The minimum number of slots you should divide your portfolio gets determined by:
In my case, that magic number is 20/2 = 10.
So, I’ve divided my portfolio in 10 slots, equally weighted. Why equally weighted?
I like to always keep a bullet in the chamber. I recommend keeping at least one slot in cash. In my case, I tend to have 2 slots in cash.
Maximum number of slots:
There isn’t any rule for that. But for experience, an individual investor does not have the capacity (in terms of time and money) to invest in more than 15 stocks. I feel that 10-12 it’s a good number for me.
This would be my ideal diversification.
|STANDARD & POORS GLOBAL||SPGI||USD||350||13.89%||-7.5%|
Quality – Momentum stocks not paying dividends usually are growing stocks, assuming most likely a higher volatility than the dividend ones.
Then, I do not to repite industries. In essence, I go for the best stock in the industry and then I forget about that industry while I’m invested.
Regarding the currencies, I’m an european investor and I plan to get my retirement pension in Euros, so I have a strong home bias. Nevertheless, a country/currency diversification in some proportion is desirable.