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No. of Recommendations: 1
Hi Everyone,

Currently I have a 35 stock portfolio, I think it is too diversified for an individual investor like me to keep track and I feel owning more stocks than necessary may take away the impact of large stock gains and limit upside.

Back Story:
I started investing this March, after deploying my initial capital in the months of Mar2020 to June 2020. I am regularly adding to my portfolio with picks form Stock advisor and Rule breakers. As of now I am up 80% on total investment.

This is what my current portfolio looks like:
1.Large-Caps: 15 Companies – 31% of Portfolio (Max allocation for a single company 3.63%)
2.Mid-Caps: 10 Companies – 39% of Portfolio (Max allocation for a single company 12.76%)
3.Small-Caps: 3 Companies – 12% of Portfolio (Max allocation for a single company 9%)
4.International: 7 Companies – 18 % of Portfolio (Max allocation for a single company 6.95%)

Most of the picks are recommended in at least one of the Motley Fool services. At the time of investing into each stock I opened up a position that’s at least 2% of my portfolio size. I don’t want to sell any of my positions and want to let them run.

How do I invest going forward?
1.Should I regularly invest 2% in new stocks and not think about too much diversification.
2.Or should I add to my existing positions that are small rather than investing in new stocks.

Could anyone please suggest how I can continue building my portfolio.
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No. of Recommendations: 2
Hi SandeepReddy,

With 35, I would be more inclined to invest new cash into existing positions rather than new ones.

I would pick those that have the strongest growth.

While I do look at the diversification of our portfolio, I do not manage the portfolio based on diversification. Kind of like "look but don't touch."

If I had a portfolio of ETF's or mutual funds, yes I would re-balance and look at asset classes and such.

With a stock portfolio, I invest in the business, not the ticker.


Does that help you?

Gene
All holdings and some statistics on my Fool profile page
http://my.fool.com/profile/gdett2/info.aspx
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No. of Recommendations: 0
Thank you, for taking the time to help !
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No. of Recommendations: 0
"This is what my current portfolio looks like:
1.Large-Caps: 15 Companies – 31% of Portfolio (Max allocation for a single company 3.63%)
2.Mid-Caps: 10 Companies – 39% of Portfolio (Max allocation for a single company 12.76%)
3.Small-Caps: 3 Companies – 12% of Portfolio (Max allocation for a single company 9%)
4.International: 7 Companies – 18 % of Portfolio (Max allocation for a single company 6.95%)"

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Just a mention - diversification is more than the market sense of a company. Also,
you should consider the industrial classification and the relationships between
industries. The idea is to reduce risk so that you do not have companies that all
"tank" at the same time - e.g. cyclical companies that are not dependent upon the
same drivers for earnings. Having an all "utility" investment in large, mid, small
and international stocks would not provide diversification resistant to a market
decline in demand for utilities.

Just a thought.

Howie52
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