Core portfolio

[pj2105]

I would like to ask what you think should be incorporated in your 'core portfolio'. I've heard this term numerous times on the Business Channel. But they don't say what stocks should be considered core.

I assume they are refering to stocks that are a mainstay in a portfolio.

What do you think should be part of anybodies core portfolio?

 

[Mofra]

Are you considering a margin loan in the future? If so, you can narrow down your search by some basic top-down analysis; breaking up the exchange into sectors, picking the bluest of the blue in each sector, and making sure they have the highest Margin Lending ratio (ie 70% or 75% as some lenders will allow you an extra 5% on a diversified portfolio).

 

[Buckeroo]

I would like to ask what you think should be incorporated in your 'core portfolio'. I've heard this term numerous times on the Business Channel. But they don't say what stocks should be considered core.

I assume they are refering to stocks that are a mainstay in a portfolio.

What do you think should be part of anybodies core portfolio?

Low debt/equity ratio & PE, high dividend yield, stable share price with good fundamentals moving into the future - hold for 2 or more years.

Areas including utilities, energy, health, banking maybe, telecommunications maybe

Cheers

 

[son of baglimit]

Low debt/equity ratio & PE, high dividend yield, stable share price with good fundamentals moving into the future - hold for 2 or more years.

Areas including utilities, energy, health, banking maybe, telecommunications maybe

Cheers

is there such a thing as a core portfolio, considering the events of the last 2 years. weve seen many companies carrying most of the points you highlight, and theyve become laughing stocks - smashed to bits for various reasons.

i believe your core needs frequent updating, dependent on where the future is heading. right now health & energy look good, utilities & banking are finding it tough still, and each of those 4 have had their own good & bad periods in the last 10 years.

 

[Buckeroo]

is there such a thing as a core portfolio, considering the events of the last 2 years. weve seen many companies carrying most of the points you highlight, and theyve become laughing stocks - smashed to bits for various reasons.

i believe your core needs frequent updating, dependent on where the future is heading. right now health & energy look good, utilities & banking are finding it tough still, and each of those 4 have had their own good & bad periods in the last 10 years.

Fair comment baglimit, hence the maybe's.

Cheers

 

[Nick Radge]

Another variant of a 'core portfolio' could also be the type of strategy being employed as opposed to the actual stocks being held. As an example I use three trend following strategies across three separate time frames, 30 days, 10-months and 3-years. I can allocate weighting between them and then within them depending on market conditions, similar to what baglimit suggested.

Just another angle.

Nick



This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

 

[josh_in_a_box]

Another variant of a 'core portfolio' could also be the type of strategy being employed as opposed to the actual stocks being held. As an example I use three trend following strategies across three separate time frames, 30 days, 10-months and 3-years. I can allocate weighting between them and then within them depending on market conditions, similar to what baglimit suggested.

Just another angle.

Nick



This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

Interesting way of looking at it Nick, when the term core portfolio came up I automatically thought long term, "buy and hold" & dividend generating investments.

Thanks for the different perspective.

J

 

[Sean K]

To me it means high conviction long term holds.

Growth plus dividends over a long term.

Companies that will not go bankrupt.

Companies that have the right combination of capital return and growth potential.

The right industries in your investment timeframe.

It shouldn't mean swapping and changing every few weeks, but maybe you change every few months when a stock outperforms, or another underperformes.

They would normally be in the top 200 and you could borrow 70% off them on the Margin Loan. Then, once you have them as an asset, you can use that equity to buy something else.

Never let that 'asset' dissintergrate beyond control. I had a friend use a margin loan to keep averaging down his holding in BNB all the way to the bottom. He was an accountant.

Combine your trust in your own fundamental analysis with money management, support and resistance.

Invest and trade.

 

[Knobby22]

Wise words Kennas.

To have a high conviction hold it doesn't have to be in the top 200 but there aren't too many out of it.

Dividends are important. If you have a company with a history of rising healthy dividends then this reduces your risk as you are not solely relying on capital returns.

One additional point, management. If management start doing dodgy things or become media personalities then this is often a sign of worse to come. The only media CEO out there where this is untrue is Gerry Harvey. He has stopped talking horses these days and has quieted down which is a good sign that he is concentrating.

 

[gooner]

WPL, STO, ORG, OSH and to provide some diversification AWE, NXS and TAP.

Of course, this is not exactly what the professionals mean by diversified as a fairly large bias to the energy sector. But hey, they aren't making any more oil or gas............

Disclosure hold all the above

 

[lasty]

For the average punter I would be looking to hold an ETF of ASX200 and then overweight in certain sectors. eg utilities,miners,discretionary,finance etc.
The ETF will be your core.
Its simple.

 

[gooner]

For the average punter I would be looking to hold an ETF of ASX200 and then overweight in certain sectors. eg utilities,miners,discretionary,finance etc.
The ETF will be your core.
Its simple.

lasty

Good comment - very low fees around 0.2% on some of these. Particularly good for those who do not want too much work with rights issues, dividends etc etc