I support numbers like 3-10 for a portfolio primarily to those who are ānewbiesā and just starting. itās about human attention span and being able to retain enough information to make critical decisions.
I like Warren Buffetts view, approach stocks like you are buying the company itself to run as a company.
If you donāt know which company to buy then dip your fingers in the market (ETFs etc) but usually a short search will turn up who the market leaders of any particular industry or sector happen to be and they tend to be the most common names you will likely have heard of before. ETFs tend to have a few high achievers and a bunch of mediocre that will cause your profits to lag or swing about. though lagging is good during a downtrend, I like to see growth as responsive and pronounced.
if you know the business well enough and you know their customer base you can make a decision. you donāt need to perfectly know everything about the company (you arenāt actually running it, and few of us will have the education/qualifications to make sense of all the data)
I chose to open a position in Pepsico because I like their product, I know how its received by others and I can visibly see the companies interactions and moral responsibility to environmental and social causes. they own a variety of very popular snack and beverages that will sell (albeit less during these times) consistently through all tides as people seek comfort and familiarity.
I currently lack any real diversification and instead of buying an ETF I would rather buy a position in Berkshire Hathaway instead. putting my money with those who I know are far smarter and savvier than myself.
the above is entirely due to my choice to avoid ETFs and Bonds in my portfolio for the immediate future.
I would recommend to add consistently even small amounts to your position, to diversify early with at least 10-15 stocks (fractional shares make that easier when you begin), donāt put money that you might need in the next 6-12 months.
Thanks for this. My intention is 5 - with 3 ETFs and 2 stocks. Adding Ā£50 each month. Iām not worried to much about loss as it motivates me to save!
I did that and ended up getting Unilever sat in the red by Ā£100+ for so long I now just want it to turn green to move my cash to buy more Realty Income and Pepsico before they leave my red entirely xD but I hesitate to because its my only UK stock right now and I am in dire need to up my UK portion as a weight against my US majority (FX rates are making me cry :S)
Donāt listen to advices. Everyone is wrong and everyone is right. You are in the beginning you canāt see the difference. You need to survive. Buy ETFs and study. Save money. You need money to make money. And then with experience and skills you will see the bigger picture.
My portfolio is the opposite to @Dao and @CavanHaganInvesting, besides that I am mainly liquid/gold currently, I have only invested in European stocks and my plan for when I actually invest the rest is for only around 10-15% to be US Stocks / US Indices ETFs and about 5-10% Emerging Markets and selected Japanese/South Korean companies.
Lets see how it turns out, its risky business investing but it also is risky waiting. Also, past results say that US stocks grow more than European, but I prefer to invest in European stocks that I can understand and follow more easily.
ItĀ“s not all about momentum, look at the stock and āvalue itā (evaluate) to see if it is at a fair/cheap price or whether it is expensive.
Things that I look at: Its business model (simplified), its debt, its cash, sales trend, margins, basic look at possible growth and competitors, etc.
sat in the red by Ā£100+ for so long I now just want it to turn green to move my cash to buy more Realty Income and Pepsico before they leave my red entirely xD but I hesitate to because its my only UK stock right now and I am in dire need to up my UK portion as a weight against my US majority (FX rates are making me cry :S)
