Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
How many stocks in a portfolio?
I wrangle with this in my head every so often. How many is too much? Does buy and hold prevent me from fine tuning my stock selection? Does the feeling of enough is enough prevent me from a good stock investment?

Personally, I own and feel they are enough

59 individual stocks

6 mutual funds

Once I retire the mutual funds will be traded out and into dividend paying stocks...I keep thinking my gawd as time moves forward I'm going to end up with 100 stocks!!

In fact, I could easily buy and hold 100 stocks because there are great investments out there--it's just too much work.

SA poster, as10675, a very successful investor in his own right has over 300 individual companies! It might even be reaching 400....yea...395!! Just checked....That number gives me a headache--but when you look at his portfolio--it's not like he has bad investments.

A friend of mine is probably just as successful as SA poster as10675 with 29 stocks and about 10 to 12 years younger to boot. So, owning a lot doesn't necessarily mean you'll get a lot. But both of these guys have A LOT lol...both strategies apparently work. The one thing they have in common are good stock selections--one is just a lot more concentrated. If both just did nothing neither would go broke even in a massive downturn.

Here's a great read.....Chuck Carnavale
Personally I like to read through all of the quarterly reports of the companies I own. Of course I don't read the whole report but I'd say I spend maybe 15 minutes eyeing it, plus then reading through the Q&A of the conference call which is probably another 10 or 15 minutes. I do read some (maybe 20%) of the news seeking alpha sends me, and I may or may not read an article or two from other sources once in a while.

That being said, I find that around 30 stocks is a good amount. It's not a precise number, I can't even recall how many I have now, but somewhere in that ballpark is where I feel like I can comfortably follow all of the stocks I own.
I'm a buy and forget investor. As evidenced by my 61 different stocks that I own ( I actually had to go count because I had no idea how many I had, just knew that I wasn't up to triple digits yet). I'm sure by the time I hit retirement and start living off of my dividends, I will have over 100 different stocks. I came to realize that I spent too much time stressing over sells and most of the time, I was better off by not selling the stock. Once I buy a stock, I don't look at their quarterly reports unless I am looking at them as a candidate to make an additional purchase of them. Is this the best route for everyone? No, but it is the best route for me.

Could I have a larger portfolio value if I had only invested in 10-12 stocks? Maybe, but I know that I would be under a lot more stress at night worrying about it, and I don't want to lose anymore sleep than I have to. And I plan on living off of the dividends and not my net worth so I'm not too worried about portfolio value.

Good article by Chuck Carnavale.
The following is a heavy dose of my opinion as always. I have 27 individual stocks at the moment. I think about 30 is sufficient if you have a few index funds to go with it which I do. I sell covered calls against most of my positions, most of the time. Many expire every month so I have plenty to do.

I've heard people say about 10 stocks is enough to diversify. I think that is bunk. What if you did that a few years ago and selected T, MO, MMM, CVS and FDX in that small port? Those would hardly have been considered risky stocks, but you just under-performed the S&P 500 badly.

At 50 stocks you are just an index fund IMO. As long as you consistently get a total return that meets or exceeds the 500, then knock yourself out if you get some enjoyment out of it. If your results trail the 500, then your stock buying habit is costing you a lot of money over time.

Personally, my stock picking hasn't been all that awesome the past year because I bottom fish like many others here do. My conservative option selling monthly income has been crazy good and I am beating the index in total return by a margin, and it's less volatile for sure. When that stops working for me, I promise myself I will try to be objective enough to adjust my course gradually. When I buy or sell I try hard to live by the following rule. "Never do today what you wish you had done yesterday, last week or last month". I firmly believe that because in the past I learned it the hard way, repeatedly.

Users browsing this thread: 1 Guest(s)