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One of the benefits of holding 60+ stocks across various sectors is that at any given time there will be opportunities to sell some shares at a profit when they are overvalued and to buy others when they are undervalued. When done properly, this produces different results than holding an index ETF or index mutual fund. I also profitably trade partial positions of index ETF's several times a quarter.
Retired now, but had the same number of stocks when I was working and managed the portfolio on weekends and during my lunch break.
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(02-18-2020, 03:47 PM)Main Street Stock Investor Wrote: One of the benefits of holding 60+ stocks across various sectors is that at any given time there will be opportunities to sell some shares at a profit when they are overvalued and to buy others when they are undervalued. When done properly, this produces different results than holding an index ETF or index mutual fund. I also profitably trade partial positions of index ETF's several times a quarter.
Retired now, but had the same number of stocks when I was working and managed the portfolio on weekends and during my lunch break.
This is a huge advantage of owning stocks in every sector. There is almost always something out of favor that needs to be purchased. As long as you can make the time to keep yourself current on why a stock is moving before you jump in (or trim).
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Now that trading commissions are $0, I'm taking 1-5 share "flyers" on stocks I'm interested in, so my overall number is increasing. However, that is misleading because I only truly have a sizeable (over $1000) investment in about 5. Then again, I just (re-)started a year ago.
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(02-01-2021, 12:05 PM)ken-do-nim Wrote: Now that trading commissions are $0, I'm taking 1-5 share "flyers" on stocks I'm interested in, so my overall number is increasing. However, that is misleading because I only truly have a sizeable (over $1000) investment in about 5. Then again, I just (re-)started a year ago.
A very good method to build a new portfolio IMO. Don't feel obliged to round them all out just because you bought a few random shares.
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(02-01-2021, 05:04 PM)fenders53 Wrote: (02-01-2021, 12:05 PM)ken-do-nim Wrote: Now that trading commissions are $0, I'm taking 1-5 share "flyers" on stocks I'm interested in, so my overall number is increasing. However, that is misleading because I only truly have a sizeable (over $1000) investment in about 5. Then again, I just (re-)started a year ago.
A very good method to build a new portfolio IMO. Don't feel obliged to round them all out just because you bought a few random shares.
Thanks, yeah good advice.
Even though I'm aiming for growth, I do like the idea of having some dividend producers, with dividend reinvestment turned off, that I can redirect towards the growth equities every quarter.
I've been retired well over 12 years and we own 11 stocks in all of our accounts which we've owned most of them, most of our retired years. We own several in different accounts, but just 11 companies in all. Our investment income is just about double our annual expenses, and we don't expect to sell unless something really bad happens to a company, and we never sell to take profits.
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(04-29-2021, 03:53 PM)cannew Wrote: I've been retired well over 12 years and we own 11 stocks in all of our accounts which we've owned most of them, most of our retired years. We own several in different accounts, but just 11 companies in all. Our investment income is just about double our annual expenses, and we don't expect to sell unless something really bad happens to a company, and we never sell to take profits.
Hi cannew! I've been looking forward to hearing from someone who is in the drawdown phase and is living the life. Can you share the magic 11? I'm really curious what portfolio someone can actually live off of.
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04-29-2021, 09:07 PM
(This post was last modified: 04-29-2021, 09:09 PM by ken-do-nim.)
Additional thought on this topic. What I was finding was that positions with little weight in the portfolio end up as just ... noise. If you have say 6 positions equal to half the total value of the portfolio, and 40 positions adding up to the other half, the big six dictate most of the movement. So I think it's less a question of how many positions makes sense and more of a question of how much divergence the min & max have. Since some of my largest positions far outweigh the smaller ones and for tax reasons I'm not in a position to break them up, I've chosen to focus on consolidating some of the smaller ones.
There is, however, also a limit to just how many companies a person can reasonably stay knowledgeable and up to date on. In the book The Tipping Point, author Malcolm Gladwell explains what channel capacity is, and describes the cognitive rule of 150 (pages 175-181). I believe the rule of 150 makes perfect sense to apply to keeping up to date with one's portfolio, therefore the upper limit of how many equities anyone can keep track of effectively is 150 (and for many people, the upper limit would be less than that).
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I feel like I do a very thorough job tracking 10 of my holdings. An adequate job on perhaps 20 more, and I have no business holding more than a tiny position in the rest.
If you hold high quality stocks and stay somewhat diversified in the first place you can get by with it. If not then you'll have some very tough years along the way.
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I'm at 49 distinct equities right now. I don't feel like I have to do any maintenance on VOO, the S&P 500 index fund, so that's 48. It will take me a long time to really get to know all of them well.
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Agree you dont need to research index ETFs. Doing so is likely counter productive. Some minimum amount of faith in US equity markets is necessary. It works out or it doesn't.
(04-29-2021, 03:58 PM)ken-do-nim Wrote: (04-29-2021, 03:53 PM)cannew Wrote: I've been retired well over 12 years and we own 11 stocks in all of our accounts which we've owned most of them, most of our retired years. We own several in different accounts, but just 11 companies in all. Our investment income is just about double our annual expenses, and we don't expect to sell unless something really bad happens to a company, and we never sell to take profits.
Hi cannew! I've been looking forward to hearing from someone who is in the drawdown phase and is living the life. Can you share the magic 11? I'm really curious what portfolio someone can actually live off of.
I'm from Canada and own just stocks I consider quality dividend growth stocks. There is no great secret to achieving sufficient investment income:
1. Stick with quality DG stocks
2. Reinvest the dividends
3. Buy when they provide a reasonable yield
4. Add to the ones you own or add others
5. Avoid fixed assets, high yielding stocks and ETFs
6. Never sell as long as your income continues to grow.
7. Increase the funds you add, as your income grows
8. Max out your Roth IRA and IRA.
Check out my blog: https://risingyieldoninvestments.blogspot.com/
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