I spend a lot of time thinking about portfolio construction. Specifically, I focus on three things: How many companies should I own? Which companies are worth owning and why? How much cash should I have? Before you answer each one of these questions, I can’t stress how important figuring out your own personal long-term hurdle rate is. It will absolutely inform your strategy for investing. For example, if you’re looking for a 5% annual return,
I was quite surprised by the fact that you dont like to hold cash. I thought I was doing it wrong all along but Im glad to see other people like yourself adding to the best positions.
Great Article! I myself have learnt from owning a multitude of stocks to a few now about which at least I can say I know a little better. And focus is paramount if one aims to beat the market - I had written a bit about it earlier here: https://compoundingwisdom.substack.com/p/the-paradox-of-investing . Hope you like it!
20% annualized rate is a great goal ! Have you been able to achieve this goal so far? Personally, I put my goal at 12%...
By the way, I found your post thanks to a search on the terms "buy and hold" and I developed a small tool to make calculations with the buy and hold strategy.
How I Approach Portfolio Construction
I was quite surprised by the fact that you dont like to hold cash. I thought I was doing it wrong all along but Im glad to see other people like yourself adding to the best positions.
Thanks again
Great Article! I myself have learnt from owning a multitude of stocks to a few now about which at least I can say I know a little better. And focus is paramount if one aims to beat the market - I had written a bit about it earlier here: https://compoundingwisdom.substack.com/p/the-paradox-of-investing . Hope you like it!
That's really generous & knowledgeable article. Can you please share some portfolio picks made on the basis of article. Thanks
20% annualized rate is a great goal ! Have you been able to achieve this goal so far? Personally, I put my goal at 12%...
By the way, I found your post thanks to a search on the terms "buy and hold" and I developed a small tool to make calculations with the buy and hold strategy.
Available here : https://www.ifyouhold.com . What do you think about it :)