We just had a subscriber ask "How many stocks does the average investment club own?".
We don't keep that statistic because different investment clubs have different philosophies. I'm not sure what would be considered an "average" one.
But I did tell him I'd ask you guys for some feedback.
How many stocks does your investment club hold and why have you picked that number? I'm sure you can give him some good ideas for determining the optimum number for his club.
Laurie Frederiksen Invest with your friends! www.bivio.com
I think that the statistics suggest that owning between 10 &
20 stocks helps protect from the risk of involved in the
individual ownership of equities. In other words, owning
less than 10 involves a greater risk than an index that one
of the stocks will go bankrupt and become worthless. Owning
more than 20 doesn't diversify this risk away any further.
There is a discussion about this in Investopedia at : http://www.investopedia.com/ask/answers/05/optimalportfoliosize.asp
Paul Madison on
I agree with Scott's assessment but would add in one other element for investment clubs.
Most members should view investment clubs as a way to learn about stocks and investing. So in this regard it is important to keep the number of stocks at a manageable level. With a club that tends towards new investors, this might mean no more than one stock per member. As the members get more experience it may be able to move to maybe two stocks per member. If you have more than that, I would suggest that there is a very high probability that not all the stocks will receive proper "stock watching". Not doing due diligence on a company's earnings reports and news items means there is a higher likely-hood that the club will have a surprise with one of their stocks. IMO watching 6 stocks very well will serve a club better than owning 25 stocks that are not being watched.
I think that the statistics suggest that owning between 10 &
20 stocks helps protect from the risk of involved in the
individual ownership of equities. In other words, owning
less than 10 involves a greater risk than an index that one
of the stocks will go bankrupt and become worthless. Owning
more than 20 doesn't diversify this risk away any further.
There is a discussion about this in Investopedia at : http://www.investopedia.com/ask/answers/05/optimalportfoliosize.asp
Judy Simonson on
Like Paul, we try to keep our stock list manageable, too. For us that's 2 stocks per person, but no more than 3 stocks per person.
Judy
On Mar 29, 2016, at 9:06 AM, Paul Madison <madispa@gmail.com> wrote:
I agree with Scott's assessment but would add in one other element for investment clubs.
Most members should view investment clubs as a way to learn about stocks and investing. So in this regard it is important to keep the number of stocks at a manageable level. With a club that tends towards new investors, this might mean no more than one stock per member. As the members get more experience it may be able to move to maybe two stocks per member. If you have more than that, I would suggest that there is a very high probability that not all the stocks will receive proper "stock watching". Not doing due diligence on a company's earnings reports and news items means there is a higher likely-hood that the club will have a surprise with one of their stocks. IMO watching 6 stocks very well will serve a club better than owning 25 stocks that are not being watched.
I think that the statistics suggest that owning between 10 &
20 stocks helps protect from the risk of involved in the
individual ownership of equities. In other words, owning
less than 10 involves a greater risk than an index that one
of the stocks will go bankrupt and become worthless. Owning
more than 20 doesn't diversify this risk away any further.
There is a discussion about this in Investopedia at : http://www.investopedia.com/ask/answers/05/optimalportfoliosize.asp
bill.waskosky on
Your club likes to keep the stock # to
no no more then 2 stocks per club member. Right now our club has
8 members and we own 15 stocks. We divide the stock up among the
club members to report back to club twice a year or if there is breaking
news on the company. Every year we will then reassign stock
to different members so that member will get to know all the stocks we
own well. We find that any more the 3 stocks per member may get
to be to much for some members to keep up on. If our member ship
grows to more then 10 we would cut the stock assignment down to 1to 2 per
member. We have talked about a limit of 20 stock but that is not
in writing for the club. There may be times when the club finds
a stock that is a great buy and we do not want to limit the club form buying.
Bill Waskosky
Field Service Support Technician
Technology Services Department
Saint Paul Public Schools
Office out of Harding HS -- Phone 651-744-3135
For all your IT service needs click
here--http://it.spps.org
From:
Laurie Frederiksen
<laurie@bivio.biz>
To:
The Club Cafe <club_cafe@bivio.com>,
Date:
03/29/2016 07:33 AM
Subject:
[club_cafe]
How Many Stocks?
Sent by:
club_cafe@bivio.com
Good morning all,
We just had a subscriber ask "How many stocks does
the average investment club own?".
We don't keep that statistic because different investment
clubs have different philosophies. I'm not sure what would be considered
an "average" one.
But I did tell him I'd ask you guys for some feedback.
How many stocks does your investment club hold and why
have you picked that number? I'm sure you can give him some good
ideas for determining the optimum number for his club.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
In my club we have 15 stocks and 11 partners. We would like to keep it at one stock per partner but bought more when we found a "great stock at a great price." Because of their duties, officers watch one stock; non-officers typically watch two.
Also, the members of the stock study committee do not watch the stock they present, until we switch watchers. We switch every other year by drawing names in a blind draw.
Roy Chastain
"There is nothing on this earth moreto be prized than true friendship." Thomas Aquinas
On Mar 29, 2016, at 6:06 AM, Paul Madison <madispa@gmail.com> wrote:
I agree with Scott's assessment but would add in one other element for investment clubs.
Most members should view investment clubs as a way to learn about stocks and investing. So in this regard it is important to keep the number of stocks at a manageable level. With a club that tends towards new investors, this might mean no more than one stock per member. As the members get more experience it may be able to move to maybe two stocks per member. If you have more than that, I would suggest that there is a very high probability that not all the stocks will receive proper "stock watching". Not doing due diligence on a company's earnings reports and news items means there is a higher likely-hood that the club will have a surprise with one of their stocks. IMO watching 6 stocks very well will serve a club better than owning 25 stocks that are not being watched.
I think that the statistics suggest that owning between 10 &
20 stocks helps protect from the risk of involved in the
individual ownership of equities. In other words, owning
less than 10 involves a greater risk than an index that one
of the stocks will go bankrupt and become worthless. Owning
more than 20 doesn't diversify this risk away any further.
There is a discussion about this in Investopedia at : http://www.investopedia.com/ask/answers/05/optimalportfoliosize.asp
Ed Kennedy on
We have about 20 stocks after 9 years and with a portfolio of $125,000. A few members think this is too many, but it really is no extra work as we publish the portfolio with unrealized gains and losses (one page) and fundamental statistics for each meeting (one more page) .
We are also fairly rigorous in calculating our year to date gain or loss compared to averages,
On Tue, Mar 29, 2016 at 8:33 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Good morning all,
We just had a subscriber ask "How many stocks does the average investment club own?".
We don't keep that statistic because different investment clubs have different philosophies. I'm not sure what would be considered an "average" one.
But I did tell him I'd ask you guys for some feedback.
How many stocks does your investment club hold and why have you picked that number? I'm sure you can give him some good ideas for determining the optimum number for his club.
Laurie Frederiksen Invest with your friends! www.bivio.com
I agree with keeping the portfolio to a manageable amount of stocks for members to follow.
In addition, when we analyze stocks to keep, we do look at diversification within our portfolio, including the size of the companies (mega, large, mid cap, and small cap), and diversification of industries. The hardest part of this, at least in my experience, is diversification of stock sizes, especially finding quality small cap stocks meeting the criteria for our club.
Each club is different with experience and members. As clubs mature, members are able to handle more stocks to follow. I do believe 2 stocks per member is a good number, as has been mentioned by other clubs in this discussion.
Tim Hoyman
Colorado Leprechauns
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Laurie Frederiksen Sent: Tuesday, March 29, 2016 6:33 AM To: The Club Cafe <club_cafe@bivio.com> Subject: [club_cafe] How Many Stocks?
Good morning all,
We just had a subscriber ask "How many stocks does the average investment club own?".
We don't keep that statistic because different investment clubs have different philosophies. I'm not sure what would be considered an "average" one.
But I did tell him I'd ask you guys for some feedback.
How many stocks does your investment club hold and why have you picked that number? I'm sure you can give him some good ideas for determining the optimum number for his club.
Laurie Frederiksen Invest with your friends! www.bivio.com
My club typically owns about three stocks per member because tracking that many is a reasonable task. Some members are more thorough than others (picture a folder full of newspaper articles regarding each company) and we had to put a time limit on our monthly portfolio reviews because one member wants to read all those articles so we will know as much as she does. It often takes about fifteen minutes each. She figures she has gone to the trouble to learn everything about everything and we all need to know it too. My position is that we want to know whether we would buy it today knowing what we know today and not much else. If we decide we would not buy it today, we stop reinvesting its dividends and use funds for companies that are buys. Other times we have sold based on declining earnings but only after the tracker suggests that we sell.
Mike Jones
Wall$treet Wannabees
From: Roy Chastain <roy12@me.com> To: club_cafe@bivio.com Sent: Tuesday, March 29, 2016 9:02 AM Subject: Re: [club_cafe] Re: How Many Stocks?
In my club we have 15 stocks and 11 partners. We would like to keep it at one stock per partner but bought more when we found a "great stock at a great price." Because of their duties, officers watch one stock; non-officers typically watch two.
Also, the members of the stock study committee do not watch the stock they present, until we switch watchers. We switch every other year by drawing names in a blind draw.
Roy Chastain
"There is nothing on this earth moreto be prized than true friendship." Thomas Aquinas
On Mar 29, 2016, at 6:06 AM, Paul Madison <madispa@gmail.com> wrote:
I agree with Scott's assessment but would add in one other element for investment clubs.
Most members should view investment clubs as a way to learn about stocks and investing. So in this regard it is important to keep the number of stocks at a manageable level. With a club that tends towards new investors, this might mean no more than one stock per member. As the members get more experience it may be able to move to maybe two stocks per member. If you have more than that, I would suggest that there is a very high probability that not all the stocks will receive proper "stock watching". Not doing due diligence on a company's earnings reports and news items means there is a higher likely-hood that the club will have a surprise with one of their stocks. IMO watching 6 stocks very well will serve a club better than owning 25 stocks that are not being watched.
I think that the statistics suggest that owning between 10 &
20 stocks helps protect from the risk of involved in the
individual ownership of equities. In other words, owning
less than 10 involves a greater risk than an index that one
of the stocks will go bankrupt and become worthless. Owning
more than 20 doesn't diversify this risk away any further.
There is a discussion about this in Investopedia at : http://www.investopedia.com/ask/answers/05/optimalportfoliosize.asp
William Muhlke on
Mike Jones.
Could you send info on "tracker" guidelines.
Thanks.
Bill
Date: Tue, 29 Mar 2016 14:27:43 +0000 From: user*21595500001@bivio.com Subject: Re: [club_cafe] Re: How Many Stocks? To: club_cafe@bivio.com
My club typically owns about three stocks per member because tracking that many is a reasonable task. Some members are more thorough than others (picture a folder full of newspaper articles regarding each company) and we had to put a time limit on our monthly portfolio reviews because one member wants to read all those articles so we will know as much as she does. It often takes about fifteen minutes each. She figures she has gone to the trouble to learn everything about everything and we all need to know it too. My position is that we want to know whether we would buy it today knowing what we know today and not much else. If we decide we would not buy it today, we stop reinvesting its dividends and use funds for companies that are buys. Other times we have sold based on declining earnings but only after the tracker suggests that we sell.
Mike Jones
Wall$treet Wannabees
From: Roy Chastain <roy12@me.com> To: club_cafe@bivio.com Sent: Tuesday, March 29, 2016 9:02 AM Subject: Re: [club_cafe] Re: How Many Stocks?
In my club we have 15 stocks and 11 partners. We would like to keep it at one stock per partner but bought more when we found a "great stock at a great price." Because of their duties, officers watch one stock; non-officers typically watch two.
Also, the members of the stock study committee do not watch the stock they present, until we switch watchers. We switch every other year by drawing names in a blind draw.
Roy Chastain
"There is nothing on this earth moreto be prized than true friendship." Thomas Aquinas
On Mar 29, 2016, at 6:06 AM, Paul Madison <madispa@gmail.com> wrote:
I agree with Scott's assessment but would add in one other element for investment clubs.
Most members should view investment clubs as a way to learn about stocks and investing. So in this regard it is important to keep the number of stocks at a manageable level. With a club that tends towards new investors, this might mean no more than one stock per member. As the members get more experience it may be able to move to maybe two stocks per member. If you have more than that, I would suggest that there is a very high probability that not all the stocks will receive proper "stock watching". Not doing due diligence on a company's earnings reports and news items means there is a higher likely-hood that the club will have a surprise with one of their stocks. IMO watching 6 stocks very well will serve a club better than owning 25 stocks that are not being watched.
I think that the statistics suggest that owning between 10 &
20 stocks helps protect from the risk of involved in the
individual ownership of equities. In other words, owning
less than 10 involves a greater risk than an index that one
of the stocks will go bankrupt and become worthless. Owning
more than 20 doesn't diversify this risk away any further.
There is a discussion about this in Investopedia at : http://www.investopedia.com/ask/answers/05/optimalportfoliosize.asp
Victoria McDonald on
I would appreciate that info as well.
What are other factors in deciding when to buy/sell club stock?
My club typically owns about three stocks per member because tracking that many is a reasonable task. Some members are more thorough than others (picture a folder full of newspaper articles regarding each company) and we had to put a time limit on our monthly portfolio reviews because one member wants to read all those articles so we will know as much as she does. It often takes about fifteen minutes each. She figures she has gone to the trouble to learn everything about everything and we all need to know it too. My position is that we want to know whether we would buy it today knowing what we know today and not much else. If we decide we would not buy it today, we stop reinvesting its dividends and use funds for companies that are buys. Other times we have sold based on declining earnings but only after the tracker suggests that we sell.
Mike Jones
Wall$treet Wannabees
From: Roy Chastain <roy12@me.com> To:club_cafe@bivio.com Sent: Tuesday, March 29, 2016 9:02 AM Subject: Re: [club_cafe] Re: How Many Stocks?
In my club we have 15 stocks and 11 partners. We would like to keep it at one stock per partner but bought more when we found a "great stock at a great price." Because of their duties, officers watch one stock; non-officers typically watch two.
Also, the members of the stock study committee do not watch the stock they present, until we switch watchers. We switch every other year by drawing names in a blind draw.
Roy Chastain
"There is nothing on this earth moreto be prized than true friendship." Thomas Aquinas
On Mar 29, 2016, at 6:06 AM, Paul Madison <madispa@gmail.com> wrote:
I agree with Scott's assessment but would add in one other element for investment clubs.
Most members should view investment clubs as a way to learn about stocks and investing. So in this regard it is important to keep the number of stocks at a manageable level. With a club that tends towards new investors, this might mean no more than one stock per member. As the members get more experience it may be able to move to maybe two stocks per member. If you have more than that, I would suggest that there is a very high probability that not all the stocks will receive proper "stock watching". Not doing due diligence on a company's earnings reports and news items means there is a higher likely-hood that the club will have a surprise with one of their stocks. IMO watching 6 stocks very well will serve a club better than owning 25 stocks that are not being watched.
I think that the statistics suggest that owning between 10 &
20 stocks helps protect from the risk of involved in the
individual ownership of equities. In other words, owning
less than 10 involves a greater risk than an index that one
of the stocks will go bankrupt and become worthless. Owning
more than 20 doesn't diversify this risk away any further.
There is a discussion about this in Investopedia at : http://www.investopedia.com/ask/answers/05/optimalportfoliosize.asp
m gardner on
We have about the same number of stocks as we do members, usually a couple more stocks than members. This way people can keep on top of their stocks and have time to look for others for when it's time to sell something.
On Tuesday, March 29, 2016 7:33 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Good morning all,
We just had a subscriber ask "How many stocks does the average investment club own?".
We don't keep that statistic because different investment clubs have different philosophies. I'm not sure what would be considered an "average" one.
But I did tell him I'd ask you guys for some feedback.
How many stocks does your investment club hold and why have you picked that number? I'm sure you can give him some good ideas for determining the optimum number for his club.
Laurie Frederiksen Invest with your friends! www.bivio.com
Our club currently has 19 stocks and 6 partners. We have owed as many as 30 stocks with 9-10 partners. Personally I've felt this was too many stocks per partner as I would prefer an average of 2 stocks per partner. However, other partners believed the increase in stocks provided meaningful benefit by reducing the exposure of any one stock should an unexpected and unforeseen action take place. For example, if you had $100k and 30 stocks then (on average) only 3.3% is exposed to an unexpected loss per stock vs 8.3% if you had 12 stocks. I agree with the sentiment expressed by others that the number of stocks needs to be manageable (i.e. is the club keeping up with the due diligence and homework to mange the stocks the club owns). A clear sign (IMHO) that you own too many stocks is that you don't keep up with the analysis or due diligence for your stocks you own.
We have about the same number of stocks as we do members, usually a couple more stocks than members. This way people can keep on top of their stocks and have time to look for others for when it's time to sell something.
On Tuesday, March 29, 2016 7:33 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Good morning all,
We just had a subscriber ask "How many stocks does the average investment club own?".
We don't keep that statistic because different investment clubs have different philosophies. I'm not sure what would be considered an "average" one.
But I did tell him I'd ask you guys for some feedback.
How many stocks does your investment club hold and why have you picked that number? I'm sure you can give him some good ideas for determining the optimum number for his club.
Laurie Frederiksen Invest with your friends! www.bivio.com