Divvying up capital - Stocktrades Canada

Hi Dan and Mat, I hope you had a nice Thanksgiving. I know the general consensus on keeping trading fees to around 1% for each purchase – so $5 for $500 down with Questrade for example. Would you guys take $1500 and split it between 3 stocks or throw it all on 1? Of course this depends on the stock, because $1500 wouldn’t even buy 1 share of CSU, but just wanted your general thoughts on divvying up available capital. Do you buy a certain amount to maintain a relatively balanced portfolio? Or buy more to take advantage of a good deal?…Thanks so much!

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Asked on October 13, 2020 7:58 pm

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▲ 0 ▼ ✔	Private answer Should mention as the stock is more speculative divide into small portions as percentage of portfolio. Marked as spam Posted by Dan Kent Answered on October 18, 2020 7:41 pm
▲ 0 ▼ ✔	Private answer Thanks so much Mat! Marked as spam Posted by Vanessa Grass Answered on October 17, 2020 8:23 am
▲ 0 ▼ ✔	Private answer Hi Vanessa, Once again, this is really dependent on portfolio strategy and will be different depending on the investor. In terms of maintaining a balanced portfolio (and this is my opinion only), it is less important to have a balanced portfolio when investors are young and have longer time frame to retirement. Why? They have a longer period in which to recoup from volatility. Most investors will see at least a few crashes in their lifetime (I have experienced 3!). The closer you get to retirement, the more diversified investors will want to be as they will want to limit volatility and protect gains. That being said, there are multiple scenarios at play here. If all three provide excellent value, have similar growth prospects and each fit within the context of the portfolio - then absolutely, no harm in divvying that up among three stocks. If 1 or 2 look more attractive than the other (s), then once again - no harm in dumping the entire lot into the 1 or 2 stocks that look more attractive. You can then add the 3rd once you have additional cash, or it is more attractively price. Bottom line, there is no wrong answer here so long as the decision to support the long-term goal's of the portfolio. Make sense? Mat Marked as spam Posted by Mathieu Litalien Answered on October 14, 2020 4:25 am

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