Yet, research has shown that one out of five individual investors think they should have 10 % or less
of their stock portfolios in international equities.
As you may have guessed, cash will also have some impact on the volatility
of stock portfolios as well, which gets to our next question.
For everyday investors, some of the more popular
types of stock portfolio strategies focus on either low volatility stocks, dividends, cash flow and value.
But for the
bulk of your stock portfolio — the core positions that really make up your nest egg — look for companies that have a long history of paying and raising their dividends.
Keeping in mind that is the worst case, while the far more likely
outcome of your stock portfolio in any given 5 year period will have average annual growth of over 11 %!
You can research and choose stocks individually, but we strongly recommend that
most of your stock portfolio be made up of mutual funds or ETFs (exchange - traded funds).
Mike has made the point that there isn't a big difference between being sent some money every month or redeeming a small
portion of a stock portfolio as needed.
The following chart, taken from the paper, relates actual (realized) past returns to the returns estimated by survey participants based on responses to: «Please try to estimate the past
performance of your stock portfolio at your online broker.
I do vary my stock holdings versus cash, but I limit my cash to 20 %
of my stock portfolio at maximum because I have been generally good at picking stocks over the years.
My dividend growth strategy has an annualized average return of 14.2 % since 1977, I get an increase in income each year (without hassling or losing tenants) and i have the advantage of being able to hedge or protect the value
of my stock portfolio with stock options during corrections which I don't know how to do for my real estate portfolio.
For now, about 70 %
of the stock portfolio of the Strategic Growth Fund is hedged against the impact of market fluctuations, with the remaining 30 % hedged with put options only.
As Benjamin Graham explained, «When changes in the market level have raised the common - stock component to, say, 55 % the balance would be restored by a sale of one -
eleventh of the stock portfolio and the transfer of the proceeds to bonds.
Each time a valuation threshold is reached and a stock sale is executed, the threshold needs to be reestablished so that if the stock market continues higher, further
reduction of the stock portfolio would occur.
Seriously, SNB should be liquidating as
much of its stock portfolio after this masterful FX performance... And yet...... they don't seem prepared to pull the trigger.
WANTS TOO MUCH PERSONAL INFRORMATION - Make sure you guard yourself completely if anyone asks you for personal information like bank account details or details of the
worth of your stock portfolio or the value of your home.
Automated stock purchases on a regular schedule increases the likelihood that the overall
cost of your stock portfolio is not particularly expensive.
Almost 50 %
of my stock portfolio consist of Swiss companies (Nestlé, Roche, Novartis, ABB, UBS, Oerlikon etc.) and European businesses (Royal Dutch Shell, Deutsche Telekom, Banco Santander, Orange etc.) make around 40 % of my holdings.
You also need to diversify your holdings within those asset classes and hold, in the
case of a stock portfolio, a variety of stocks — from risky to less risky, in different currencies, in different industries — to reduce your risk exposure.
Way too many people don't understand the value of dividend income investing that they think that just seing simple capital gains on stock is all that determines the
success of their stock portfolio.
I give you professional
management of a stock portfolio with 30 - 40 different stocks and cash, which is very close to a clone of my own portfolio, in which 70 % + of my liquid net worth is invested.
As part of demonstrating the great
benefit of my Stock Portfolio Tracker, you can have a glimpse of my current portfolio through the demo as well.