02-01-2014, 12:39 PM
Interesting question, CritMass. I'm hesitating because I don't know your age, your plans, the size of your portfolio (other than you have 15 small positions ?) and your goals. I can only add what I do and how I would approach it.
Do you have an investment plan? See Bob Wells' and David Van Knapp's articles on Seeking Alpha about the topic. I ignored this for a long time and my portfolio was all over the place. Then one day I dove in and started working on it. It's always a work in progress but now at least I've got goals and roadmaps.
For example, I took a look at where my wife & I stand and what we could reasonably accumulate. From that I conjectured that I'd like about 25-30 positions in my IRA and my wife could reasonably expect to hold 20-25. These are based on a full position being no less than $2k in current dollar value since smaller holdings would produce minimal results for the effort.
Of these, I eventually want to hold at least one company in each of the S&P/GICS 10 major industry categories for sector diversification.
From these I built a spreadsheet. One page is my current holdings so I can update and see what the portfolio is doing. The second page lists the current holding plus what I want to hold at retirement age and the percentage of the portfolio for each. Anything that's not in the portfolio now is a placeholder and, if there's a better bargain that presents itself for that category, I purchase it and replace the other. Also, if something is really beaten down by Mr. Market and it's not on the list, I'll still buy and make room for it if I think it has good prospects.
For example, my wife doesn't hold a household products stock (PG, CLX, CL, UL, KMB, etc.). Right now, I have CL on her wish list page but PG is getting really attractive price-wise here -- moreso than CL. I may purchase PG when the cash is available and replace CL on the wishlist.
Now, my wife holds 15 positions. 6 are partial positions since I wanted to broaden the portfolio and start the compounding process with reinvested dividends. As cash becomes available, I'm always torn between adding to the partial positions or adding a new one since she's not at the goal of 20-25 yet. Partly I look at the valuation of the ones she already holds, the valuation of ones I want to add and what I can expect in cash deposits to the brokerage account in the near future. Since we both are business owners in cyclical businesses, the cash available is not the same throughout the year.
Do you want to purchase a whole position in one shot? Sometimes dollar cost averaging gives you a better yield and average cost. Other times, you may want to put your money down in one buy. For example, in the Great Recession CVX was at a P/E of 5 and yielding just over 4%. To me, that was a "buy in one shot" no-brainer.
So, as to your question, what do YOU think? Maybe a couple of new positions and fill in some of your smaller holdings? What is the valuation of the companies you are thinking of? No one can really answer that but you. From my own willy-nilly investment days, I can honestly say creating a plan really helps ground your thinking.
Sorry for this long-winded reply. I mentioned in my introduction I can blab on-and-on at times. As I used to say on another message board I frequented -- take what is of use to you and throw away the rest.
Do you have an investment plan? See Bob Wells' and David Van Knapp's articles on Seeking Alpha about the topic. I ignored this for a long time and my portfolio was all over the place. Then one day I dove in and started working on it. It's always a work in progress but now at least I've got goals and roadmaps.
For example, I took a look at where my wife & I stand and what we could reasonably accumulate. From that I conjectured that I'd like about 25-30 positions in my IRA and my wife could reasonably expect to hold 20-25. These are based on a full position being no less than $2k in current dollar value since smaller holdings would produce minimal results for the effort.
Of these, I eventually want to hold at least one company in each of the S&P/GICS 10 major industry categories for sector diversification.
From these I built a spreadsheet. One page is my current holdings so I can update and see what the portfolio is doing. The second page lists the current holding plus what I want to hold at retirement age and the percentage of the portfolio for each. Anything that's not in the portfolio now is a placeholder and, if there's a better bargain that presents itself for that category, I purchase it and replace the other. Also, if something is really beaten down by Mr. Market and it's not on the list, I'll still buy and make room for it if I think it has good prospects.
For example, my wife doesn't hold a household products stock (PG, CLX, CL, UL, KMB, etc.). Right now, I have CL on her wish list page but PG is getting really attractive price-wise here -- moreso than CL. I may purchase PG when the cash is available and replace CL on the wishlist.
Now, my wife holds 15 positions. 6 are partial positions since I wanted to broaden the portfolio and start the compounding process with reinvested dividends. As cash becomes available, I'm always torn between adding to the partial positions or adding a new one since she's not at the goal of 20-25 yet. Partly I look at the valuation of the ones she already holds, the valuation of ones I want to add and what I can expect in cash deposits to the brokerage account in the near future. Since we both are business owners in cyclical businesses, the cash available is not the same throughout the year.
Do you want to purchase a whole position in one shot? Sometimes dollar cost averaging gives you a better yield and average cost. Other times, you may want to put your money down in one buy. For example, in the Great Recession CVX was at a P/E of 5 and yielding just over 4%. To me, that was a "buy in one shot" no-brainer.
So, as to your question, what do YOU think? Maybe a couple of new positions and fill in some of your smaller holdings? What is the valuation of the companies you are thinking of? No one can really answer that but you. From my own willy-nilly investment days, I can honestly say creating a plan really helps ground your thinking.
Sorry for this long-winded reply. I mentioned in my introduction I can blab on-and-on at times. As I used to say on another message board I frequented -- take what is of use to you and throw away the rest.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan