Quote of the Day - Diversification

[Scooterd]

(12-29-2021, 06:41 PM)fenders53 Wrote:

(12-29-2021, 10:54 AM)rnsmth Wrote:

(12-29-2021, 10:24 AM)fenders53 Wrote:

(12-29-2021, 10:02 AM)cemanuel Wrote: Yes, I knowingly lower my return for some peace of mind.  I don't need 50 tickers to accomplish that though, and that is where I found myself quickly headed.  I just don't have that many great ideas.  I'll more than likely end up with a bad ETF.

I was able to add more companies pretty easily when depositing more cash until I got past 30. From that point it seemed that every time I looked at getting something else, I liked what I already owned as well or better. Think I got to 34 at one point. Sitting at 29 right now. 

I landed in about the same place.  When I got to well over 40 I always had two or three struggling tickers and didn't have an adequate explanation why I added them.  I'd like to end up with 20 but it will probably be 25-30.

I used to have 35 or so.  Down to 26, 21 companies, 1 ETF and 4 CEFs

EDIT:  make that 27, added RY this morning.

Enter the debate of how close one should watch their holdings?  If I enter a blue chip for the long haul, then initial research may well be sufficient for many years with an annual review.  Reading a couple hype articles on a forum isn't good enough for a larger position. When I held 45+ stocks I was always holding at least six companies with less than stellar balance sheets, less than top notch management, questionable moat etc.  Now I needed to be listening to quarterly conference calls for 15 companies.  An ETF is a better place for that part of my port.  Actually the Schwab fund I think you own accomplishes that.  It contains some stocks that need watched if held individually.  (You can make a hobby out of tracking T or MO).  The alleged "value traps".  You can skip the stress when protected by the ETF's diversity.

The Older I have gotten, the more selective I have become with what's held my investment portfolio. I would rather have 4 shiny Quarters than 100 dull pennies. Quality vs Quantity. Additionally I have much much better things to do - Than have to constantly keep tabs on 100 dull pennies.

"If we think that risk is roughly equivalent to the probability of losing money on an investment, then perhaps we should ask, “are you more likely to lose money owning a concentrated portfolio or a highly diversified portfolio?” The common sense answer is that it depends on what’s in each portfolio!" - Howard Marks