Maximum Percent for Single Security?

[tmm99]

Several I own are about 1%.

[davebarnes]

For me: zero.
For my father (who died in January at age 95.5 and day-traded inside my mother's Roth): 30%.
His return for 2017 was 27%. He was heavily into Boeing.
He was always good at picking stocks and mutual funds. Really good. For 50 years.
He might have been 100% Magellan Fund during the 60s and 70s.

[53anddone]

Of course before I retired my wife and I had probably 50% plus of our new worth tied into the company I worked for through years of long term incentives, Options etc. that were totally illiquid. Once the company was sold and I cashed out I said never again would I be in this situation.
Today as I have the time I am fine keeping track of 20 or so individual companies none of which (save one) make up more than 2% of my total assets, the rest being ETF, Cash, CDs etc.

The stock holdings I do have are primarily for income and I don’t trade them much.

[Koogie]

For me it is 5%

I am also cognizant of the absolute dollar amount in any one holding. For individual stocks, I wouldn't feel comfortable going much over 100K. Luckily, at this point in my life those two numbers amount to more or less the same thing. If our portfolio grows though, I would still stick with that dollar threshold instead of a percentage.

Broad market index ETFs though ? Thems suckers can keep growing all they want....

[willatl]

I manage a portfolio of 25+ individual stocks, only dividend payers in taxable account. I aim for a max of 5% of the total portfolio. That being said I have a few that I bought during the 2007-2009 period that are well north of that (SDY, MSFT, INTC, DUK). So I have a lot of LTCG in those positions that I've held off on selling. Just RE this year so next year may be a good time to pull back a little on some of those. I don't reinvest divs, they go into the settlement account, gives me a cash account to tap if I need it or buy other stocks for the portfolio.

[njhowie]

Timely article:

https://www.usatoday.com/story/money...ngs/694863002/

[Oz investor]

Quote:

Originally Posted by Totoro Statistics like this ignore one aspect: how well can you understand and follow up 60+ different companies? That introduces a new risk: let's call it ignorance risk. In the same vein: how is your tenth best idea going to be vs. your best idea? My own bandwidth is limited, tracking 10 companies is quite a cognitive load already. So it depends on your level of involvement, I'm pretty binary in that perspective. If you are highly involved, concentration is a benefit. If not, it is a liability and you should stay away, and go for a broad index. An extreme example is owning your own business: highest involvement, high concentration yet can still be a great idea.

this is where i differ from most

first of all i hold over 200 stocks

how do i track them all ?

I DON'T !!

what i do is if a stock is up ( say ) 150% i sell down taking out the original investment cash ( and costs ) the aim is to sell 40% of the holding and keep 60% effectively letting the profits run , and reinvesting the cash elsewhere .

i inherited a quartet of stocks in 2011 at the start of my investing adventure and one stock dwarfed the rest of the portfolio close to 40% initially since i was still working at the time , i put surplus cash into other stocks ( specifically MQBKY .. well the ASX listed version of it )

i brought up MQBKY up to 30% and when in sufficient profit reduced swapping into BHP ( now the 3 rd biggest holding just below 5%)

current my biggest holding is still 10% with MQBKY at roughly 5% but these two stocks ( and about 30 others ) has no investment cash at risk in them .. 100% profit running for me

so i have over 35 stocks at absolutely no ( cash ) risk , some stocks that rarely traded , but pay dividends ( one little gem has paid me 110% of the purchase price in divs in just 6 years )

and lets face in my main aim is ( retirement ) income but with some attention to asset growth ( preferably via extra shares courtesy of selected dividend re-investment )

yes i am aggressive in this approach but the plan was to retire at the start of 2020 , but fate decreed i cease work in 2017 , i NEED to make that money work hard just in case i live past 2026 .

cheers !!

[OldShooter]

Quote:

Originally Posted by Oz investor ... so i have over 35 stocks at absolutely no ( cash ) risk ...

With respect, I think this is clearly a version of the sunk cost fallacy.

Your risk is that the net present value of the future total return of each of your stocks will turn out to be less than you could sell the stock for today. This analysis (properly) does not consider any cash flows that occurred in the past.

The stock doesn't know or care, and the market doesn't know or care, what your sunk cost in the stocks is, even if it is negative. And your view of risks shouldn't consider this sunk cost either.

More here:https://en.wikipedia.org/wiki/Sunk_cost

You might also benefit from reading a little bit about Richard Thaler's idea of the "Endowment Effect." The short version is here: https://en.wikipedia.org/wiki/Endowment_effect. The longer version is explained in Thalers "Misbehaving" and Kahneman's "Thinking Fast and Slow." Both are Nobel prize winners who have written very accessible and important books.

[Oz investor]

so the dollar cost averaging is better ?

( buying fixed $ amounts of the same stocks say every six months and hoping the company doesn't fail ( or get taken over when you are in a capital loss position )

so far my life expectancy goes like this the first guesstimate was a 50% change of surviving to November 2016 only diagnosis of chronic but severe heart muscle damage m the nect round of tests discovered a blockage in the LAD within 2 weeks that had turned into an aneurysm and within another 2 weeks turned itself into a lesion but damaged one inch of artery by almost pushing the cholesterol buildup

almost completely through the artery wall ( so the artery looks a little like Swiss Cheese for about an inch ,

the hospital decided to put in an experimental stent ( which is receiving some press )

Abbott laboratories will be happy if i survive until March 2022 to complete their research trial , and the doctor and cardiologists are happy i can just walk out after the appointment

so unlike many i don't have a good time-frame to work on

cash reserves ( and income ) for the rest of my life will have to suffice ( however long that is )

there are other future options , a second stent , a bypass , a heart transplant or a heart/lung transplant .. whatever happens i will not be very active before 2022 .

so first, i cannot afford a total capital loss on the portfolio , if the health stays on the better side of fragile i won't be a forced seller in bad times .

unless the unexpected happens i do not expect any significant extra cash to inject at a later time and the wretched market won't correct so i can exploit some opportunities

i am mainly focus on income ( from the divs/interest ) and the reliability of SOME cash flowing in even in the worst of times

i have seen a government trustee in action looking after the estate of an infirm relative , and if i could i would release the trapdoor of the gallows myself , criminal doesn't come close ( and that section has a putrid reputation in the state government .. so it isn't just me )

so i have a fixed amount of cash invested some extra dividend cash to tickle in when available and an extremely bullish market ,

i am certainly not going to exit completely proven winners unless there is a very good reason to do so , nor am i willingly to pay increasingly higher share prices as over-valued stocks climb ( i don't care whet the ETF fans say )

i buy ETFs in major dips , not on glowing returns reports

and why 200 ( plus ) stocks well even during the US 'great recovery ' BIG businesses are failing or being acquired cheap by predators ( Australia is no different in that respect )
i expect company collapses in the next downturn but WHICH companies , is the problem .

[Oz investor]

i used to go to school with this guy , he would probably laugh and call me a cheeky brat

at this tactic


https://analysights.wordpress.com/tag/theodore-bos/

[braumeister]

Please do not post “naked” links, defined as links posted without explanation, interpretation or context.

[Oz investor]

i would have thought a trple Ph.D , and ( former ?) university faculty dean , might have been well known over there especially since he co-wrote several text books


Introductory Business and E... Introductory Business and Economic Forec
by Paul Newbold, Theodore Bos

Stochastic Parameter Regression Models
by Paul Newbold, Theodore Bos

Research in International Business & Finance Vol. 1: The Economic Effects of Multinational Corporations
by Robert G. Hawkins (Editor), Theodore Bos, Richard M. Levich


Research in International Business & Finance Vol. 7: The Modern International Environment
by Robert G. Hawkins (Editor), Theodore Bos, Richard M. Levich

to mention a few

the behavioral psychologist quoted in the other post on 'sunk costs ' doesn't seem to account for the case where i recover all the investments costs and still have a residual quantity of an asset that i can crystallize a gain in the future when i see fit ( for the sake of the argument ignoring any dividend gains while waiting for the final exit )


he seems to assume the capital value of an asset will automatically decrease after purchase .. i hope he is never in charge of my finances

[OldShooter]

Quote:

Originally Posted by Oz investor ... the behavioral psychologist quoted in the other post on 'sunk costs ' doesn't seem to account for the case where i recover all the investments costs and still have a residual quantity of an asset that i can crystallize a gain in the future when i see fit ( for the sake of the argument ignoring any dividend gains while waiting for the final exit ) ...

Cost in an investment is ignored because it is irrelevant to rational decision making (except for tax considerations). But I'll stop trying to explain now.

[Oz investor]

sorry i disagree i see it as cash leaving or entering the bank account

and if it seems i am buying a cash flow ( or income ) that would be very close to accurate

surely a trader doesn't see it as sunk costs if he sells for a profit

but cheers !!

[UnrealizedPotential]

For me it is 0%. I am a terrible stock picker. I gave that up years ago. For someone who has the time and talent to pick one, I would say 5%, tops. It's just too dangerous if things go wrong IMO.

[scrabbler1]

The only time I owned any actual shares of stock was when I was a kid and my uncle bought me 1 share of Ford Motor Company. It got me interested in stocks and the business pages in the newspaper. And it was nice earning money without having to do anything (like bank interest), something I have become quite good at over the years. At some point in my teenaged years, the Ford share got sold.


It's mutual funds only for me now. I did own shares of my employer stock in the last 11 years I worked. But we could not sell all of them, only what we were permitted to unload (1/4 to 1/3 over the years). We were given the shares as a fringe benefit. The company went public after I left, so the employees were allowed to buy and sell freely.

[CyclingInvestor]

I have been 100% individual stocks since 1993. In my accumulation phase 1993-2006 I had positions of up to 20%. Since retirement this has drifted down, and now hold no more than about 6% in any one stock.

[Oz investor]

i am about 50% in actual property but i expect prices to take a major hit soon , but i hold stocks ETFs , LICs REITs an uncomfortably small amount of interest-bearing securities ( but i cannot find acceptable targets currently so have beefed up REITs )

my largest stock is about 10% but i inherited that and let the dividends reinvest