Here’s our Club Mailbag email [email protected] — so you send your questions directly to Jim Cramer and his team of analysts. We can’t offer personal investing advice. We will only consider more general questions about the investment process or stocks in the portfolio or related industries. This week’s question: What is the full position of the stocks in the portfolio? How do we establish that level for ourselves? — Scott L. Great question. It really depends on the investor. We own 30-plus stocks, so we try not to exceed about 5% to 6% in any one position. This ensures that we remain diversified and that no single stock has too much impact on the portfolio. Currently, only Apple (AAPL) has a weighting above 5% (5.6%). We have had to trim our Apple position in the past when it has grown beyond 6%. We don’t recommend that members own 30 or more stocks. Our rule of thumb: Do one hour of homework a week on each stock to keep on top of things. That time can add up pretty quickly as you add more stocks. In addition to Jim, who seems to not require sleep, we have two analysts and an entire editorial team doing research. This is how we stay current with each of our holdings. For most members, it makes better sense to identify five to ten stocks across various sectors. Those with more time to dedicate to their portfolio can obviously add more. We will always provide our research and trading decisions for every stock in the portfolio and bullpen. Just try to stay diversified, which means not owning the Magnificent Seven — Apple, Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Meta Platforms (META), Alphabet (GOOGL) and Tesla (TSLA). If you own five stocks, a full position could be as much as 20%, depending on the size of your cash position. With ten stocks, the full position could be closer to 10%, assuming an equally weighted portfolio. Of course, even if diversified, those are certainly large positions. Some investors will not be comfortable with so…
Read the full article here
Leave a Reply