Australian (ASX) Stock Market Forum

Growth portfolio

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This is probably the wrong question to ask a forum of predominantly traders.
I am interested in building a portfolio, which contains mostly growth stocks. Those stocks which may undergo some volatility but ultimately should show some significant capital gains in 5-10 years. A dividend reinvestment plan at a discount to the market rate would be preferable too


Any ideas?
 
What do you define as a growth stock?

If people knew that they were going to grow then it should already be priced in...

Also, if people are to offer opinions please make sure they are backed up with some brief analysis in order to prevent this thread becoming ramp central.
 
What do you define as a growth stock?

If people knew that they were going to grow then it should already be priced in...

Also, if people are to offer opinions please make sure they are backed up with some brief analysis in order to prevent this thread becoming ramp central.


Haha good point about the ramping. I suppose I define growth stocks as those stocks which should return a fairly reasonable capital gain, in the long run, specifically with the buy and hold mentality. I am not interested in penny stocks. So I guess mid to large caps would be my main area of interest.
 
Look for monoply stocks with big margins.

CSL, COH, ASX, WOR, BHP, RIO, LEI...

Please provide more detail on these.

Correct me if im wrong, but dont BHP, RIO and LEI, WOR operate in the same industrys, therefore are not monopolies... :(
 
Something I am working on at the moment is replicating an index (such as the ASX20). From there adjust the weightings based on F/A of each stock to try and get a mix that gives a portfolio beta higher than just replicating the index (say 1.2 v's 0.9).

In THEORY this should provide higher returns than the index itself, whilst still being relatively risk adverse.

Perhaps a managed fund may achieve the same result as the above, but I enjoy being actively involved and can avoid companies I don't like for what ever reason. I can also have the occassional play with spec stocks.
 
In THEORY this should provide higher returns than the index itself,

Not true. An index is cap weighted. Are you going to be holding 10 times the amount of BHP than LEI. Very hard to beat an index picking the winners in that index then holding equal amounts.
 
Are you going to be holding 10 times the amount of BHP than LEI.
Why not? After all isn't it all about trying to tip the odds in our favour, which is what I am suggesting. If you merely replicate the index then you will get the same returns as the index. Increase the beta of your portfolio and you increase your potential returns (and risk).

I suppose I shouldn't have said "should" provide higher returns.
 
Why not? After all isn't it all about trying to tip the odds in our favour, which is what I am suggesting. If you merely replicate the index then you will get the same returns as the index. Increase the beta of your portfolio and you increase your potential returns (and risk).

I suppose I shouldn't have said "should" provide higher returns.

But I guess the real question is why?? You are not a fund manager why have the restrictions of such a small universe. :confused: Then why heavily weigh your portfolio to a couple of stocks. Seems like an idea back fitted.

Not to mention sensible MM.
 
It gets back to eddyl's original question - growth portfolio with a 5 - 10 year time frame. If you want to reduce risk then stick your money in a 5 or 10 year managed fund or replicate the index. I was looking more at a do it yourself option with a tweak.

I don't actually invest in this manner, but it is a portfolio theory I have been working on. As to if it works..........?

I just completed uni and have a lot of ideas running around my head at the moment. :)
 
I don't see why it can't work.

At least you won't be paying a managed fund a fee to do such a simple job as weighting your portfolio to an index, why don't people just use an ETF if they want to do this? Obviously not the liquidity here, but in the US.

Maybe not adding the specs, but replicating an index with a slightly higher weighting to the commodity sector, is one possibility I see as a viable option.

IMHO, for the longer term, food, energy, precious metals being the areas of most importance.

Has a decent chance of beating managed fund returns IMO. Or maybe not. :2twocents
 
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