Starting 100% Equity Portfolio Advice?

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Rufenian

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Direct equity shares on paper offer the best returns. But seem a lot riskier than simply buying an ETF/Trust. Whereas an Index like SP500 will eventually recover will your 10-20 blue chips picks (Enron, Nokia etc)?

My question is to anyone that's experienced in self managing their own equity portfolio that's mirrored maybe an Index;

How do you pick your 10-20 blue chips? Just copy an existing ETF or simply buy the top 20 of an index you're tracking?

Is there an easy tool that can help you create a diverse portfolio for your age group or just buy the pie of VWCE on a brokerage like IBKR?

How do you manage your portfolio, how often do you rebalance, when it drops out of the top 20?

When do you sell, when it drops 30% or hope for an recovery; Nike, Intel etc?

Overall I'm looking for some insight from any experienced practitioners of an over 80% self directed equity portfolio - what are the tools, pitfalls, wins, best advice you would have for anyone looking to make a portfolio vs going the easier ETF/Trust route or maybe you'd totally advise against it!

Thank you for any responses.
 
You should probably read this key post:

Key Post - How to invest directly in shares

Before you invest in shares Buying your own home is your investment priority If you don't own your own home, then buying a home is your priority. There are great tax advantages and there are other non-financial advantages as well. If you are a few years away from having a deposit or if you...
www.askaboutmoney.com
 
Warren is 94 now. With respect, and without trying to sound crass, you could wait for his inevitable departure, and then buy.
 
ClubMan said:
Timing the market is a mug's game.
You don't think that WB's age and mortality is already priced into the market?
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Yes, but there'll still be some form of panic dip. There seems to be a lot of American 'dumb' money in play these days
 
Fortune said:
Yes, but there'll still be some form of panic dip. There seems to be a lot of American 'dumb' money in play these days
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And how does one know when the dip has reached its nadir so one doesn't end up being just another dummy?
 
AJAM said:
Warren is 94 now. With respect, and without trying to sound crass, you could wait for his inevitable departure, and then buy.
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I was waiting but without Buffet and Munger I think a lot of people will exit and no telling how the replacements will fare also as Berkshire keeps getting bigger it keeps getting harder to outperform Indexes.
 
DIY investing should be for those who know what they are doing. If you don't know, you are heading for a disaster. Investing is individual shares is also as much about human behaviour than anything else. What if I'd bought earlier, sold later, sold earlier, bought more. And given the amount of money you are talking about, you are either better off investing in an index and forgetting about it or using a professional to manage your portfolio. Both options allows you to get on with your life without having to think whether it is a sale moment or not.

Rufenian said:
Direct equity shares on paper offer the best returns. But seem a lot riskier than simply buying an ETF/Trust. Whereas an Index like SP500 will eventually recover will your 10-20 blue chips picks (Enron, Nokia etc)?
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You mentioned this your other thread and it is simply not correct. The S&P 500 would have held Enron. A global index would have held both. But they hold 500 and 1,500 stocks respectively, so they are very diversified. In the case of Enron, they were cooking the books, so their weighting would have gone straight to 0%. With Nokia, it was a gradual decline, so their weighting would have been reduced gradually to 0% based on formulas used.

With an individual portfolio of 20-30 stocks, you are not as diversified, so there is greater risk. If you hold 5% in Enron, you get a greater potential return than if you held it in an index purely from owning more stock. But there is more risk. When it went bust, it will have a bigger impact...again by owning more stock.

If you owned Nokia, would you have known to reduce your holdings gradually or sold out? There's still lots of people holding onto AIB shares from pre 2008, even though they are trading at 30% their highs, just in the hope that they will come back. They should have taken the capital loss and reinvested elsewhere.

Will you be able to do that? If you want to learn how to invest on the job, start with €1,000 and see how you get on.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
There are other diversified conglomerates like Berkshire, Brookfield asset management is a good one I hold, they basically invest in lots of things globally like ports, energy infrastructure, property. They trade on new York stock exchange as BAM and also Toronto exchange. Although like everything over last few years they are on relatively high valuation but you could have bought them much cheaper during covid, more volatile than Berkshire because it always command's a safety premium. They have other spin offs and sister companies aswell, brookfield corporation
 
Sarenco said:
A few questions -

1. How do you identify a “blue chip” stock?
2. How do you know whether it’s “cheap”?
3. How do you realise a gain if you hold the stock “forever”?
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Answer to 1. and 2.= Simple .Do some serious homework.Answer to 3.=E.G For retirement. Sell one share say every year and "blow it"on your passion whatever that is..P.S.I am not a financial expert and my temperament perhaps makes me a laid back [lazy]investor but i do believe strongly in K.I.S.S. "Keep it simple silly."and i also regard the habit of using common sense as "Genius in Disguise"
 
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Sarenco said:
A few questions -

1. How do you identify a “blue chip” stock?
2. How do you know whether it’s “cheap”?
3. How do you realise a gain if you hold the stock “forever”?
Click to expand...
For the 3rd item, dividends may meet some/all of your income needs. Until you need the income, dividends should be reinvested.
 
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