Number of Companies in an Individual’s Portfolio ?

This is one question that almost all long term investors ask themselves. Most of the well known value investors that we read about in public domain, usually, are concentrated in teens. If that’s the case, then what about diversification? The concept of risk is very subjective because every person will have a different risk profile. These well known value investors have proficiency to balance risk vs. returns. They have resources to be able to manage that risk of concentration. As individual investors, we do not have such resources at our disposal, and hence risk level changes for us. In addition, we cannot generalize that a fixed “number of stocks” provides diversification.


Being a dividend investors, I am looking for companies that have potential to grow their dividends over time. I have observed that companies that grow their dividends, with good quality of earnings, the market value (or share price) also grows. This not only provides dividend cash flow, but also the capital appreciation over time. continue reading rest of the article….

Higher Complexity or Risk Does Not Mean Higher Returns

In my last post, I discussed about how I dealt with my existing position in some of the dividend cutters. I received a question that “can your post be interpreted as a recommendation to buy BAC and WFC because they are cheap”, and “what about GE, doesn’t it have wide moat, you ignored GE and did not mention anything about it”.

To begin with, this blog is not about recommending any stock or advising what do with individual’s investment. I have mentioned this in my disclaimer. This blog is a chronicle of my quest to build an income portfolio. I do not recommended or advise buying any stock on this blog. The premise of the post was how I dealt with the dividend cutters in my portfolio. It was about risk management process for my own dividend growth portfolio. It demonstrates my thought process with reference to my principle of objective based investing approach. I added to my original position based on my personal risk profile. I did not initiate a new position. continue reading rest of the article….

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