I’m a 75 yr old investor with a portfolio of 30 stocks. The only advise I’ve heard consistently over the last 50 years is DIVERSIFY. Usually the advise is to not have more than 5% or so in any one stock.
Then I see that Warren Buffett has 40% of his holdings in Apple.
Comments, please.
This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.
Buffett says that diversification is protection against ignorance, but makes little sense if you know what you’re doing.
I tend to over-diversify, partly because it helps me worry less and partly because I enjoy researching new investments. I rarely teach the level of certitude about an investment that Buffett seems to often enjoy, but it clearly works well for him.
And, of course,
I’m working with a lot more ignorance than he is.
My portfolio is pretty concentrated in my 10-15 favorite ideas most of the time, that’s usually well over half of the portfolio, but I typically have dozens of very small positions as well. I have different levels of anxiety for different kinds of stocks — I’m fine with Berkshire Hathaway being 10% of my portfolio, but would be very itchy if really expensive or momentum driven stocks crest that number (SHOP, for example).