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How many shares should a portfolio contain?
#1
Been a bit quite  - so thought we could do with a bit of a conversation starter...

For me, I have split my portfolio into two - and treat them separately. I have an income generating portfolio - roughly half SA Reits/ Half oversea REITS.  Contains 24 companies.

Then I have what i call a CGT portfolio which is about 1/4 of the size and contains companies that i hope will grow with/without taking in consideration dividends - contains 30 shares.

Only etfs I have are in my TFSA

Biggest holding would be 8.7%(capitec)  and smallest 0.14%(steffanuti and PBT). Many would say - why bother having such a tiny holding? Well, when newcomer capitec launched, what percentage would a savvy invested have had invested? 1 -2 % max would be my guess. 

I like the fact the most of my counters could fall 20 - 30% - and although I would not be a happy camper - certainly would not harm me too much.

On the down side - maybe  it is a bit of a shotgun approach to building a portfolio - maybe by limiting yourself to 5 - 6 counters you would be more invested in them. Of course, that could bring in a few problems. 

One idea I quite like is 70 - 80% etfs, then a few selected companies at 4-5% each.

The problem is, I really enjoy reading SENS from companies I have an interest in.

Anyway, what's your feelings on the matter?

#2
I went with 2 ETFs (50% of my holdings)
Sygnia's MCSI World and Absa's NFEMOM

And then I have 4 - 6 Shares - I am buying and selling - do not have a stable group yet other than KAP and Naspers which I have kept since the beginning.

#3
ETFs and Unit Trusts over here. No "single shares"...had them, not too keen to get back in again.
IQ Test

#4
I have 2 ETFs, treating me very well, satrix indi, coreshares S&P 500 and one unit trust through coronation.

Over and above that keep about 10% of the total in shares, about 10 companies.

#5
I personally strongly believe in ETFs, especially for LT investment.

#6
I have 16 shares in my portfolio no ETFs. I am trying to see if the market can be beat by focusing on the FINDI 30 shares minus the dogs in there. Lets see if that works. It will take a while.

#7
Interesting test, keep us updated.

#8
So as far as my portfolios go (cash, RA and pension aside):

Portfolio 1:
My very portfolio evolved into this but I do not contribute to it anymore.

SYGWD, NFEMOM, PTXTEN (40/35/25 split)

Portfolio 2 (TFSA):
CTOP50
PTXTEN
GLPROP
STXEMG
SYGWD

Except for cash and bonds I don't think an ETF Portfolio can be diversified any better and it's doing very well atm.

Portfolio 3 (Stanlib unit trusts):
Diversified Equity Fund of Funds
Global Balanced Feeder Fund

...and I know certain bloggers are going to turn in their graves, but I do like those unit trusts and will probably move all of Portfolio 1 to it. They give exceptional diversification in my opinion and I'll probably convert that feeder fund into the true offshore counterpart next year some time.
IQ Test

#9
The difference between ETFs and stocks is volatility. ETFs will roughly follow (or slightly outperform perhaps) the market/sector average, but stocks have more volatility, so there is potential for good growth if one stock jumps.

However, the more your stocks are diversified, the less effect a good stock will have on your bottom line and the closer you will be to the market average. (Obviously you also want to have enough to minimize risk).

For example, you have R50,000 to spend and you buy 5 stocks at R10,000 each. Four mimic the market and return 20% in the first year and one has a freak 100% return. You have made R18,000 profit. But if you had used your R50,000 to buy 20 stocks of R2,500 each, and 19 mimic the market (20%) and there's the one freak 100% return. You only make R14,750 profit. Thus, the more diversified, the less effect a good stock has on your profit.

There is an exponential decrease in risk as the number of stocks increase. Past a certain point (20 shares), even doubling your number of stocks to 40 only decreases risk by than less than 1%, but you have lost your overall volatility.

Above 20 stocks and you're better off doing only ETFs, since statistically, your portfolio will exactly mimic the market, and ETFs slightly outperform the market average.

Therefore, roughly 10 - 15 stocks is the perfect mix between risk and volatility for buy & hold investing, or even less (maybe 10 stocks) if you have a couple of ETFs as well to balance out the risk.

I'm slightly older and closer to retirement than many investors on this forum, so I prefer less risk (and less volatility), and thus have more stocks in my portfolio. Thus, I have 40% of my total portfolio in 10 ETFs and 60% of my portfolio in 15 stocks.

#10
So I am still relatively new to this. At the moment my main focus is on my TFSA but I am looking at adding one share a year, possibly two if I have the extra finances through the year with the current aim at 10 stocks.

My TFSA is made up of three ETFs, soon to be four:
CoreShares S&P 500
Satrix 40
Satrix Indi 25
Soon adding SYGNIA Itrix

At the moment the split is 30/40/30 but this will change when I get the SYGNIA ETF.

Equity wise I currently own:
Dis-Chem > 85%
Purple Group > 15%

I will be adding Stadio shortly.

I am looking more into small to mid cap as my TFSA currently has a lot of exposure to big stocks. My next two stocks after Stadio will most likely be big stocks though.

At the moment I am entirely planted in a buy-and-hold longterm strategy.

#11
(11-28-2017, 01:35 PM)The Local Tourist Wrote: CoreShares S&P 500
Satrix 40
Satrix Indi 25
Soon adding SYGNIA Itrix

Beware of duplication. Personally I don't see the point of owning both STX40 and STXIND. The bigger shares (most of the ETFs) are the same.

Instead of any of those two I'd rather get CTOP50 or MAPPSG, although I'm guessing that INDI is on quite a run atm with Naspers so probably worth keeping :p

What you are missing in your TFSA is property. PTXTEN and GLPROP will sort that out if you wanted to add them.

S&P500 is all USA though so you are missing out on Europe and the rest of the world. If you were to get ASHGEQ instead it would cover almost the whole world including emerging markets albeit leaning heavily towards the US.
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#12
@The Local Tourist:

I agree with Bandit about duplication, especially with adding a Sygnia ITRIX. If I were to add one or two more ETFs to your portfolio, I'd go with Satrix Emerging Markets (STXEMG) for a broader global cover because you're already US top-heavy and Sygnia ITRIX World won't change that. Also. maybe Coreshares Global Property (GLPROP) to have some property too.

But if you don't want too many and don't want to add an extra Emerging Markets ETF, I agree that ASHGEQ or Sygnia world (SYGWD) alone would be better than SP500.

ie. Have either (Option 1: ) S&P500 AND Emerging Markets (STXEMG) or have (Option 2: ) only ASHGEQ or SYGWD. Otherwise you're just duplicating US stocks and becoming too heavy there.

#13
(11-28-2017, 04:48 PM)SaurusDNA Wrote: @The Local Tourist:

I agree with Bandit about duplication, especially with adding a Sygnia ITRIX. If I were to add one or two more ETFs to your portfolio, I'd go with Satrix Emerging Markets (STXEMG) for a broader global cover because you're already US top-heavy and Sygnia ITRIX World won't change that. Also. maybe Coreshares Global Property (GLPROP) to have some property too.

I think he is referring to the new ITRIX ETF coming the 6th of December which is the 4th Industrial Revolution one. If not, then yeah, wouldn't add the SYGWD one.

STXEMG is doing very well for me, up 15% so far Smile
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#14
(11-28-2017, 04:52 PM)Bandit Wrote: STXEMG is doing very well for me, up 15% so far Smile

It's also done extremely well for me. It's my second favourite ETF after INDI.   Smile

#15
Yup I too am thinking of adding SATEMG to my portfolio soon, gives great exposure to the eastern world.






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