Enough already. It is a common question. How many stocks is enough? That question was asked and answered this week. There are studies that show that most of your diversification needs can be reached with 12 stocks. And that goes for diversification among one stock market or region. And certainly we’d have to pay attention to the sectors for proper ‘diversification’. Personally I think 15-18 stocks would get you in the appropriate range. And thanks to ETFs, if you don’t like watching stocks, you can buy a whole bunch of ’em by pressing one button. Heck, you can get a well-diversified global portfolio with one click. How many stocks is enough? Read on.
Related post: the ultimate asset allocation ETF page.
On My Own Advisor, Mark asked a question that also generated a robust reaction on Twitter – how many stocks is enough? That post is Mark’s Weekend Reads.
And here’s the Tweet if you want to chime (er Tweet) in …
Personally, I/we have 20 U.S. stocks and 7 Canadian stocks. I admit that I would have better total returns if I had included the grocers and railway stocks in the wide moat portfolio. And the two picks I had suggested have just killed it.
More Sunday Reads
On Tawcan, Bob has reviewed every stock buy and sell since 2020. That’s a lot of activity, and it appears that Bob seeks a simpler approach with fewer stocks.
Since embracing our current portfolio mix in 2014-2015, I have not sold out of any stock position. I have stuck with them all. I have benefited from that buy and hold and add strategy. When you start with quality, you do not have to evaluate IMHO. To sell out is to suggest that you know the future. The winners will win the day.
It’s earnings season, so there’s no better time to check in with the Hawk – Dividend Hawk. In that post you’ll find the summary of earnings, plus some great reads from the week. It was the busiest week for earnings with the giants reporting in the U.S.
On MoneySense, Kyle Prevost is making sense of the markets with a look at earnings reports.
The 60/40 – not dead yet
And from Jon on the site, recently retired while COVID lingers.
On the retirement front, I recently posted the stock portfolio for retirees. That uses an all-weather (ready for anything) approach, but only puts stocks to work. Here’s the original post on Seeking Alpha.
Dividend Stockpile offers a nice wrap for the week with sector performance plus some ideas on finding value in dividend growth stocks. Energy led the way for the week in the U.S., followed by utilities and technology stocks. You’ll also find a heat map for stocks, for the week – cool. 🙂
Here is an update on Henry Mah’s Wealthsimple Trade dividend portfolio that he started one year ago. He uses Vanguard’s VDY as a benchmark, but evaluates the income stream, not total returns.
Canada’s economy is still growing
This is by way of the Globe & Mail. For readability I will not put the quotation marks to use. I have also added some commentary.
Real gross domestic product stalled in May, which was better than the initial estimate of a 0.2-per-cent drop, Statistics Canada said in a report on Friday. The economy eked out growth of 0.1 per cent in June, according to a preliminary estimate. Thanks to stronger growth in April, Canada’s economy is on track to expand by 1.1 per cent in the second quarter, or an annualized rate of 4.6 per cent.
For financial analysts on Bay Street, the report was a mixed bag. Economic growth in the April-to-June period was stronger than the Bank of Canada’s forecast of 4 per cent. It was also markedly better than in the United States, which has posted two consecutive quarters of declining GDP, sparking a hearty debate over whether the country is mired in a recession.
On the other hand, recent months have seen sluggish growth in Canada. Consumer and business confidence is tumbling. The real estate industry has turned cold. And some high-profile companies in the tech sector – such as Shopify Inc. – are announcing layoffs.
The outlook for Canada’s economy is murky. Recession fears are rising, although very few economists are projecting a sustained downturn. The Bank of Canada forecasts growth will slow to an annualized rate of 2 per cent in the third quarter. It also expects the economy to grow 1.8 per cent in 2023 – a hefty downgrade from 3.2 per cent in a previous forecast.
Of course, the U.S. has entered a techncial recession. My understanding is that Canada has always followed the U.S. into recession. As they say, when the U.S. sneezes, Canada catches a cold. Achoo?
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