How many stocks do you hold in you portfolio?

[dingoNZ]

This came up in another thread recently and there seems to be a lot of mixed opinions on how many different stocks they feel comfortable holding. Just curious as to what the general consensus is. Interested to see what peoples opinions are.

So how many different companies do you hold in you portfolio? Please vote :)

[MAC]

Depends on too many variables to ascertain a generic outcome.

Time horizons, type of investor, growth, value, income, trader, also whether one just has stocks or if diversified elsewhere, property, cash, classic cars, etc. Life circumstance, dependents, how far from retirement, young folk can take on more risk.

Each to their own, although if you are solely in stocks then you need to assess your overall risk profile.

Calculate your portfolio beta, set diversification limits based on sector risk and the stage a company is at, start-up, growth, maturing or dividend paying, also on the quality, plausibility and reliability of numerical guidance and management etc. Consider holding options if or when you can get them, also a good way to manage risk.

The number of stocks you hold should fall out of the above.

[barleeni]

10 - all small holdings until I get a better grasp of the game.

[Okebw]

Usually 10 or so long term holds and 4 or 5 speculative Aussie stocks. With a lot less weighting of course

[kizame]

Usually 1-2 companies at the most asI'm not usually in for too long.

[tim23]

19 stocks plus a few specs like BRL, SNK, VET & PEN on the ASX

[OldRider]

Thought this was interesting

From Miles Udland at Business Insider:

[James O’Shaughnessy of O’Shaughnessy Asset Management] relays one anecdote from an employee who recently joined his firm....

O’Shaughnessy: “Fidelity had done a study as to which accounts had done the best at Fidelity....They were the accounts [of] people who forgot they had an account at Fidelity.”

There are numerous studies that explain why this happens. And they almost always come down to the fact that our minds work against us. Due to our behavioural biases, we often find ourselves buying high and selling low.

[Crystal Ball]

Hi dingo nz, I hold a lowly 2 however they are both speculative so probably quite risky. High gain if they pay off.....

[BlackPeter]

Actually, there is a lot of maths behind determining the optimal number of assets to hold in a portfolio (start with http://en.wikipedia.org/wiki/Modern_portfolio_theory and than follow the appropriate links). To cut it short - the optimum (low beta, but not too high diversification cost is somewhere between 13 and 20 statistically independent assets. The problem with this information is however, that it is hardly possible to find that many statistically independent assets (related industries, related markets).

Discl: 40% of my assets are spread over some 25 stocks, the rest is spread across real estate, life insurance schemas and funds like Kiwisaver. I am probably overdoing the diversification somewhat, but so far can live with the diversification cost (and sleep better during the nights).

[fungus pudding]

I'm underdoing the diversification bit. I hold a fair number of shares in six property trusts. A minimum of 100,000 and max of 300,000 shares in each. My only other assets are commercial buildings. I don't know the first thing about the share-market, or any listed businesses and have spent my life on buying and never selling. Just stacking up income with every move. Started buying LPTs a few years ago as I couldn't be bothered buying another building, and getting past it anyway.
They give a good income, particularly with the PIE tax status - most equate to between 8 and 9% for a 33% tax payer. Also a bit of growth - don't know how they compare with the market in general, and don't care either. I'm happy - but then I'm easily pleased. :D

[GR8DAY]

HI FP (or anyone else)......im needing to invest some of my elderly mothers funds to part pay for her residential care (old folks home). Looking hard at LPTs. Are you able to tell me when the next divis are due to be paid and in which companies. I guess we really need to know the approx record dates so we (she) can pick up the next dividend(s). Also do yo have any preferences?.....maybe you have identified just a couple that have better prospects for growth as well as good payout?? Thanks in advance.

[777]

Most pay March,June,Sept and Dec. KPG is only twice yearly June/Dec. AUG is Feb/May/Aug/Nov.

[macduffy]

How many stocks?

Far too many - but a lot of them are small holdings bought - and kept - because they show promise, or did, at some stage!

Serious, core holdings? About a dozen.

[fungus pudding]

HI FP (or anyone else)......im needing to invest some of my elderly mothers funds to part pay for her residential care (old folks home). Looking hard at LPTs. Are you able to tell me when the next divis are due to be paid and in which companies. I guess we really need to know the approx record dates so we (she) can pick up the next dividend(s). Also do yo have any preferences?.....maybe you have identified just a couple that have better prospects for growth as well as good payout?? Thanks in advance.

777 has given you dividend dates, or at least months of payment. Day of month can be all over the place with record date often around 2 weeks in advance. I don't think you can pinpoint record or div days in advance. As far as preferences - I don't really take much notice of what's going on but I like a spread of industrial (PFI) office (PCT) retail (KPG) along with Stride, Goodman and Argosy who seem to have a spread of all sectors.

P.S. I suppose if I have a preference it might be Stride, only because they have performed so well over the few years I've had them. Mind you, as they say, past performance is no guarantee of any damn thing.

[GR8DAY]

......cheers 777 and FP, great help. Never heard of Stride FP but I'll look into that one also. We've only got about 300k to invest for her care so we're really after the highest yield stocks. Even with her super (about 350pw I think) we are still going to fall well short of her $900 weekly bill at the old folks home......so it's good bye to that inheritance!

[fungus pudding]

......cheers 777 and FP, great help. Never heard of Stride FP but I'll look into that one also. We've only got about 300k to invest for her care so we're really after the highest yield stocks. Even with her super (about 350pw I think) we are still going to fall well short of her $900 weekly bill at the old folks home......so it's good bye to that inheritance!

Stride was formerly DNZ. Name changed a while back. Had an interesting start as it was an amalgamation of properties that Money mangers syndicated under Doug Somers Edgar. Like everything he touched, they fell to bits, and the company of DNZ took over the mess and ran as an unlisted company for a while. They've been running well ever since it was listed.
That sort of money should give you a reliable income of around $15,000 per annum(after tax) so depending on life span, and increase in rental income, building value and hence share price, I'd say - being conservative that you should have maybe 200k after 10 years if you nibble off capital from time to time. (That's no more than guess work, which when we did such things on the back of a cigarette packet were accurate, but I don't smoke anymore - hence don't rely on my guesses. :t_up:) So maybe goodbye to a third of the inheritance. Good luck.

[Bjauck]

......cheers 777 and FP, great help. Never heard of Stride FP but I'll look into that one also. We've only got about 300k to invest for her care so we're really after the highest yield stocks. Even with her super (about 350pw I think) we are still going to fall well short of her $900 weekly bill at the old folks home......so it's good bye to that inheritance! In an environment of falling interest rates, it would be tempting to take on extra risk to meet the ever increasing rest home fees. A certain amount of risk taking may be worthwhile as the rest home fees may eat into the capital anyway. P2P loans could be a possibility as could oversold blue chips with good yields (perhaps including a small dabble with Chorus with a gamble that dividends may resume sometime soonish)

Despite a toughening line on trusts, those rich folks who have their assets in well-established family trusts can still access the rest-home subsidies. Perhaps, just another example that egalitarian NZ was only ever a myth. Your mother's experience, of the current funding of rest home care, does nothing to encourage personal private saving. I have a family member in the same position and know of several others whose moderate assets have been likewise depleted. Remember Jim Bolger's mother who could access rest home subsidies by virtue of her assets being in a family trust?

Disc: CNU shareholder; Have seen several people disinvest to pay rest home fees

[GR8DAY]

......Thanks once again FP and BJ. Yes we will almost definitely be eating into mum's capital (to the tune of about $10k pa). I have selected a group of Higher Yielding stocks (besides LPTs) and Im amazed at the Yields that are now attainable 8% plus up to and over 11%. Possibly now also with growth prospects due to a retracting market. Some Ive highlighted are ....AIR,CONTACT,HELLABY,MIGHTY RIVER,GENISIS. So I think with these and a selection of LPTs we may be able to reduce the Capital loss to as low as $5k pa which is bearable. My mum is 88 and in good health so who knows. $900pw for a very small and basic room is abhorrent but there we are. Anyway she's well looked after and happy there so that's the main thing.

[Bjauck]

Gr8day, I imagine that your calculations are allowing for tax. For those who have to pay in full, I think the current "no frills" "maximum contribution" rest home fees amount to $952/week in Auckland, which, of course, have to paid for from the resident's after-tax net income. I imagine any increase in minimum wage rates (which will affect many employed by rest homes) will have a flow on effect in increasing the "maximum contribution" amount to be paid by those unable to claim a subsidy.

[fungus pudding]

I have a family member in the same position and know of several others whose moderate assets have been likewise depleted. Remember Jim Bolger's mother who could access rest home subsidies by virtue of her assets being in a family trust?



Of course. Why should people in their last years be able to preserve money to leave to family or whoever, and expect taxpayers to cover their expenses? Imagine some wealthy person's kids being left a pile of dough when the poor beggar on a minimum wage pays tax to support the rest home resident. That would be grossly unfair. We should all pay for our own living costs as long as able. For all that, use whatever is legally available, but never complain about assets being depleted by being spent on the asset's owner!

[Harvey Specter]

the poor beggar on a minimum wage pays tax the poor buggar on minimum wage probably doesn't pay tax, especially if they have a kid. But other than that, I agree. While I can accept super not being means tested, rest home subsidies should be including full look through of trusts.

[Bjauck]

Of course. Why should people in their last years be able to preserve money to leave to family or whoever, and expect taxpayers to cover their expenses? Imagine some wealthy person's kids being left a pile of dough when the poor beggar on a minimum wage pays tax to support the rest home resident. That would be grossly unfair. We should all pay for our own living costs as long as able. For all that, use whatever is legally available, but never complain about assets being depleted by being spent on the asset's owner! Fair point -except it is the more modestly wealthy who usually end up unsubsidised, whilst the more seriously rich with long-established trusts are still able to claim the subsidy.

Some elderly folk are able to remain independent in their own homes, whilst others become more feeble in old age, necessitating rest home level care. So I think there is a medical element for the need for both rest home care and nursing home care and the full cost for both should be borne by the Health Boards without means testing, as with general hospital care. Any extra tax needed to cover the extra expense would be largely borne by the wealthy (including trusts!) anyway.

There is no insurance available in NZ to cover someone if they end up requiring long-term rest home level care - unlike the private medical insurance available for shorter-term general hospital fees.

[macduffy]

I get a Yogi Berra "deja vu all over again" feeling reading this thread. Havn't we been here before, somewhere?

Meanwhile, the "how many stocks....." subject seems to have slipped the net!

;)

[Bjauck]

I get a Yogi Berra "deja vu all over again" feeling reading this thread. Havn't we been here before, somewhere?

Meanwhile, the "how many stocks....." subject seems to have slipped the net!

;)
True. As ever, one thing leads to another and I guess you sometimes cannot discuss one topic in isolation from other topics.

Whilst the objective of a portfolio, being to finance long-term rest home care in this case, is relevant to the optimal number (or perhaps type if that is still on topic?) of stocks to hold in the portfolio.

Whether it is just or consistent for society to expect such an objective is important but not directly relevant. Bear in mind that someone is assessed as needing rest home level care, when they are physically and/or mentally unable to live independently.