Target Weight for WELL

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hello hello…thanks for the Nov 15th Report on WELL. my target position weight for WELL is2.5%. In a full growth only portfolio, what target weighting would you suggest?…..thanks….Tom

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Asked on November 15, 2020 5:05 pm
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thanks, Mat

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Posted by Tom Millar
Answered on November 16, 2020 10:05 am
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Hi Tom,

That is really up to each individual and dependent on their investment goal. For myself, I try and keep single positions to 5% or less of my portfolio. In some cases, I will let winners run up to about 10% before I'll consider trimming. Assuming all your positions are at 5%, your portfolio would be about 20 stocks. Given that research has shown the benefits of diversification top out around 25 stocks, it aligns with the concepts of diversification to reduce unsystematic risk.

One of the dangers of a growth portfolio is the risk of having too many stocks, and not being able to stay on top of each of them. So whatever you decide, it is important to ensure you can keep tabs of your positions - especially in a full growth portfolio.

Regards,

Mat

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Posted by Mathieu Litalien
Answered on November 16, 2020 4:17 am
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