How To Build A Stock Portfolio For Beginners | Position Sizing, When To Add, When To Sell
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- Опубликовано: 5 авг 2024
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Brian Feroldi's mission is "to spread financial wellness." This channel teaches viewers how to master their personal finances and invest better. New videos are posted every week!
One of the most common questions that we get asked is how to build a portfolio. Building a stock portfolio seems complex, but once you setup a few rules for yourself, it's not as complex as you think.
Brian Feroldi and Brian Stoffel explain the rules that they use for themselves to build an investment portfolio. This stock market for beginners episode shows they details of how to build a stock portfolio.
0:00 Intro
0:21 First Step & Time Horizon
1:41 Our "Rules" & Position Sizing
3:00 Adding To Our Position
4:19 Buying At Better Value Point
6:06 Oversized Position
7:43 When To Sell
9:31 The Important Of Journaling
#portfolio #investing
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DISCLAIMER:
All content on this channel is for discussion, education, entertainment, and illustrative purposes only and should not be construed as professional financial advice, solicitation, or recommendation to buy or sell any securities, notwithstanding anything stated on this channel. There are risks associated with investing in securities. Loss of principal is possible. Past performance is not a predictor of future investment performance. Brian Feroldi and the guests on this channel are not responsible for investment actions taken by viewers. Should you need such advice, consult a licensed financial advisor, legal advisor, or tax advisor. You agree to verify all information yourself before investing. Any past performance discussed during this program is no guarantee of future results. Investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.
All views expressed are personal opinions as of the date of recording and are subject to change without the responsibility to update views. No guarantee is given regarding the accuracy of the information on this channel. Releasees undertake no obligation to provide accurate or sound investment statements. You waive any and all duties that may exist flowing from you to any Releasee. You agree not to hold any Releasee liable for any possible claim for damages arising from any decision you make based on information or other content on the Channel.
*Some of the links and other products that appear on this video are from companies for which Brian Feroldi will earn an affiliate commission or referral bonus. Brian Feroldi is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date.
SUCCESS IS NOT FINAL;FAILURE IS NOT FATAL :IT IS THE COURAGE TO CONTINUE THAT COUNTS. BUSINESS OPPORTUNITIES ARE LIKE BUSES, THERE’S ALWAYS ANOTHER ONE COMING.
To manage investment risk, consider maintaining a broad diversification of your investments that reflects your personal risk tolerance, time horizon, and the nature of your financial goal.
Remember, diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline. Because investing can be complicated, consider working with a financial professional to help guide you on your wealth-building journey.
Who would you endorse ?.
@@stellamoore720 'BRIDGET MARY TUROW"
@@raymondbarnes5264please how can i reach her ?.
Some great wisdom in this video! Picking great businesses is, of course, Job #1, but arranging these businesses into a strong, diversified portfolio can make the difference between fragile and anti-fragile.
I loved Feroldi's comment about his ultra-conservative personal finances. I have the same philosophy. A benefit of being debt-free is my family can live comfortably without having to rely on a huge taxable income to make all those monthly payments.
I keep about 50% of my portfolio in various index funds. This provides insurance in case I'm not as good of a stock-picker as I think I am 😉 Index fund ETFs are very tax-efficient for non-retirement accounts and have low expense ratios. I don't move these much at all. They just sit there and compound.
My active portfolio I mostly invest in companies that are growing revenue per share, generate free cash flow and have little debt. It's hard to get in trouble if your businesses throw off cash instead of burn it and are not over-leveraged. When I find good ones, I rarely sell.
No surprise to see that Dave and I operate in much the same way. Thanks as always for a great comment Dave!
Truly quality content. Thank you guys! Could you possibly make a video of a template on your investment journals?
Great idea LZ! We'll add that to the video idea list!
Once again , amazingly compressed and helpful information ! Thanks Bryans
Glad it was helpful Tom!
Some really solid advice, thanks for sharing. For me, useful was hearing how you build a position, something I think I could get better at. I am typically good at identifying opportunities, but build positions too quickly and then when it does turn green, it feels less profitable than it could have been. I will work on having some similar restraint and approaches!
Glad it was helpful The Boss!
amazing video! it made me feel more comfortable with my investing journey :)
cheers from brazil! 🇧🇷
Glad it helped Lorena!
Terrific overview on how to build a portfolio. Based on the percentages, can I assume that you hold around 20 stocks? I constantly get different views on how many stocks to hold and would like to hear your ideas on this. Thanks again for your time and wisdom.
There's no right or wrong answer to "how many". You can outperform with a concentrated portfolio and you can outperform with diversified portfolio. It totally depends!
Great video! Would love you to review TTCF!
On our list
Hi Brian, just when making the initial purchase and when adding to positions, do you DCA during these periods?
For example for initial purchase positions that is 0.5%-1.0% of your portfolio, do you DCA over the time before you decide to add to the position (ie the 2-3 earnings reports) to bring it to the 0.5%-1.0% of your portfolio?
And when adding to initial positions, do you DCA for 12 months when you decide to increase your overall percentage of your portfolio to that business
Great video. Although I am in the stock market since years and have a clear strategy, you guys are always inspiring and provide great insights!
Thanks for watching AC!
A hugely value set of guidelines here. I will be adding Brian F's P/S criteria for watching a stock I want to add to. I typically buy a stock 3 times to get to the 3% level. Plus I'll buy a little eg $100 of a lower conviction stock that I'm interested to follow (if it's goes up, I get a little bonus. If it goes down it's not a big loss).
It's amazing how just a small stake can make you pay way more attention to a company.
Skin in the game :)
P/S, P/E, F P/E, P/FCF are all worth tracking!
Amazing video! I was suprised that neither of you have bigger relative positions in your stock portfolio. :)
We DO -- just made a video on this to explain!
@@BrianFeroldiYT alright, I must have missed it. Have to take a look :)
The 2 weeks rule is excellent!
It's a good rule for purchases in general!
Can u please make a video on long term stock as US market have corrected a lot. I am new in US market . for long term
Do you mean on the long term performance of the stock market?
Great Video Brians! I am from India and i do invest in high growth companies listed on the NASDAQ. Your videos and your twitter feed are a real source of inspiration and knowledge.
One Question, Is the % of Portfolio mentioned part of the Equity Portfolio alone or Overall with any Debt, 401Ks, crypto or other Asset classes, i.e. the total net-worth?
Great question Nishant! I like to think of my stock investing portfolio when making decisions, but that's where most of my net worth is. It's a smart idea to zoom out and consider your whole net worth too though
Can you review CELH?
On our list!
Brian Feroldi is there anywhere we can see your full portfolio? I know Brian Stoffel posts his monthly on Twitter. Thank you!
We have a video coming out about this Tim!
Given you have a process that's relatively time consuming, curious how you think about the total number of businesses you own in the portfolio? Especially considering persona of folks who spend maybe ~1-2 hours on their portfolio per month.
That's a great question, Anuj! IMO, you're probably adequately diversified if you own a minimum of 15-20 businesses in diverse industries. However, as you point out, investing in individual companies, to do it right, is time consuming. When I was working full-time I had close to 100% of my assets in index funds. Average returns, yes, but what I got back in TIME was priceless. Even today, as a full-time investor, I have over 50% of my portfolio in various index ETFs. If you want to get more of your life back, you could invest mostly in index ETFs to provide diversity and decent returns while keeping just a handful of individual companies that you monitor closely. Anyway, just my 2 cents. Cheers!
👍🏻
Hi Anuj -- we can make a video about this. Thanks for the idea. Dave's advice below is great too (as usual!)
Why would you cap your size to only 3-5%? If your best 3 ideas are considerably better than your bottom 20 why bother on your 20th best idea? Eventually you will also need to sell some of your best ideas to make room for new ones because most people can’t manage a massive number of stocks successfully on their own anyways. As a wiseman once said “diversification is for those who don’t know what they are doing” I’d love to hear your thoughts on these potential pitfalls. Thanks!
This video must be pre-bomb cyclone. There are green leaves outside Feroldi's window. In all seriousness, hope you are well Brian. Stay warm!
:) We typically record these a week ahead of time. That gives us time to edit & such.
How many stocks should be in your portfolio?
There's no right or wrong answer -- we have a video on this in the works
These are all good points but, I don't understand the point of capping the weight of each company in your portfolio. I think that is negative
There's not right or wrong way to do it! These are just some of our principles
How prudent is it to keep trimming your best performing position just because it reaches a percentage? If you were relatively early in Amazon, Apple, Netflix, Salesforce, Disney etc and kept trimming them because it hit a percentage number (and not look at the business) would you not be punishing yourself by taking good money and putting it in a relatively poorer performance stock? I understand if you sold to generate cash or expenses. Generational companies do not come up all the time. The odds that you took money off one of these companies and stick it into another generational company is quite rare may be if you are super lucky. At the end of the day all investment is a calculated gamble. No one can predict the future. Amazon, Netflix and Tesla could all have disappeared in a parallel universe. And if we ended up being invested in what turned out to be generational company, we are super lucky in the first place. It it ain’t broken why fix it? I understand the whole ‘sleep number’ concept though by DG. Aren’t winners supposed to keep winning?
Hi VR -- that's a fair question. As we said in the video, there's no right or wrong answer. There's only what works for you. Letting your winners run is a great idea if you are comfortable with the concentration risk
I appreciate your comments but I think your techniques are overly simplistic and algorithmic. When to trim position and position sizing to be a function of the current value of that stock.
Not our area of expertise, but we have a video planned where we talk about crypto