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What if anything are you too heavy on?

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constable

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Well I have made this mistake before where ive placed a stock in a position that is over 30% of my portfolio! It wasnt pretty after the fallout thanks sen.
Anyway im sure im not the only one that finds a stock and gives it more funds than what is technically feasible.
Do others fall for this where fractional posistioning goes out the window because you think youve found something thats going to bring home the mother load?
I know im too heavy on 3 stocks (eka to name 1) at the minute and although diversification has been the catch cry of every taxi driver lately im just wondering do you need to spread your stocks so thin?
If one out of a few stocks in your portfolio (of say 4 or 5 stocks) gains several 100% then are you better off ?
A lot of hypo's and generalisations here but do you get the jist?
- heaps of little parcels in speculative stocks
- handful of speculative stocks
I think for the latter homework/research is absolutley paramount.
Note Lt investors bugger off I'm looking for speedy bucks!
 
constable said:
Well I have made this mistake before where ive placed a stock in a position that is over 30% of my portfolio! It wasnt pretty after the fallout thanks sen.
Anyway im sure im not the only one that finds a stock and gives it more funds than what is technically feasible.
Do others fall for this where fractional posistioning goes out the window because you think youve found something thats going to bring home the mother load?
I know im too heavy on 3 stocks (eka to name 1) at the minute and although diversification has been the catch cry of every taxi driver lately im just wondering do you need to spread your stocks so thin?
If one out of a few stocks in your portfolio (of say 4 or 5 stocks) gains several 100% then are you better off ?
A lot of hypo's and generalisations here but do you get the jist ?
- heaps of little parcels in speculative stocks
- handful of speculative stocks
I think for the latter homework/research is absolutley paramount.
Note Lt investors buggeroff im looking for speedy bucks!
Click to expand...

Through fixed fractional position sizing, im not fussed even if 50% of my trading capital is in one stock only.

As long as you manage your money and risk ie. through stops, then it isnt an issue whether you have few or many stocks in your portfolio as long as your risk is the same for all positions.

The problem is that most people think that if you have more money in one stock (ie. >10% of your capital is in one stock, a big no no for some people) you are exposing yourself to too much risk, ie. you can lose more, but as explained above, this doesnt have to be the case, and as long as its not, then there should be no problem in only holding a few stocks.

Its been a long time since i had more than 3-4 stocks at a time.
 
INL...............................

I usually try and keep it even @ 5 or 6 stocks (10 to 15 grand in each) all spec stocks - one s/term, 2 mid term and the rest looking at least for CGT relief time.
Split when they double if something else has caught my eye or put a tight stop on it and keep looking.
You guys trade a lot more than me (I can't be bothered) so to each their own.
Good luck with EKA mate- depth has kept me out after I was stopped out of ADI and then Antares.
80BCF share should put a smile on your face though (if your in for the testing).
 
Agreed nizar and will take it one step further and say that stop losses are the single most important thing when it comes to trading...period.
My portfolio at the minute ( and it is a minute thing somedays) is
- 31%
- 25%
- 13%
- 10%
- 5%
- 5%
- 4%
- 4%
- 3% = 10 stocks 100%
 
I'm far too heavy on Uranium, purely cause the ones I bought have boomed.

And no I aint selling. I don't want to pay tax.

I'll remain Uranium heavy and risk potential losses than sell and accept certain taxes.
 
"Wide diversification is only required when investors do not understand what they are doing."

Warren Buffet
 
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