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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76384  
Subject: Re: do you limit your holdings to a % of portfol Date: 3/21/2014 11:27 AM
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Rayvt: "Target is not to have any one stock be more than 3% of your portfolio. Absolute max is 5%."

I am surprised you use 3%.

I prefer a 5% individual cap and might let ift drift somewhat higher if it was fundamentally sound, but not more than 8%.

I also consider from the view of portfolio diversification. A 5% cap then requires at least 20 different positions, which is enough to diverisfy if chosen carefully.

At 8%, that would really be 12-13 positions, which is getting too small to properly diverify.

At 20%, that might be no more than 5 positions, which is a cvery concentrated portfolio and impossible to properly diversify.

Regards, JAFO
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