You make an interesting point on the portfolio allocation.
Probably the first thing would be to give you context that I’m 29. I’m not anywhere close to being able to rely on investment income to support me and am really more focusing on trying to find long term compounders that I can hold forever (I very rarely actually sell shares other than when I needed to get a deposit together for my first home 5 years ago).
Because I’m not needing to conserve funds for retirement anytime soon I feel comfortable in having a very high allocation towards equities as I should be able to ride out the inevitable bad years for the market.
In terms of how I allocate the portfolio itself I think a little differently about SOL and BKW as they offer exposure to a broad range of non correlated businesses within the one company (for a contrasting example you’ll notice my so far very poor investment in DSK has a much lower overall weighting due to being a micro cap and being solely a retail business so I see that as a bit of risk management).
I also would much rather have a handful of companies that I really believe in and feel I understand well rather than going scatter gun and getting so diversified that I may as well hold an index fund. At any given time I feel I have a decent idea of what the fair value range is for any of the companies in my portfolio whereas that’s not true for the majority of other stocks on the ASX. This set up also offers an opportunity to outperform the market.
I’m not saying this is the correct approach by any means but hopefully it gives you some insight.
SOL Price at posting:
$32.68 Sentiment: Hold Disclosure: Held
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