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+--- Thread: Number of stocks in a Portfolio (/showthread.php?tid=626)
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Number of stocks in a Portfolio - DWR71 - 07-27-2014
I was just curious how many different stocks you feel is the right number to be able to manage properly? I have about 60 in mine and am debating if I should try to sell some of them and reinvest the money in some of my existing positions.
RE: Number of stocks in a Portfolio - Roadmap2Retire - 07-28-2014
I own 20 stocks (and 5 funds). I find that the 20 stocks takes up a lot of my time but finding it easier to manage/keep on top of, as time goes by. I will be looking to expand that number further more - maybe 3-4 stocks per sector, so in total about 30-40 stocks.
RE: Number of stocks in a Portfolio - Robert_NL - 07-28-2014
60??? How on earth do you manage that. I have 18 positions now and already spending a lot of time monitoring and managing it.
RE: Number of stocks in a Portfolio - ronn38 - 07-28-2014
I think it depends on the kind of stocks. I really don't pay a lot of attention to MDC, KO, PG, CSX, CVX, etc. Some attention to Apple and the likes, and most of my attention on thing like KMI and ARCP. I have about 40, but 75% (by weight) are buy and hold.
Ronn
RE: Number of stocks in a Portfolio - Dividend Watcher - 07-29-2014
I have 27 in my portfolio and 18 in my wife's. We have 5 of the same company so that leaves 40 different companies. There's only a couple I'm keeping a close eye on right now, MAT and LO, the rest I spend no more than a few hours a week to monitor at most.
If you're not used to them, maybe you don't feel comfortable without knowing more. I basically just look at headlines to see if anything is changing in any of the companies I own and see if I need to look closer. When earning are reported, I may look at the results and dig a little deeper but there are few companies I'm willing to trade right now.
Maybe I'm going about it all wrong but I don't think PEP, JNJ, PG, KRFT, CVX, COP, etc. are going out of business any time soon. ABBV's doing a tax inversion and WAG is thinking about it. Am I worried about it? No. Do I think BAX's management is going to let Biogen kick their butts out of the hemophilia market. I don't think so. Is UTX not going to sell any more elevators or helicopters or jet engines? Probably not. GE just poured some money in my pocket today and KRFT just dumped some money in my wife's. So far, so good. MSFT got some bad press about laying off workers. Maybe they needed to. After a 22% bump in the dividend a few months ago, I still don't think Bill Gates is digging in his couch cushions for spare change nor worried about where his foundation is going to get more money to give away.
I think the important thing is to do the research up front and find out how the business operates it and what could have a big effect on it. I think you also have to expect the business to hit a rough spot every once in a while. Sometimes it takes a couple years for them to overcome it but a dividend growth company that's been doing this for a while somehow finds a way to overcome it.
Intel was pissed on and badmouthed for the last few years and they froze the dividend. Yet the whole time they still paid dividends in the 3-4% range and when the business cycle changed & the new CEO started implementing some of his ideas they gave our portfolios a a big boost. Used some of their success to add to my wife's portfolio. I know how Intel does business and the freeze wasn't unexpected. Now that things are getting back on track, if they don't raise the dividend soon, I'll think more about selling and moving on.
Find what's comfortable for you.
RE: Number of stocks in a Portfolio - cannew - 07-29-2014
I have 8 categories with a total of 48 stocks to track. However, many are the same company so the total number of company stocks is 21. There are two I would like to sell if the price rises a bit and there is one company which is being bought out by another I own (BCE is buying the rest of BA). So I really only invest in 18 stocks (no bonds, mutuals, etf, preferreds) which I will hold, probably forever.
RE: Number of stocks in a Portfolio - EricL - 07-29-2014
I think 10 is a bare minimum if you are focusing on quality blue chips with good balance sheets, although I don't think I'd be comfortable in retirement with any less than 20.
I own around 65 positions across 4 accounts and feel that I can keep up on news reasonably well. The majority of my stocks are high quality so its generally a quick glance at quarterly earnings to make sure nothing major is happening and I just let dividends reinvest and compounding to work its magic.
Otherwise I have a few more speculative plays that I keep up with more by following investor presentations and earnings conference calls and whatever else I can find for research.
RE: Number of stocks in a Portfolio - WRXodus - 07-30-2014
So far I have 7 stocks and 1 ETF, which should give decent diversification while I build my portfolio...as slow as it's going :-P
RE: Number of stocks in a Portfolio - Joey Batz - 10-03-2014
60 is a great number. I personally think the more, the merrier (as long as you can afford to buy that many)!
As for how to manage that many, your portfolio should be filled with companies that you don't HAVE to watch and manage constantly. Coca-Cola, Colgate-Palmolive, etc. While you might have a couple companies that require a bit more watchful eye (I have SeaDrill (SDRL) in my portfolio), they should take up a very small percentage of your portfolio.
If you find yourself having to constantly monitor the 60 stocks in your 60-stock portfolio, then perhaps you should reevaluate if those companies are the types that you want. Dividend income should be passive income, after all, not a second job.
RE: Number of stocks in a Portfolio - Kerim - 10-03-2014
I don't think there is a magic number, but I imagine anything between about 20 and 60 is easily defensible, given your time, financial resources, knowledge, etc. I'm up to 26 positions, after 6 years of diligently building my portfolio. I will continue to add opportunistically. I probably would not even think about capping the number -- on principle alone -- until I'm around or above 40 positions.
RE: Number of stocks in a Portfolio - Be Here Now - 10-08-2014
According to recent news reports, BKS invests in stocks only for its subsidiary pension funds (no bonds), and 4 stocks account for most of that. There were no details on which stocks. http://www.bloomberg.com/news/2014-10-02/buffett-s-all-equities-pensions-escape-bill-gross-drama.html
RE: Number of stocks in a Portfolio - Main Street Stock Investor - 10-24-2014
There are 10 GICS sectors and for diversification, an investor would be prudent to hold at least 3 or 4 high quality stock positions in each sector. We all know that sector performance is variable, monitoring various sectors weaknesses and strengths can help make good investing and buy & sell decisions. If you like sector ETF's like many of us do, that will add additional positions.
Many studies have been done regarding the number of individual stocks that need to be held in a portfolio to ensure proper diversification (30 seems to be the magic number), but rules and guidelines can be misleading. I manage 3 personal large blue chip stock portfolio's and those portfolio's contain more than 145 stocks (approx. 50 stocks/portfolio and some stocks are held in more than one portfolio). Because the portfolio's were built over a long period of time, I have no problem managing this quantity.
I also actively trade partial positions based on market conditions and apppreciated stock. I can do this in a couple of hours/day or a couple of hours/week. As other readers have pointed out, when you hold quality, the portfolio doesn't need to be tweaked that often.
M$$I