Back to Basics: Portfolio Sizing and Diversification Strategies

Dave: Welcome, listeners, to The Investing For Beginners Podcast. Today’s discussion, “Back to the Basics” delves into the intricacies of portfolio sizing and diversification.
Andrew: We’ll explore traditional and contemporary thoughts on portfolio structure, the role of diversification, and the influence of market trends on investment choices.
Dave: Plus, insights on position sizing: when to start small, when to increase, and how to manage your investments within your circle of competence.
Andrew: We’ll be sharing our own portfolio experiences, addressing the balance between knowledge and market unpredictability.
Dave: Join us for this and future episodes as we guide you through the investment landscape with a margin of safety as your compass.

00:00 Build diversified portfolio, balance exposure, avoid risk.
04:59 Manageable portfolio size: 15-20 companies, 5% per stock.
08:00 Consider portfolio diversity, own what you understand.
12:10 Portfolio strategy: comfort, familiarity, and company growth.
14:11 Suggest considering concentration versus smaller position sizes.
18:05 Diversified portfolio aiming for around 25 companies.
21:05 Unsure about investing, knowledge may hinder decisions.
24:33 Being aware of market trends is crucial.
26:42 Be aware of IPOs like DoorDash’s.
30:34 Knowledge leads to bigger investment opportunity.
33:00 Have a great week, talk to you!

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You can find the transcript of today’s show below:

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