Stock Allocation?

[Aminatidi]

I keep reading I should be my own fund manager so I've decided to give it a go with a small chunk of money.

Some are UK some are US so my "cunning" plan was simply to do an equal split to start with as the intention is to buy and hold rather than try to be the next Warren Buffett.

I know that there's no "right" or "wrong" way of doing this but I am interested in knowing if this is what other people do/did when starting out and having no reason to favour one stock in their selection over the other so far as weighting?

[tjh290633]

Would you like to share your allocation in the various securities? Then maybe we can comment.

Do it in percentage weight terms, not absolute values.

TJH

[DiamondEcho]

I know that there's no "right" or "wrong" way of doing this but I am interested in knowing if this is what other people do/did when starting out and having no reason to favour one stock in their selection over the other so far as weighting?

I had a couple of failed attempts at investing in what was then fashionable at the time. First equity warrants right before the '97 Asian financial crisis. After which I thought I'd learned my lesson. However by '99 I was working in a bank in the US, by then invested in US .com shares... [boom! and that's despite my job meaning I was - theoretically - attuned to the market, and the strategy I followed being a popular one advocated on Fool.com at the time].

After that I went into B2L instead, giving up on shares entirely. But then around 12 years ago that became less profitable and a great deal more hassle, so I started progressively selling off B2Ls and investing the funds in shares again. I also realised I had to remove 'the me' from the stock-picking, and the Fool.co.uk High Yield Portfolio strategy did exactly that. It incorporates guiding you on both selection and relative weighting.There was, and now is here, a lively discussion board dedicated to that strategy so plenty of seasoned people to bounce ideas off.

These days I only invest in what I understand, companies I like, perhaps whose products/services I use and respect [x-ref: The Art of War - 'Choose to fight a battle on territory that you know']. Shares where all the financials stack up to paint a positive picture in the present and near-term. I also try and keep it simple, for example no direct US holdings where that would raise issues of witholding tax/reporting etc. No packaged products/funds etc at this stage*, as I'm investing for me rather than to buy a fund manager his next Porsche. So HYP definitely does all of that for me.

I think a useful starting point for someone just considering this is trying to define what it is you're trying to achieve and when. Considering how much and how often new funds will be available to invest, the potential for tax-efficient account structures, and then get the ball rolling.
p.s. the tortoise really does win


* come effective retirement day when I should have achieved my goals, I'll re-examine this and very likely partially diversify into a few good low-fee funds. The idea being at retirement you might opt to de-risk to an extent; so no more Black X-days or .busts to cause mega-drama again.

[DiamondEcho]

I think a useful starting point for someone just considering this is trying to define what it is you're trying to achieve and when.

On which note, and I've mentioned this previously in other discussions, I think the 'How much is enough?' question is a really important one. And it's also one that can be overlooked. I can look at spending records now and accurately total my spending now, but what about when I plan to 'retire' in the future? I aspire to lead a different lifestyle from now so an idea of what it might cost would be very helpful, since then I can gauge the capital pot required to yield such an income, and it gives me a decent target to work towards.
When I found this tool: 'The Budget Planner' https://www.moneysavingexpert.com/banki ... t-planning I thought it a good idea but I also approached it with quite some trepidation - 'What if I'm waaaay off target, with only a few years to go?'. So that first time I semi didn't want to do it at all, to calculate current outgoings. But when I forced myself to I concluded my figures were notably better than I'd expected - that was a shock.
Once I'd a good grip on where I then stood I then looked down through all the expense categories and considered the kind of life I aspired to lead in retirement. Work related clothing, commuting etc was taken out. The number of holidays + long w/e's away perhaps rises. Move out of London to a less expensive place (=more capital=more income) to a place with a garden (= +gardening expenses). The first time I did it I just ball-parked as best I could. I found the process itself very rewarding, as it really made me think about many things I hadn't considered before.
A couple of years later I went through the process again, and that time I added spreadsheet pages to incorporate my wife's sole outgoings, and another for joint household outgoings. So then I had his+hers+household=total. I do recall however that MrsDE protested like mad about having to consider such nebulous things, until I reminded her she's retiring early [now this year] and her lifestyle must be planned for too.
I'm just about due to revisit it, update the input data, ponder again our needs and aspirations, and crank out version 3. I HATED beginning this process, but I'm now so glad and reassured that I did.
I think this double-ended approach works well for me - find a decent looong-term no-gimmick strategy to accumulate capital and derive an income from it, + know what I'm aiming for so I can do my best to stay on track. Also back to the original topic title, knowing my trajectory to end-goal allows me to consider de-risking (usually = lower yield) into the retirement target.