Investment policy

[Barend1206]

Not sure if this is the right forum as it seems most discussions are short term trade related but maybe there are some opinions out there regarding my investment policy. I have a long term investment portfolio consisting of 20 shares covering a spread of sectors. Each share represents approximately 5% of the invested value of the portfolio (not the market value). Each month I buy the shares that are less than 5% of the invested value of the portfolio. In doing so, I ignore the price of the share. I basically aim to keep my invested value per share balanced at 5%. I am comfortable with my returns ie divvies that I re-invest and my cost of trades are also fairly low due to size of amounts invested monthly. Any comments or suggestions?

[Werner_1]

There are some long term, value investors here... I am one of them... would be great to chat about strategies etc... Keeping the balance is great, but would you buy the share that's always the smallest constituent of the portfolio? What if 3 of the 20 shares are below 5% how do you determine which to buy then? you should email me and I would be happy to chat about long term strategy... [email protected]

[geordie1]

I am a long term investor.being doing it for a few decades now-its my only form of income.so glad i do not work for someone.i like your thinking but it seems a bit mechanical-following a strategy without applying any research-not sure I buy into that.sometimes if u lose confidence in a share it should be dropped and new shares should be added-keeping the percentage in strict percentage seems a bit restrictive but hey if it works for u then keep going.the market is quite high now and i am currently building up my cash component so if a correction comes along i will be ready to buy.the main thing is you are in the market-so carry on enjoy the ride and become financially free.

[Werner_1]

I am also working on building the cash right now for allocating to companies that fall in value and offer great futures... What do you think of Naspers btw? with the recent drop and the future prospects?

[geordie1]

naspers is on my radar but has to drop big time to get my attention-i like to seek out a good share at a great price after the market turns its back on it0its a patience game and they do not come along every day

[Werner_1]

I have a similar logic to you!

[Blik]

Werner how do you balance your existing portfolio with buying additional shares. Your portfolio surely must grow to a point where it is difficult to manage or keep track of all the companies? Or do you follow a "Lynchian" strategy of owning hundreds based on value alone? Or do you sell holdings that are not doing as well as you would like?

I have built my portfolio up over the past 12 years to about 23 shares. One or two I will get rid of, but for the most part I am happy with the shares I have and the return I get. But I dont want to diversity my portfolio to the extent that I cannot keep at least some track of what the company is doing - bear in mind my paid job takes up a full day.

Curious really.

[Werner_1]

My portfolio only has a few shares. currently 6 and maybe another will be added soon. About the balancing of the portfolio, i am not that bothered with the exact weighting but rather make sure the new capital is invested at attractive prices to positions that have a high chance of growing, so for example, if WHL fell 20% and looks like it will gain that and grow stronger, I would acquire more shares in this position. if i find another company that i dont currently own that looks great, a new position will be started, but i try not to over-diversify because i like to know what happens in the companies i am involved in... well, i try to know as much as possible.

[Blik]

Makes sense

[DST]

Saxon, Blik - 20 is a long list to track.

Look at the drivers of revenue, of cost, and of risk for each (a simple table with share in left column and then three columns for the drivers.

I expect you will be duplicating quite a bit. So unless you are smoothing out dividend flows or something, I would consider trimming back to 12 shares.

But good luck - I admire your solid approach!