(0:45) - Building A Strong Stock Market Portfolio (5:00) - Best Idea Stocks: Knowing When To Add To A Position (12:50) - Finding The Right Stocks For Your Portfolio (22:10) - Episode Roundup: FB, SONY, AAPL, GOOS, CMG, SQ, ABT, LLY Podcast@Zacks.com
Welcome to Episode #266 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey has gone solo to talk about how many stocks should be in your portfolio.
Can You Have Too Many Stocks in Your Portfolio, or Too Little?
Some people have dozens of stocks in their portfolios. Tracey has 23 in her Value Investor portfolio at Zacks.
Warren Buffett, in a 1998 speech, said that an investor who has done their due diligence and research could be invested in as few as 6 companies.
What do the experts say is the optimum number, which still gives you diversity?
How to Find the “Best Idea” Stocks
If you’re going to invest in individual stocks, why not invest in only your very “best ideas”?
But where do you find those?
There is no “best idea stock” screen out there.
Many investors can find “best idea” stocks by looking at companies and products that they know and use.
You don’t have to get fancy in creating a solid long-term portfolio with great companies.
Believe it or not, you don’t even have to buy IPOs or speculative biotechs.
5 Best Idea Stocks
Facebook ( FB Quick Quote FB - Free Report) went IPO in 2012. At the time many investors said they were buying shares to “fund their kids college education.” Since the IPO, shares are up 708%. Was Facebook a “best idea” stock? Is it still one 9 years later?
Sony Group ( SONY Quick Quote SONY - Free Report) is one of the leaders in gaming worldwide. It also is one of the largest music publishers and is a big player in movies and television entertainment. It’s trading with a forward P/E of just 18.
Apple Inc. ( AAPL Quick Quote AAPL - Free Report) has pulled back off its all-time highs in 2021, pushing its forward P/E down to 27 from 31. It has gotten cheaper on a P/E basis. Is it time to get in?
Canada Goose ( GOOS Quick Quote GOOS - Free Report) has seen earnings and revenue take a hit during the global pandemic but that is expected to turn around by fiscal 2022. Revenue is expected to jump 40% next year.
Abbott Laboratories ( ABT Quick Quote ABT - Free Report) has jumped 52% over the last 2 years, beating the performance of the S&P 500 which is up 41%. Abbott has a forward P/E of 23 and pays a dividend yield of 1.5%.
What else should you know about how many stocks you should own in your portfolio?
Find out on this week’s podcast.
[In full disclosure, Tracey owns shares of FB in her personal portfolio.]
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