Marcel (@Kytez) on getquin

10Mon·

Hello,

I have developed a fascination for (strongly) focused portfolios with high-quality shares and am currently giving some thought to how I would implement this.

The attraction is clearly to have a higher chance of outperformance and to be able to follow the selected companies in a more concentrated way. For me, this would also be a more relaxed B&H&C, as there are fewer stocks and only high quality, where price losses are more likely to invite additional purchases.

The higher volatility is not a problem for me, as I can cope with it psychologically and have an investment horizon until at least 2040.

I would still be overweight in tech. The sector allocation would remain very similar to my current portfolio of 16-20 stocks. Tech, pharma/biotech and luxury are my favorite sectors with which I feel sufficiently diversified.

I would also make sure that the companies themselves are somewhat more broadly positioned or, if "one trick pony", then with a strong moat (e.g. $ASML (-1.59%) ).

Option 1 is the following (extremely focused!):

20% $MSFT (-1.05%)

20% $ASML (-1.59%)

20% $MC (-0.25%)

20% $DHR (+0.77%)

20% $BTC (-2.31%)

Variant 2 is similar, only with 2 companies per division:

10% $MSFT (-1.05%)

10% $GOOGL (+0.94%)

10% $ASML (-1.59%)

10% $AVGO (+0.31%)

10% $MC (-0.25%)

10% $RMS (+0.75%) or $RACE (-0.23%)

10% $DHR (+0.77%)

10% $VRTX (-0.44%) or $MEDP (+0.02%)

20% $BTC (-2.31%)

What are your thoughts on this? People who also have a focused strategy are also welcome. 👍🏼

Best regards

8 Comments

PowerWordChill@PowerWordChill

10Mon

very good you have discovered the quality factor, if you had done it before 1992 you would now have a Nobel Prize title and not E. F. Fama, K. R. French...
But I also have good news for you, there are ETFs for this:
$XDEQ / $IS3Q

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Felix@Investor_in_Jogginghose

10Mon

Say hello!

I've been investing for 10 years now and with a similar approach for about 7 years. The first 3 years I still had etfs until I dared to do more.

I personally find 5 positions too risky. If you focus on just a few stocks, you might miss out on unique opportunities that arise due to scandals or similar.

For me personally, it has proven to be a good idea to look at a large number of shares and to observe a universe of good companies and invest when opportunities arise.

The timing of a purchase is also crucial for outperformance. There are often only short periods in which a share is undervalued.

I think it is very difficult to determine the best 5 performers over the next 10 years at this point in time. The future is often characterized by black swans. (Nvidia AI, Novo weight loss top). Nevertheless, I have/had both stocks, through precise daily screening (Novo unfortunately sold due to real estate purchase would have been 600% more RIP).

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Gerit@Gerit

10Mon

Best first-hand tip: don't try to outperform, but try to achieve a "safe" return of ~9-10%.

Could save you years.

Good luck & success! 🥂

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Gerit@Gerit

10Mon

By the way, the right price will count in the end, you need a lot of patience for that, it could be that you wait years for a company and can only collect a few dividends on the side... a high cash ratio doesn't make sense either.

So, for example, okay, ASML, great, I'd love it, but now?

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DerDanner@Therapeut

8Mon

Have the same investment approach as you📈🫡 focused on quality companies I try to cover different sectors, currently 6 stocks 2 cryptocurrencies

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Krush82@Krush82

10Mon

I am also a friend of focused portfolios. Variant 1, regardless of which stocks are in there now, would be too risky for me. I could probably live with a 10-15% weighting/position.

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