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I've been considering reducing my current portfolio of 30 stocks down to 25 to try to be a little more concentrated in them. If you could remove 5 stocks, which would they be and why? I have a couple ideas, but I'm not 100%
My portfolio right now:
AAPL - 20 Shares
ABBV - 46 shares
ABT - 42
AFL - 31
COP - 44
CVX - 47
DE - 20
GIS - 41
JNJ - 26
JPM - 27
KMB - 17
KMI - 62
KO - 43
LMT - 17
MCD - 38
MSFT - 37
O - 50
OHI - 62
PEP - 26
PG - 27
PM - 22
RTN - 37
SAN - 222
SO - 82
T - 52
TGT - 58
VZ - 32
WEC - 80
WFC - 32
WMT - 27
As you can see, I don't have full positions in anything. I think selling 5 would help to concentrate me more. I believe being more concentrated will help my growth instead of waiting a few years to accumulate enough shares to get a share via DRIP each quarter or more. I am still pretty young (33), so I am thinking about selling T, VZ, AFL, and SAN (although, SAN is a pretty good income play for the long term and a reasonable div% before this last cut)
Thoughts?
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I could say that I had similar thoughts. I own 20 companies now and while I do not think that the number itself is too much I do feel like the average value of my holdings is too low. So I did think about selling off some companies and spreading that cash among the positions that remain in my portfolio. However I did come to a different conclusion: I've decided to simply keep adding to my existing positions and not to start new ones unless I really find something that I can't keep my hands away from. This way of course takes time to work and you need to be investing new cash regularly.
There is 1 company I'm looking to get rid off but that is more to do with what's happening with the company rather than what's happening with my portfolio.
If you do decide to sell remember to think about taxes. As for which stocks to get rid off, that's your choice but I do see a lot energy sector there. You did mention both VZ and T, personally I like telecoms but you could easily sell off one and invest that cash into the other to reduce the amount of total holdings without affecting diversification between sectors.
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Actually, it looked pretty good to me but if you feel you should reduce, who am I to argue. My choices would be:
SAN - too much headwind for a foreign bank but that's me. Also too much financial with AFL and WFC already in the portfolio.
WMT - slowing growth and challenges for retail although over a long time frame it might reward you eventually.
T - move the proceeds to VZ? I think VZ has a slightly better network, especially now that they own all of Verizon Wireless.
CVX or COP - you pick. I agree with Crimsonghost, maybe a little too much energy.
KMB - overlaps with PG in some areas but I haven't done much research on them.
You could also just ignore the ones you don't want anymore and let them reinvest without adding any new money. One of them may surprise you 10-15 years from now.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
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07-19-2015, 10:25 AM
(This post was last modified: 07-19-2015, 12:21 PM by NilesMike.)
Two obvious changes for me would be to drop SAN as stated above and COP, keep CVX.
The rest doesn't appear to be too redundant and has good performers.
I also don't think you need to concentrate, that's more of a feel good thing IMO.
Drop the 2 above and keep adding to your nicely selected basket.
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I concur with the points made above.
Selling both T and VZ will leave you with no telecom exposure - which I think is good to have in a balanced portfolio. Also, collecting dividends in cash and simply purchasing stocks isnt that bad a deal, is it? Are your transaction costs very high?
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The reason I was considering selling both telecoms is their DGR. They have good, high dividends now, but I was thinking of putting the money in something with a higher Chowder Rule number since their growth barely keeps up with inflation.
I had added to my position in CVX while it was falling. That's why my energy sector is fairly high. Although, COP+CVX is only sitting at 9.5% of my total. I keep KMI in my MLP/REIT sector per balancing.
Roadmap - My transaction costs are $9.99/trade. However, everything is set up to DRIP right now, so I'm not doing any transaction costs. I am slightly margined right now due to the extra CVX I bought recently and am slowly paying that down.
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(07-18-2015, 03:58 PM)Turvok Wrote: I've been considering reducing my current portfolio of 30 stocks down to 25 to try to be a little more concentrated in them. If you could remove 5 stocks, which would they be and why? I have a couple ideas, but I'm not 100%
* * * * *
As you can see, I don't have full positions in anything. I think selling 5 would help to concentrate me more. I believe being more concentrated will help my growth instead of waiting a few years to accumulate enough shares to get a share via DRIP each quarter or more. I am still pretty young (33), so I am thinking about selling T, VZ, AFL, and SAN (although, SAN is a pretty good income play for the long term and a reasonable div% before this last cut)
Thoughts?
I'm not sure I buy into your premise. That is a fine collection of stocks. Yes, dumping the stocks with the lowest dividend growth rates will increase the average dividend growth rate of the portfolio, but don't forget that is all backwards-looking. You've got a long way to retirement, and 30 stocks is by no means excessive. Why not just use your new money / future purchases to nudge the portfolio in the direction you want?
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07-19-2015, 03:23 PM
(This post was last modified: 07-19-2015, 03:24 PM by navyasw02.)
I agree with Kerim, I dont see the point of reducing your diversity to chase dividends in individual holdings. Personally, I'm trying to build my porfolio into Noah's Ark and have two of everything (KO/PEP type combinations)
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(07-19-2015, 03:23 PM)navyasw02 Wrote: I agree with Kerim, I dont see the point of reducing your diversity to chase dividends in individual holdings. Personally, I'm trying to build my porfolio into Noah's Ark and have two of everything (KO/PEP type combinations)
Haha, I like that "Noah's Ark" portfolio. I've heard of pairs, but never thought of that analogy.
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I like that idea as well.
Personally 25-30stocks is my goal. So, if I were you I would sell any.
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Thanks for the advice guys. I don't know why, but I always thought 30 was a little high. After seeing everyone's comments, I guess I'll stick with what I have.
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