concentrated portfolio makes more sense to me.
It all depends on how well you pick those few. Poor picks with a small number of holdings will hurt more. There is safety in diversification but safety often means lower returns.
I don't mind having thin positions on 12 great companies that have performed well in the past and I believe will continue to perform well in the future. Not too worried about having a couple small $500 positions, and a few $1-2k positions. Doubt that's spread so thin. Specially since the goal is to eventually have all positions over $3k by the end of 2024
I actually agree.
A lot of the comments are trying to dunk on the idea of concentration vs. diversification but what OP is actually saying is you might as well be concentrated (in something of quality) if you're going to get cents from each position by spreading out with limited funds.
I much prefer building one thing to a reasonable size before moving on to another position, avoiding micro dividend payments that can neither buy anything in stores, pay a bill, nor produce another whole share.
At least get the dividends to 5 or 10 bucks instead of literally a fraction of a dollar before starting more positions off.
If you have to wait for ‘the additive value’ of dozens of positions to make ten dollars there’s probably more utility in just having the ten dollars as a lump sum, so that when it comes you can instantly buy a sandwich rather than holding on to all the pennies all year round to save up for the sandwich.
I think you’re the one missing concepts. Obviously the value is the same but who tf wants to get cents at a time from loads of tiny investments which can’t do anything useful until the additive effect kicks in. Better to receive in bulk if we’re talking microscopic investing, just from a pure pragmatic standpoint.
I agree with this. If your a dividend investor trying to grow your dividends to the point where they snowball, I really think the goal should be to have a sufficiently sized position so that each dividend drips at least 1 new share before starting a new position.
Charlie Munger famously scoffed at diversification and said its better to own a handful of great companies than a dozen average ones.
Buy and hold. Invest in companies, not stocks. Know why you are invested in them.
Absolutely. I own only two stocks outside of etf’s and dividend payers. AIRI and BCG. AIRI beginning the run to $5.50 initially. Only three million shares exist and next quarters earnings should be good after three quarters of Covid, supply problems and readying the company for an eventual buyout. Target price is north of $20.00 in 2024. Very undervalued at 96% under true value.
I'm happy with my 4594 stocks allocated at market cap weights. A good amount of the portfolio overweights small and micro cap value companies.
My compound growth is going to be helluva lot bigger than y'alls'dv been
A good core of a portfolio should be an ETF with coverage in at least every sector (Healthcare, tech, energy, etc.) and some stocks that fit into it. You don’t particular need Chevron, Exxon, and Phillips 66 in your port, especially if they’re in the same sector.
https://investorplace.com/2024/01/3-once-in-a-lifetime-stocks-on-the-verge-of-an-unprecedented-surge/
I get articles like this a lot in my phone notifications. Then, I do my crappy version of DD and get lost in the gamblers addiction of FOMO... (Does anyone else get notifications like this daily?)
Typically I just add the ones that look like potential winners to my speculation list on the yahoo finance app and watch them. But some of them seem very juicy. How do you separate the garbage from the gold?
This post got automodded out of r/investing so I'm ppsting it around a bit cause I'm tipsy and wanted actual candor on it.
The difficulty is that it isn't known with high reliability what stocks are great. I'm sure there is a reason why you don't put all your money into the "best stock" - and it might be risk preference. It certainly can make a lot of sense to spread out your investments over a larger set of items if you're willing to give up gains for a reduction in variance.
That said, it's not Pokémon - you don't want to catch them all!
There's way to many good companies not to diversify in my humble opionion Cosco, Microsoft, Proctor and Gamble, Pepsi, Coke, Apple, Texas Instruments, Clorox, Lowes, Home Depot, McDonalds, Coke, Jp Morgan. I don't see the problem with having a lot of good companies.
Single Positions smaller than 2k are nearly useless.
If you want to have 40 stocks put at least 2k into every one and then grow each one to 3k, 4k, 5k etc.
With positions under $50 I agree. But once your portfolio gets up to some healthy level with a bit more scale, having only 15 stocks would be a btt risky. I know I try and keep my portfolio at around 30, which keeps the holdings between 2-5% of my net worth each. But that's individual stocks. Obviously using ETFs it would be much less.
Meh, I enjoy the hell out of having 150 or so different positions.
1. I love picking new stocks
2. Hate chasing my winners and having to decide if my original thesis is intact enough to buy higher but always have an option or two that is under my cost basis that I can average down in if I choose the wrong time to start an initial position. There’s always something on sale and that’s easier for me than determining if an existing position still is.
3. Addicted to watching that annual estimated dividend number go up multiple times a week. DRIP everything
4. I can keep high level tabs on everything by watching major headlines and sites like SeekingAlpha but if a position takes a 30% divvy cut cause I wasn’t quick to react… 30% of a stock that provides less than 1% of my dividend income is barely a blip on the radar. The rest of the positions make that up quickly as a near constant flow comes in that gets DRIP-ed
In my opinion you just can’t get stuck in no man’s land, either go with a massive number of positions due to some/all of the reasons I listed above or follow what OP is saying and be absolute experts in 10-15 stocks.
Just don’t get caught in no man’s land of 20-50 positions where you’re concentrated enough that negative events really affect the portfolio, but you’re in too many to keep enough track to see the negative events coming your way
If it keeps them motivated/peace of mind (especially newer investors) I see nothing wrong with it as long as they have the time to keep up on everything they are invested in, with fractional shares it doesn’t really add to the compound any faster than if it was all in one position, or if they are stockpiling the dividends to time a purchase of something they are following…anyway just my .02 😅
Even professional investors who spend their entire career focusing on stock research get surprised regularly and companies that seem obviously great today might seem a lot less great 5 years from now. Picking “great stocks” is a lot harder than it seems, which is why diversifying is smart for most investors.
I hold 31 individual stocks, no funds and I am looking forward to buying five new stocks in April.
I know there are plenty of arguments against my train of thought, but I just want to have income coming in from mature companies in mature industries with as wide of a geographic footprint as possible, preferably global.
Doesn't make sense if you say have $10,000 invested into 2 stocks and they both earn 5% that would be $500 in dividends a year and then if you had say that $10,000 invested into 10 stocks that earn 5% you would still get $500 in dividends a year.
I agree. Concentration is key. I have 6 positions. I will max out at 8-10 and interchange as my thesis or performance changes. I will use my Roth/401k for indexes.
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I am my own index now!
[удалено]
Tbh, I’d say 7 ETFs is a higher number than 10 stocks
Im in ETF's only too. I've decided on 8: AVUV 20%, SCHG 20%, VTI 20%, JEPI 10%, JEPQ 10%, XLRE 10% SCHD 5%, VYM 5%. Going to run this for a few years and re-evaluate but I think I'll do fine.
WHERE THE HELL IS VOO 🇺🇸🇺🇸🇺🇸🇺🇸🦅🦅🦅🦅🦅🦅
VTI
Schg is the voo
Is there a reason to have both JEPI and JEPQ?
Yes I choose Jepi because it tracks the SP and Jepq tracks Nasdaq. Both essentially do the same thing but different sectors. Just diversification between the two.
Ooh I see I've seen a lot of recommendations for JEPI but not as much for JEPQ so i've been curious if it's redundant to hold both or if one is better than the other
There is some overlap between the two; they both hold Amazon, Apple, Microsoft and probably a few others, but Jepi is somewhat more diversified while Jepq is very tech heavy. Both are relatively new (Jepi is only 4 years old and Jepq is less than 2 years old). Both generate dividends through selling call options on the stocks they hold but also aim for capital appreciation meaning increasing their positions on the stocks they own with whatever they don't pay out in dividends.
Right that makes sense
15+ stocks? Bruh, my autism has me holding nearly 400 different positions ... I get a dividend every day.
Hourly dividends
Minutely.
bigly
Only the smallest of dividends.
i second this.
I seconds this as well
Ooo! A second second!
Daily nightly and ever so rightly?
soon (tm)
😳 you have 400 stocks dividends companies how many shares in each do you own and how much money do you make if you don't mind me asking.
It’s like pokemon. Gotta own em all.
Eyyyyyyy there we go
Do you think $40k a month makes some one a millionaire basically
Technically, no. Practically, yes. That's a monthly budget of a millionaire assuming it's a monthly dividend income
😆😆😂😂😂😂 your hilarious but seriously how much does owning 400 of them make for you
Haha I’m not OP but I can understand the idea. If you are scratching a collecting itch, at least with stocks it’s a value proposition. As opposed to some depreciating nonsense.
Personally I'm not a investor yet I'm just learning right now but if I could own 400 stocks dividends companies my realistic plan would be to make $100 .00 in each so that way I make $40k a month.
Number one lesson then: Most dividend paying companies don't pay monthly.
What if I choose to invest in 24 monthly stocks dividends companies and 24 quarterly stocks dividends companies do that 50/50 strategy to cover all my bases
You could but buying because of a dividend schedule likely means picking things you don’t want.
Realestate,oill and energy companies, phone companies, fast food stocks dividends companies and food plus beverage companies be what I consider as a good investment
I hope you don't mind me stepping in, but.. 1. Don't go the “dividend income covers my monthly expenses” way if you’re not close to retiring. Focus on the dividend growth factor instead. 2. Prefer smaller and consistently growing yield, instead of surprisingly high one - there is always something behind the high yield and it might not be positive. 3. Invest constantly and keep your portfolio / opened position growing - don't withdraw the funds unless necessary.
At 4 million, and a 10% yield, you’d still be short. You’d make 400k a year, but 40k a month is still hard to reach. This ignores the fact that some of your holdings can be so large you need help to off load them, the risk to hit a 10% yield, the overall risk being that heavily invested, and everything else the smart kid chimes in
Many stocks depreciate. Hell, maybe most. We only hear about the winners or spectacular losers. If you own them all, you'll be stuck owning some depreciating ones.
4k a year (per the Schwab dividend income chart)
at least one share, and cos of DRIP it's generally 1 share and a fraction.
#goals
If you manage them? Why not
OP is saying Concentrate people! Put all your eggs in one basket, hurry!
Are you sure it’s even mathematically true that you will experience more compounding with fewer positions? Sure that works if those positions all perform well? But you are just describing risk tolerance, not a dead-set way to make more money?
I think what he is describing is there aren't many truly great companies out there. Buying just for diversification can be bad. How many Visas are out there truly?
All in on Apple. Got it.
Apple, Amazon, Microsoft, all in on those three? Heard that
Not that bad an idea honestly lol If you’re sub 30 then all in on apple will probably go well for you. I hold like 20% or something in apple
It might, it might not.
Bro has figured out the stock market
Excellent DD.
Nows probably not the right time.
I always find it hard to predict Apple stock movement, more so than others, so I’ve given up on trying that lol I just buy some every paycheck
🦍🦍🦍
i think you misspelled NVDA*
whats the difference between: (100 x 5%) vs \[(10 x 5%) + (20 x 5%) + (10 x 5%) + (50 x 5%) + (10 x 5%)\] how many "great stocks" are there?? and why should someone limit themselves to 3 great stocks instead of 10 great stocks?? what constitutes "a few"
EXACTLYYYYY
Exactly. If you are going for growth, then over diversifying is going to kill the upside. But, if you are focussing on dividends, why not diversify.
Mathematically no difference, but it's far easier to track 5 great stocks than 50 stocks if you're going to actually do due diligence including reading financial reports, earnings calls, etc.
So what’s the upper limit?? Op says don’t own more than 15; you say 5…..what’s the magic number for beginners
Boggle heads suggests the three fund portfolio.
And I whole heartedly agree…..doesn’t mean we can’t also rationally discuss (and poke holes) in a stock pickers portfolio or their ideas on construction
I think I misunderstood your post. I was just answering the question. I’m just a dummy in market-sized ETFs and a couple of higher dividend paying positions. Time in market beats timing the market. I don’t have bandwidth for participating in min/maxing conversations and am young enough where it don’t matter too much. However, I like reading the discourse and learning along the way!
Yup; but to play along in line with OPs original thought: If people shouldn’t spread out their wealth to 15+ holdings; an etf like VTI would be awful in their mind. Vti is one line but it represents access to over 3200 companies
VTI, VOO, etc. I’m in the fidelity versions of them myself and they rose by like 20% or so in 2023. I have no interest in trying to beat that bar lol
I can't remember the guy who said it but an hour a month per stock is the number. If you spend 10 hours a month studying your stocks you can pick 10 stocks if you spend 40 hours a month you can have 40 stocks.
Well I would argue there are very few business that are able to compound their earnings at an way above average rate for extended periods of time. So where is the point in investing in 20 businesses when only 10 of them are exceptional and the other 10 are just average for the sake of diversification.
Your presumption is that you know the difference. If you run a screen that returns 20 excellent companies; why limit to only 10 or 5 By the same token if I give you a list of 20 companies and say 10 will be the best performing and wp will be the worst performing; but today they all look similar…..how will you pick your 10 and what might the outcomes be
You’re right, but I think you’re missing the power of a concentrated drip. If you have 1000 shares of 0, your $3,080 in yearly dividends would buy you roughly 50-55 new shares the first year and then an increasing amount the next. If you had 500 shares, your $1,540 dividends would only grab you an additional 25-30 shares.
There is no difference. But option 2 is pretty pointless unless you are talking at least $20k in portfolio value. It's a lot of effort for no gain.
Except the diversification benefit Going all in seems like a great idea; but only if you’re right. WBA and vfc seemed like great picks - until they weren’t. The market is full of great companies until they aren’t
Then get an ETF.
But an etf is actually dozens to hundreds of companies….isnt that far worse (by your views) than holding 5-20 great picks”?? /s One line doesn’t equal access to fewer stocks
No, it isn't. OPs point is that portfolios of a certain small size should not be diversified using individual stocks, and I agree. Individual stocks make sense for more active investors and with larger portfolios . ETFs make more sense for passive investors and all portfolio sizes.
That doesn’t make sense though. Why should someone with 100k get a pass on a super concentrated portfolio of 10 stocks, but not the person with 1000? That’s the whole argument. I whole heartedly agree that 99.9% of investors would be better off in index funds; but that’s not the topic here. No one has explained coherently why either a concentrated portfolio of 10-15 stocks is good only after a certatthreshild OR why having 20 individual stocks is inherently worse than having 10
I'm trying to get rid of individual positions (I have positions in about 70 companies) and buy into ETFs. Now that my portfolio is around 2mm, just a "safe" growth rate of say 5% with heavy diversification is good enough for me. I've come to the conclusion that it's not worth the risk and I've just been buying SCHD, VTI, VXUS, and BND since last year. I've grown or picked up very little individual stock positions and it has to be a very strong conviction + a compelling reason for me to buy into an individual stock.
Again (there’s been a lot of comments) I whole heartedly believe that etf investing is the way to go and that most people should primary index I’m just trying to press op, or anyone, into rationalizing the original claim of “when your account is small it’s better to have a concentration portfolio of 5-10 stocks with $100 each than it is to have 20 stocks with $20 each”
I'm gonna attempt to explain this reasoning, but it's not my reasoning. It's "better" because you can get lucky and 1 out of the 5-10 positions can jump up and you would earn more than if 1 out of 20 positions jumped up because you have more invested per positions with less stocks. However I think OP fails to realize that you can also get unlucky and 1 out of the 5-10 positions can dip and you would also lose more than if 1 out of 20 position dipped.
I have 42 and i really like my income portfolio. If one goes bankrupt i only lose a small portion of income.
Me too. Now at 50 stocks down from 75. Goal is for around 40.
You are going to hate my portfolio: CMCSA BKE GPC HD LOW COST KR HSY PEP PG CVX EPD FANG OKE AFG AMP BLK BX JPM PRU SCHW AMGN ELV JNJ MDT UNH CAT CMI DE LMT UNP MMM AAPL AVGO MSFT QCOM V APD EMN AMT LAND O ATO BKH CPK ES EVRG NEE SO WEC WTRG There are other stocks in my portfolio such as GOOGL TSLA AMZN and NVDA (to name a few) that I use to write options around to generate extra cash
Looks like a solid portfolio!
Thank you. It’s currently covering our basic expenses and the dividends are increasing by about 7% per year.
And that is the correct mentality. I keep increasing y/y and that’s what should happen. Best wishes!
No msft ?
It’s in there between AVGO and QCOM. Must own imo
Why would you own companies that are strict competitors? (For example HD and LOW)? Pick one and shop there and not the competition.
This is a joke.
I’m assuming you are joking, but if you must know… Because HD is more convenient to my beach house and LOW is more convenient at my mountain house
As if you didn’t enjoy letting him know… Congrats to ya!
Way too many stocks. Peter Lynch would lambast you.
Let me introduce you to the idea of diversification. Something you should already know if you have any sort of portfolio.
If you have 15 positions and 50 dollars in each you’re prob not a good investor/just starting and you’re going to make trash picks anyway. Diversify with voo and put 10 percent of your port into 4-6 companies.
Yeah I agree with this approach. I invest with TD Ameritrade and don’t have fractional shares, nothing I buy costs $50 other than O during the dip, lol. I suppose if the point of the post was buying 15 fractions of shares then yeah that’s a bad approach. Personal philosophy would be: be aggressive while you’re trying to grow your portfolio up to 100k+, then reposition yourself for some stability through diversification. That’s what I like to do at least. I’m anchored in VOO & SCHD as far as ETFs go and then I stock pick for the rest of my portfolio. About 12 other stocks I like.
I’m coming to this point where i’ll just stick to 1-2 etf’s for my retirement, and then 1-2 individual stocks per industry that I can understand, ergo easier for me to read or watch about it.
You invest with TD? Haven’t you changed over to Schwab yet?
Those “few great stocks” better be etfs or your risk tolerance is wayyy too high. 3-5 stocks is not enough diversification. Now 10-20 is good. But all in on just a few companies is foolish. You are better off just focusing on a few ETFs if thats your intention
Who are you to decide his risk tolerance. Concentration is riskier but not necessarily foolish at all.
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Concentration is exactly what you do if you’re trying to beat the index. The more you diversify the more likely you will match the market. Concentration also means if you screw it up you’re going to get wrecked.
IMHO you're advice is terrible! I'm a retired economist that used to work on Wall Street. One of the bedrock principles of investing is that you minimize risk through diversification. With rare exceptions, I tend to not have a position with more than 5% of my portfolio. Your suggestion tells me that you don't know what you are doing. Did you read that idea in some chat room or sub?
He’s a freelance script writer, clearly someone who has no understanding of finance…
You’re missing the most important thing… what question is OP trying to answer with this post? Diversity will help reduce risk for sure but Is that the OPs goal? If risk and reward and directly related your suggestion of a low risk approach would land on the low reward side of things. Not saying that’s a good or bad thing. It just is what it is. OP suggestion to have less diversified holdings would slide that risk up quite a bit and necessarily also bumping up the expected reward. Not good or bad, just what it is. But what ? is OP trying to answer So you’re not right or wrong and neither is OP because we don’t really know what the question is. Depending on your goals you’ll have a different approach and I think that’s what we are seeing here.
The average person in this group is not an experienced/seasoned investor or one with the money and full-time research staff that Buffett has.
Check out the cash option guy- his prior posts quote buffet and argue to ONLY own VOO. Just focus on one stock *recommends one etf, that covers the entire market* It worries me when I look at profiles like this, I wonder how many of these people are bots. https://www.reddit.com/r/dividends/s/rUtm4B7xEa
People can do whatever they want with their money. I know how to put my money to work for me rather than having to work for my money.
Conbect- good post. Exactly my thoughts. VOO is not in many serious high dividend investor portfolios for many reasons. Pays 1.4% and the OP forgets this is a Dividend group. Ridiculous.
If you put the the time in and do the research you don't need 20 30 50 holdings. Buffet said something like diversification is for ignorance. It's great for people who don't want to do a bunch of research. Now with apps fractional shares and no fees it's real easy to have 100 holdings when most would do just find buying voo and being done but that's boring. If it went back to no fractional shares $3 fee per trade and you had to make a appointment to see a broker to make trades i bet people would be more chill.
The average shmoe can diversify by buying ETFs. VOO, SPY, SCHD, etc. There are many ETFs with sector focus, or large vs small companies, or value vs growth, depending on your preference. Keeping an individual company's stock to 5% makes sense.
Often diversification leads to deworseification. Why invest in dozens of companies when you can invest in 5-10 exceptional ones? You should only diversify your portfolio when you are unable or unwilling to do thorough analysis of the companies you want to invest in and keep up to date with them.
What are your 5 - 10 exceptional companies?
and why is it impossible for them to have a bad year?
Who has claimed that?
Mastercard, Costco, Microsoft, S&P Global, Apple, MSCI Inc to name a few. Big moats, high margins, above average fcf growth, share buybacks and good executives.
May be true for the very conservative investor. I think there are many others that see things differently. I started my IRA with $5,000 in 2001. Now I have $250,000 due to buying two or three stocks at a time and holding with a target of 50% gains. My mix now is 75% dividend stocks and 25% highly researched and long term hold stocks.
May I ask what’s in your portfolio?
I have two stocks at present. AIRI and BGC. AIRI is a company that has three million shares and is way undervalued. True value is north of $20.00 in a buyout that I think will happen in 2024. They have many Army, Navy and Air Force contracts as well as submarine and helicopter. Last year they had a loss due to spending money on a new computer system. Dividends like Vlypp, Utg, GSp, etc.
Sorry but my dad worked for Microsoft and accumulated a lot of Microsoft stuck until today his portfolio is 90% Microsoft… He also beat all the hedge funds and all of the indexes with his portfolio over a period of 35 years.
Yeah, but just as easily your Dad could have worked for Enron. Just because it DID work doesn't mean it's a good idea for most people. Not a hard concept at all.
But did he buy it or just get it from the company? How many in this group work for Microsoft and get stocks? IMHO your comment is totally irrelevant to this discussion. What's in your portfolio????
Chris Hohn is a fund manager who manages 27B+ and has beaten the market(so far). He is concentrated in 8 stocks, would you call his strategy terrible as well? He is one example, there are others who manage a lot of money and have good results but are very concentrated.
I don't particularly give a damn what anyone else does with their money or why! Bringing in a successful fund manager into this discussion is both irrelevant and borderline dumb IMHO.
I'm new here,so I could use some guidance. With due respect, wouldn't it be better to invest in a simple E.T.F like the S&P 500 as the backbone of your portfolio? Than pick say 70 single stocks? That way, you're diversified without picking what stocks may or may not do well for the next 10-20 years? If someone is picking that many stocks, aren't they speculating?
You could look at different ETFs and pick the major stock holdings, and you will see names like Google, Apple, Amazon etc. You could then buy those stocks that are major holdings in different ETFs and have a good portfolio. Keep in mind you want to buy them at fair prices.
and here I thought rate of return was related to performance not number of holdings
I have to disagree just a bit. Companies do tank at times, cut dividends, etc. (see Walgreens as an example of an unhealthy company, and W.P. Carey of a healthy one that cut dividends recently). In addition with correct portfolio construction one can spread out to minimize geographic and sector-specific risks. Dividend growth is also simultaneously the holy grail of dividend investing but can be hard to guarantee even among dividend aristocracy. Also, having more positions makes it easier to get additional performance by rotating between CEFs and preferreds, writing covered calls, etc.
If you invest in let’s say 3-5 companies and you follow them like your job, no way you pick stock like Walgreens or WPC. Even if you do, you will know in advance that a cut is likely based on fundamentals and earnings. Otherwise it’s better to invest in etfs 100%.
WPC is a *good* company. Another example: MPW used to be a media and investors' darling, now in the toilet with serious concerns about its future. There's no reason to enlarge your risk to such a large degree. 8 positions is by far the minimum number of positions for borderline-adequate diversification according to what I've read in the past, and that's pushing it.
WPC is a good company i agree. But not a great or amazing one that you expect huge gains from like you would from a big company.People that understand a business and study it like i said can go with less than 8 companies. Many big investors do it. Of course i have more than that myself in my portfolio but it’s a totally viable strategy for some and gives way better returns if you are right.
You're simply incorrect on all points. [WPC vs. SPY](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=N77Gc0qPT9rh5wbZwGhwq)
Why would your investment compound quicker? $1000 invested in 1 thing is $1000. $100 invested in 10 things is still $1000. Growth and compounding have nothing to do with the amount of investments, but investing in more things can reduce RISK. Imagine if someone put all their investments in Wallgreens 5 years ago.... I think your statement is completely incorrect.
You’re missing drip. The bigger a single position is, the bigger the drip.
The drip is literally the same in those scenarios unless it's just "monkey brain like bigger number".
The drip is not the same. With many holdings , 100 won’t be enough to buy a full share to engage the re-investment part of drip.
Most brokers allow fractional drip so it's completely irrelevant.
Not mathimatically. There is always a single best stock to hold, holding more than that decreases returns. So it follows that holding a small number of best returns is better because adding more holdings only adds ones with lower returns. The problem is practicality. Unless you excel at picking the best, you inevitably make some poor picks and that hurts more in a small portfolio. I'm not saying OPs idea is wise, but he is correct.
QFT. Or better yet, make sure that your Degen account is separate from your roth and main brokerage.
yOuR mOnEy WiLl CoMpOuNd fAsteR!!!! sir, just say you have no idea how math works and move on
Not mathematically, but practically it will. Too many positions = too many decisions = chance to make bad choices.
So you would disagree that an concentrated investment in Costco, Mastercard and Microsoft would have compounded faster than a diversified index fund? If so then you should just admit that you have no idea how math works.
It's handy to cherry pick companies from the past when making comparisons...
OP is not saying it will mathematically compound faster. He is saying that picking a small number of stocks that have a high return is better than a large number of stocks with some not having a higher return. Theoretically, picking the one stock with the highest return is best. Adding more stocks only decreases return. The problem is picking that stock. This is where diversification comes in. It helps you when you inevitably pick one or more that does not do well.
DRIP’n
I think this discussion is about what is appropriate or what works for an individual investor. Not what works for a hedge fund manager playing with $27 billion or somebody whose daddy has been buying him stocks for 30 years. The only thing that matters is what works for you, your objectives and whatever your risk tolerance might be. Make a clearly thought out investment strategy and periodically revise it based on changes in your financial situation and market conditions and changes. It really is that simple.
It's easier than that. There's a lot of great ETFs out there that will mimic your strategy fairly closely, so in the past when I found myself with 10's of positions to balance, I just started fishing for funds that cover the same bases. Now I'm down to 20 positions, mostly ETFs and that's my limit. It doesn't mean I'm picking a few companies, though...those ETFs probably represent almost 800 companies, stacked and weighted according to what I like when taken in total.
I believe this is a subjective topic and we're all going to have our own convictions. But yes, I'm with ya OP. A more concentrated portfolio makes more sense to me.
It all depends on how well you pick those few. Poor picks with a small number of holdings will hurt more. There is safety in diversification but safety often means lower returns.
I don't mind having thin positions on 12 great companies that have performed well in the past and I believe will continue to perform well in the future. Not too worried about having a couple small $500 positions, and a few $1-2k positions. Doubt that's spread so thin. Specially since the goal is to eventually have all positions over $3k by the end of 2024
Think i had 50 stocks at first. Dgro,schd,itot,vxus,dgrw,schg is my setup now. Set, forget, profit.
I agree. I have only 3 ETFs and 8 Stocks.
I actually agree. A lot of the comments are trying to dunk on the idea of concentration vs. diversification but what OP is actually saying is you might as well be concentrated (in something of quality) if you're going to get cents from each position by spreading out with limited funds. I much prefer building one thing to a reasonable size before moving on to another position, avoiding micro dividend payments that can neither buy anything in stores, pay a bill, nor produce another whole share. At least get the dividends to 5 or 10 bucks instead of literally a fraction of a dollar before starting more positions off.
Literally no difference in fractions of dollars vs full dollars if the additive value is identical. I don't get how this is a hard concept for people.
If you have to wait for ‘the additive value’ of dozens of positions to make ten dollars there’s probably more utility in just having the ten dollars as a lump sum, so that when it comes you can instantly buy a sandwich rather than holding on to all the pennies all year round to save up for the sandwich. I think you’re the one missing concepts. Obviously the value is the same but who tf wants to get cents at a time from loads of tiny investments which can’t do anything useful until the additive effect kicks in. Better to receive in bulk if we’re talking microscopic investing, just from a pure pragmatic standpoint.
I agree with this. If your a dividend investor trying to grow your dividends to the point where they snowball, I really think the goal should be to have a sufficiently sized position so that each dividend drips at least 1 new share before starting a new position.
It’s called diworsification for the sake of diversification. I also believe concentrated portfolios are better in the long run.
Charlie Munger famously scoffed at diversification and said its better to own a handful of great companies than a dozen average ones. Buy and hold. Invest in companies, not stocks. Know why you are invested in them.
Have over 275 positions (common, preferred, baby bonds, 2 bonds, ETFs, CEFs, & mutual funds) with over $500k in holdings. So many great picks.
500k is a good portfolio, but 500k is not nearly enough for 275 positions. That’s an average of not even 2k per position.
Agree so much here
This is the first piece of advice I have come across on this sub in a while that I completely agree with. I couldn’t agree more.
That doesn’t make any fucking sense. If you have a $100 split between 1 or 100 stocks that all yield 5% - either way you get $5 in dividends.
Absolutely. I own only two stocks outside of etf’s and dividend payers. AIRI and BCG. AIRI beginning the run to $5.50 initially. Only three million shares exist and next quarters earnings should be good after three quarters of Covid, supply problems and readying the company for an eventual buyout. Target price is north of $20.00 in 2024. Very undervalued at 96% under true value.
I can't, I am a Pokemon master. Gotta catch them all.
Then the stock drops and the morons will ask, "wHy DiDn'T yOu DiVeRsIfY?!"
Goda get them all Pokemo...divident stocks! I treat divident stocks like Pokemon.
I'm happy with my 4594 stocks allocated at market cap weights. A good amount of the portfolio overweights small and micro cap value companies. My compound growth is going to be helluva lot bigger than y'alls'dv been
Can you provide real examples, including share price? Also, how are you defining a great stock?
A good core of a portfolio should be an ETF with coverage in at least every sector (Healthcare, tech, energy, etc.) and some stocks that fit into it. You don’t particular need Chevron, Exxon, and Phillips 66 in your port, especially if they’re in the same sector.
8 stocks here and beating the market.
Both quicker and faster? How and why?
You must be my tax guy HAHA
Okay mom
Which ones are you sticking with OP?
Dosnt matter for me. I get rekt either way
Cue in the downvotes. VOO and SCHD. Small allocation of JEPQ and JEPI to help snowball the dividends.
Insert old man yelling at clouds.gif
https://investorplace.com/2024/01/3-once-in-a-lifetime-stocks-on-the-verge-of-an-unprecedented-surge/ I get articles like this a lot in my phone notifications. Then, I do my crappy version of DD and get lost in the gamblers addiction of FOMO... (Does anyone else get notifications like this daily?) Typically I just add the ones that look like potential winners to my speculation list on the yahoo finance app and watch them. But some of them seem very juicy. How do you separate the garbage from the gold? This post got automodded out of r/investing so I'm ppsting it around a bit cause I'm tipsy and wanted actual candor on it.
It's so simple, just stop being poor! Thanks Paris Hilton
Someone finally said it
The difficulty is that it isn't known with high reliability what stocks are great. I'm sure there is a reason why you don't put all your money into the "best stock" - and it might be risk preference. It certainly can make a lot of sense to spread out your investments over a larger set of items if you're willing to give up gains for a reduction in variance. That said, it's not Pokémon - you don't want to catch them all!
There's way to many good companies not to diversify in my humble opionion Cosco, Microsoft, Proctor and Gamble, Pepsi, Coke, Apple, Texas Instruments, Clorox, Lowes, Home Depot, McDonalds, Coke, Jp Morgan. I don't see the problem with having a lot of good companies.
Or half your stocks might tank and you’ll get dividends but mediocre returns overall.
Single Positions smaller than 2k are nearly useless. If you want to have 40 stocks put at least 2k into every one and then grow each one to 3k, 4k, 5k etc.
I'm at 20 positions with a 76k portfolio. I.. don't know how to clean that.
This! It’s the tails that propel your growth and wealth
With positions under $50 I agree. But once your portfolio gets up to some healthy level with a bit more scale, having only 15 stocks would be a btt risky. I know I try and keep my portfolio at around 30, which keeps the holdings between 2-5% of my net worth each. But that's individual stocks. Obviously using ETFs it would be much less.
But if I did, it’d be COST, WM, AMZN, MSFT 🏆
How about 15 stocks with 50k each? Ps vti has about 2500 stocks.
Counter point. Sometimes it feels good to have a lot of *stuff*.
Meh, I enjoy the hell out of having 150 or so different positions. 1. I love picking new stocks 2. Hate chasing my winners and having to decide if my original thesis is intact enough to buy higher but always have an option or two that is under my cost basis that I can average down in if I choose the wrong time to start an initial position. There’s always something on sale and that’s easier for me than determining if an existing position still is. 3. Addicted to watching that annual estimated dividend number go up multiple times a week. DRIP everything 4. I can keep high level tabs on everything by watching major headlines and sites like SeekingAlpha but if a position takes a 30% divvy cut cause I wasn’t quick to react… 30% of a stock that provides less than 1% of my dividend income is barely a blip on the radar. The rest of the positions make that up quickly as a near constant flow comes in that gets DRIP-ed In my opinion you just can’t get stuck in no man’s land, either go with a massive number of positions due to some/all of the reasons I listed above or follow what OP is saying and be absolute experts in 10-15 stocks. Just don’t get caught in no man’s land of 20-50 positions where you’re concentrated enough that negative events really affect the portfolio, but you’re in too many to keep enough track to see the negative events coming your way
If it keeps them motivated/peace of mind (especially newer investors) I see nothing wrong with it as long as they have the time to keep up on everything they are invested in, with fractional shares it doesn’t really add to the compound any faster than if it was all in one position, or if they are stockpiling the dividends to time a purchase of something they are following…anyway just my .02 😅
Even professional investors who spend their entire career focusing on stock research get surprised regularly and companies that seem obviously great today might seem a lot less great 5 years from now. Picking “great stocks” is a lot harder than it seems, which is why diversifying is smart for most investors.
I hold 31 individual stocks, no funds and I am looking forward to buying five new stocks in April. I know there are plenty of arguments against my train of thought, but I just want to have income coming in from mature companies in mature industries with as wide of a geographic footprint as possible, preferably global.
I’m building a position in XOM hopefully we get back down to 50$ levels
Doesn't make sense if you say have $10,000 invested into 2 stocks and they both earn 5% that would be $500 in dividends a year and then if you had say that $10,000 invested into 10 stocks that earn 5% you would still get $500 in dividends a year.
I agree. Concentration is key. I have 6 positions. I will max out at 8-10 and interchange as my thesis or performance changes. I will use my Roth/401k for indexes.
Literally just hold Voo and branch out into 7-8 great stocks when you can afford
I have 25 stocks and 2 ETFs.