[quote pid='15497' dateline='1541899528']
I'm 25 and started out buying heavily based around a stock's dividend. I have now switched mostly to business perspective investing.
I own some the classic dividend stocks - JNJ, PG, MCD, XOM, MO, AFL, CAH, ULVR along with MSFT, DIS, SBUX, V and AAPL less pure dividend plays.
The rest of my portfolio contains growth orientated companies that I feel have large economic moats and have the ability to generate a lot of free cash with modest capital input. I am aware that many of these, especially the Chinese holdings, are risky but over the long term they should do well.
These include - ADBE, BABA, FB, TECHY (down heavily on this one!)
I feel balance is important but am very sceptical of capital intensive businesses like utilities and automakers. I like businesses that can make a lot off very little capital as opposed to businesses that can make a little from very heavy capital input. This is why I have stayed away from T for example.
Maybe this approach would be of help to investors?
Don't go all in low-growth div stocks but don't think you're going to become rich by piling money purely into tech stocks either.
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That port looks appropriate enough for a 25yr old. It's OK to lose some money while you have time to adjust course. You aren't "all in" on tech. I'll be joining you in some of those Chinese stocks at some point, but nothing too substantial. The first ten years I confused investing skill with a bull market. I learned about non-diversification, getting greedy, margin abuse etc. It's an easy trap when no matter you do it works out next month. The market humbled me and I am fortunate it was only $30K and not a $300K lesson later on. Just my opinion, but you don't know what kind of an investor you really are until you get your nose bloodied bad, and see how you then react. This decades perfect plan is rarely ideal next decade. When the tech bubble crashed I thought I would just ride it out since I owned quality like MSFT, INTC etc. That's a nice theory until you live it. Valuation at time of purchase will matter eventually. Waiting 10+ years for a company like MSFT to recover was hard on my net worth (not to mention my appetite for risk). I was very lucky to have a good income and buy fairly low with new money for the next decade. But I wish I'd had a little more cash so I could react to my first crash. I will never be 100% invested again. I'm getting off topic telling investing war stories.
I'm with you on the FCF. A stock like APPL may very well be your best dividend ten years from now. Those companies can diversify to other sectors going forward if they desire. They can acquire an insurance company if they like. Not so much the other way around.
Don't give up on the utilities. You lost me some on your logic to avoid them. I have a 500% return on XEL. If I had managed to do that a little more often I would be worrying about CD rates a lot more than the S&P 500 now.
Of course I could have grabbed the wrong utility and I'd be sitting on an extremely low growth dividend play a few years later.
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[quote pid='15497' dateline='1541899528']
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I'm 25 and started out buying heavily based around a stock's dividend. I have now switched mostly to business perspective investing.
I own some the classic dividend stocks - JNJ, PG, MCD, XOM, MO, AFL, CAH, ULVR along with MSFT, DIS, SBUX, V and AAPL less pure dividend plays.
The rest of my portfolio contains growth orientated companies that I feel have large economic moats and have the ability to generate a lot of free cash with modest capital input. I am aware that many of these, especially the Chinese holdings, are risky but over the long term they should do well.
These include - ADBE, BABA, FB, TECHY (down heavily on this one!)
I feel balance is important but am very sceptical of capital intensive businesses like utilities and automakers. I like businesses that can make a lot off very little capital as opposed to businesses that can make a little from very heavy capital input. This is why I have stayed away from T for example.
Maybe this approach would be of help to investors?
Don't go all in low-growth div stocks but don't think you're going to become rich by piling money purely into tech stocks either.
-------------------------
That port looks appropriate enough for a 25yr old. It's OK to lose some money while you have time to adjust course. You aren't "all in" on tech. I'll be joining you in some of those Chinese stocks at some point, but nothing too substantial. The first ten years I confused investing skill with a bull market. I learned about non-diversification, getting greedy, margin abuse etc. It's an easy trap when no matter you do it works out next month. The market humbled me and I am fortunate it was only $30K and not a $300K lesson later on. Just my opinion, but you don't know what kind of an investor you really are until you get your nose bloodied bad, and see how you then react. This decades perfect plan is rarely ideal next decade. When the tech bubble crashed I thought I would just ride it out since I owned quality like MSFT, INTC etc. That's a nice theory until you live it. Valuation at time of purchase will matter eventually. Waiting 10+ years for a company like MSFT to recover was hard on my net worth (not to mention my appetite for risk). I was very lucky to have a good income and buy fairly low with new money for the next decade. But I wish I'd had a little more cash so I could react to my first crash. I will never be 100% invested again. I'm getting off topic telling investing war stories.
I'm with you on the FCF. A stock like APPL may very well be your best dividend ten years from now. Those companies can diversify to other sectors going forward if they desire. They can acquire an insurance company if they like. Not so much the other way around.
Don't give up on the utilities. You lost me some on your logic to avoid them. I have a 500% return on XEL. If I had managed to do that a little more often I would be worrying about CD rates a lot more than the S&P 500 now.
Of course I could have grabbed the wrong utility and I'd be sitting on an extremely low growth dividend play a few years later. [/quote]
[quote pid='15497' dateline='1541899528']
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