Investor watch lists and toe holds
White Top View series, Portfolio Management – Counts and Sizes, Part 6 of 6
Investor watch lists and toe holds can do much, Perhaps setting up watch lists or model portfolios could enable risk free monitoring. Building and checking out a new list can be interesting and informative. But there is always one more idea to test or check out.
In my experience, soon a few ideas or watch lists can grow to dozens. Or in my case as someone passionate about markets I have hundreds of studies and watch lists. Besides being completely unmanageable, close monitoring is not possible. As a result they don’t get particularly closely watched. Especially once another list or something else catches my attention!
Hmm perhaps counselling would have an answer! Still, my solution works. I take a toe hold or buy a small position in the company. With money on the line, that keeps my attention and focus. Some skin in the game does the trick.
The earlier parts of the White Top View series, Portfolio Management – Counts and Sizes can be found by clicking on the following links:
The type of portfolio, growth stocks or an income focus based on dividend producers strongly influences how I manage any watch lists or toe holds.
- For growth portfolios I like to stay with about 10 positions. To begin I put 10% in each and watch the progress. Growers must grow. Any laggards get weeded out and new positions in better performers get taken.
My growth portfolios are actively managed. I will sell losers and buy more of a winning position or shares in a new position that I have researched.
Dividend portfolios provide income as the first consideration. Positions in large established dividend paying companies often move sideways or within a price channel. A price channel means the stock price tends to rise to a given price level and then fall back to a lower level. The pattern of rising and falling often repeats time and again.
Utilities and other companies in well established, large, secure businesses show that sort of stock price behavior. Investors in such companies accept the regular and secure dividends as their return. The stock price usually remains channel bound with limited significant moves.
Dividend portfolios are generally stable but still need monitoring. The stability is a strength but offers little or no growth. I resist changing these holdings until convinced there is a weak or under performer. They get sold.
At times economic events or developments change the outlook and may need adjustments to positions and sizes. These accounts undergo fewer changes than the growth portfolios that I manage.
As prices move, values and portions shift. That may need making some portfolio adjustments. For now, note that be aware that market moves impact your portfolio and each stock that you hold. Another day we explore that big topic.
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Links to all parts of the White Top View series, Portfolio Counts and Sizes: