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How much time does it take?
#11
Just because most of the companies mentioned on this forum publish 100+ page annual reports does not mean you have to read them cover to cover. I have done that maybe three times in the past five years. Looking back, it was not really worth the time and effort.

You can be as involved as much or as little as you want when it comes to monitoring your portfolio. Here are three recommended levels of involvement:

1) The easiest approach is to look strictly at dividend yield, payout ratio, and dividend growth. With these three metrics you can distinguish between high-payout, slow-growing dividend companies and low-payout, fast-growing dividend companies (and everything in between). All it would take to manage a portfolio using this approach is a simple spreadsheet and a few hours a quarter.

2) If you want a little more detail, take a look at the "Selected Financial Data" section contained in every annual report. This will give you a window into the companies capitalization structure (i.e. do they have a lot of debt?), profitability, and general trends over the past few years. You might even consider reading the shareholder letter if it contains any substance. (Some "shareholder letters" are not much more than marketing material.) This approach might take a few hours a month.

3) If you are a details kind of person then take a look at their financial statements. Going through a company's balance sheet, income statement, and statement of cash flows line by line can be quite educational. Depending on the size of your portfolio, this approach could take a few hours a week.

I progressed from level 1 to level 3 over a period of a few years. Looking at a company's financial statements does not take very long once you are familiar with a particular company or industry. Plus, I enjoy it.

I have gone down the route of owning ~20 companies that I keep an eye on. I bet there are a lot of people that take a level 1 approach and own a lot more companies than I do but pay less attention to them. Different is not wrong. Smile
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#12
Diversify Into different sectors. I like picking stocks that have plenty of room to grow, others like to pick stocks that are well established which may pay more per share but you earn less secondary to having less stock. Jump in and have fun.


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