If I have $1,000 and I want to invest in 3 companies, how much should I put into all 3? Is there a rule of thumb or equation?
Based on your question - put 0% into each of the companies, and pick a global equity ETF in your own currency - HMWO or VWRP are some good diversified and low cost GBP ones.
Really - start small with investing in companies, especially if you are not sure how to build your own portfolio. Even if you use $50 of your funds to buy the 3 companies - if you do well, that will grow. If you dont do well, then you have only risked 5% of your investment and the other 95% is diversified with the market.
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May sound harsh but I agree with comment above. Genuinely good advice.
If you insist on investing in single stocks I would say it largely depends on the amount of exposure you aim for really.
The more you know about a company, the market and the economy, the more you can allow yourself to be concentrated in stocks which you have great conviction with.
But the less you know about the sector, tech etc. the better off you are probably with a Global or US index fund.
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I’ve been reviewing ETFs and most seem to be losing money. I have $1k a month to dispose of and feel like I should capitalize on better business instead of putting 33% into each. I’ve heard/read that I should both diversify AND capitalize. I’m investing regardless…any other suggestions?
You’re looking at too short a timeline then or at the wrong things.
Start with a good book. Tim Hales Smarter Investing or Lars Kroijers Investing Demystified. Don’t do anything until you have a clue what you’re doing.
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Thx! I added them to my shopping cart.