Portfolio Position Size -
For me, I generally start a new position at no more that 2% and more often .5%-1% portfolio positions. Some of my positions, all the dividends are reinvested (there are even other that provide me a 10% reinvestment discount program like IRET). My positions that have dividend reinvestment have grown in size faster than those where I received the dividends in cash.
My largest positions are those that I bought years ago and provided a good growth kicker. Some examples include: CVX, COP, MRK, PFE, BMY & AMNF. These stocks have more than doubled in value and have grown from a less than 1% portfolio position to over 4% portfolio positions. COP also spun off PSX and CVX has had several splits.
This is the same case in the taxable portfolio too. The biggest gains and largest positions are those that I have bought in the late 80's and continue to hold today. The growth comes from stock splits and spin offs.
My advise is to not trade your account but let it grow like a good garden. In fact, in my taxable account, my CVX and COP have exceeded my 7% max portfolio position size and I have had to peel off shares to keep those position from getting too large. The COP spin off PSX is also hitting my max 7% size.
My main IRA account has 40 positions. The top 7 positions account for 41% of the portfolio size.
CVX is my largest at 13.38% (time to peel off some shares), PFE 5.4%, KMI 5%, EEQ 4.7% (div are automatically reinvested), BMY 4.4% & MRK 4.1%.
My CVX was acquired in 2000 and several of the drug stocks were bought in 2005. The key to the portfolio position size is time held.
The other thing is to avoid are landmines and/or stocks that go BK. Washington Mutual is one and GMXRpD is another. Both have values less than $1.00 now but since they started out at no more than 1% portfolio holdings the BK was not as painful. You are bound to have looser, so you sell those and try again by either adding to your good performers are starting another 1% portfolio position and let it grow.
EKS |
