Positions

[Jimbo]

I see chat here about " I started a new position, or I started a 1/2 position"
my question is, what size is a position?

Im sure several people will have different sizes but still curious.

Thanks

Jim

[Roadmap2Retire]

For me, its dependent on the percentage of my portfolio composition. Right now, I own about 22 stocks and a couple of ETFs. So, if I hit about 3-4% or so of my portfolio for one stock, I call it a full position.

[EricL]

Similar here, the size of a position changes as time goes on.

For example in my 401k that I write about on Seeking Alpha, a full position started at $500 when I built the portfolio, which was 50 stocks in a $25k portfolio. Now that the account has grown to around $44k, a full position is $1000.

So now when I look to buy stocks with new money I decide whether to bring laggards up to full positions, or overweight other positions that I like that may already be at that $1000 level.

[Dividend Watcher]

Same here.

In my spreadsheet, I have a cell with projected overall portfolio value in 2 years (an educated guess and sort of a goal). For each company in my "desired holdings" I list the percent of the portfolio I want each company to comprise. From that I calculate the number of shares I should hold to approximate that value and have a column showing how many shares I'm over or under.

My desired holdings list includes companies that I don't already own so I can see what my goal is when the price is right. This list changes as I add companies that interest me or delete those that aren't performing so well.

The percentage varies. For the core holdings, it's 4% and ranges down from there. The goal is to get close to the expected amount. Speculative holdings are typically 0.5-2% maximum for each position. My Portfolio Business Plan <ahem!> allows up to 5% of my entire portfolio to be in special situations/speculative stocks.

[Jimbo]

Very nice, very nice indeed.
Thanks for the replies.
Had I have had my thinking cap on, I would have realized that before I asked the question.
Now I am a little wiser than before.
Oh my, if I knew then what I know now.

Jim

[Main Street Stock Investor]

I'm sure all investors deal with this differently, but I limit a full position to 3-4% of the total portfolio value. I acquire these full positions in 1/3 increments (1.0 to 1.33% of portfolio value). Sometimes I will hold one or two extra partial position with the intent of trading these partial positions for a profit in the future. It may take one month or one year to build a full position, and I may have traded the stock several times (based on technical analysis) prior to acquiring the full position. When the full position is realized I have acquired the full position at a discount to the current market value and the intrinsic value of the stock. The majority of my holdings are dividend achievers or dividend aristocrats.

I manage diversification by using sector allocation and hold a minimum of 5 stocks in each sector.

M$$I

[ronn38]

Ditto to the above. A "full" position for me is 3%. I try to buy in full positions and then just ride the pony. If cash flow is a problem, or I'm uncertain if a "dip" has done all it's "dipping", I'll by a 1/2 (which can backfire, as in the case of DE). I only buy 1/2 positions in BDC's or other more risky income investments. For example, I have a full position in KO, AAPL and SE and 1/2 positions in HTGC,INTC and VNR .

I bought a full position in Microsoft years agos at $34.33 a share, and I'm very happy about that now. I also bought a full positions in IBM at $180.25, and that's not looking so well now. However, the purpose of each purchase was income, and in that capacity, they are both still paying uninterrupted dividends. Much of my holdings are in taxable accounts, so frankly I don't re-balance.

I think for someone not at the financial point to allocate large sums of capitol from their monthly paycheck into long term investments, its really more a matter of capitol available vs deals available. Therefore, building a diversifies portfolio at a fair price should be the focus.

Not that you asked my advice, but there is is ;-)

Ronn

[Kerim]

I guess I play this game a little more loosely than many of you! I've got two positions that are each greater than 10 percent of my DG portfolio (MO and JNJ), and several others in the 6 to 8 percent range. (I'll try to post an update of my portfolio soon.)

I tend to buy when I think there is good value to be had in an excellent company. As a result, my portfolio can easily get lopsided. I absolutely believe in diversification, but with still many years to go before retirement, I do not spend much time assigning target weightings to my positions. So for me, "partial" and "full" positions don't have much meaning.

Over the years, as especially as I approach retirement, I plan to use new money to slowly bring the positions into better balance. But with at least 20 more years to go, I'll keep buying whatever great company is cheap(est) at the time.