12-11-2021, 09:11 AM
(12-11-2021, 07:50 AM)ken-do-nim Wrote: This also gets back to the position sizes discussion. I came up with this a while back for my port:Yes, position size matters a lot. I also maintain a few "watch" size positions. It's usually because I know I have not properly researched them enough to "throw down" yet, or I am just plain afraid of them so there is no real conviction. I'm not sure I know a single person with 50-100 stocks that is matching a SPY index fund over the past say five years. They aren't hurting anyone but it's just a stock collecting hobby at that point. Cherry picking a bunch of high dividend stocks is another matter if you actually need the income soon. At this point in my life I only need to compete with SPY on a risk adjusted basis. If I can get 75% of the return with 50% of the risk I'm OK with that. 15 years ago I was better served to match the market average.
$1 - $500 watch position
$501 - $1000 starter position
$1001 - $2499 junior position
$2500 - $4999 moderate position
$5000 - $7499 full position
$7500 - $9999 large position
$10000 - $19999 major position
$20000+ principal position
(Obviously if your port's overall size is much higher than mine, adjust the numbers accordingly)
It's not just about the flat number of stocks you own, I think it's about how many are at each tier. The higher the tier, the more you have to know about their financial health. For instance, I have 33 stocks, but out of that, 12 are at Junior or less, and another 8 are Moderate. So only 13 are larger investments.
I enjoy threads like this.