Lester

Update:

I have created this portfolio using Investingnote's portfolio feature. The returns as of inception in 6 August are shown below. Currently, it appears that the portfolio does not drop as much when STI is undergoing a bearish period, although we will need more time to confirm this.

It is also interesting to see Investingnote's sector classification vs the one adapted from the report as per the main post.

theintelligentinvestor

One comment is that there is no need to diversify into so many stocks. Yes, we shouldn't put all our eggs into one basket, but 42 businesses are just too many to monitor. Too taxing to read 168 quarterly reports a year. Furthermore, you are building up a $100k portfolio, the average cost of $2.3k per stock is not cost effective on the brokerage fee.

For a $100k portfolio, I would just go for 8 to 15 stocks. In the max stock scenario, the cost will be $6.7k per stock, and the broker fee will be 65% lower.

To share, I have 10x this amount but I only hold 11 stocks.

Lester

Reply to @theintelligentinvestor : Yup, a hurdle rate of over 2.15% is high for a small portfolio of $100k which was just a placeholder assumption I used. To lower costs, you would either narrow down your universe or increase your capital size, and I do agree with you that 8-10 stocks would be the sweet spot.

The time taken to read thru the reports and updates on each is also a very important factor, which is why I used analyst recommendations as a shortcut (though in reality you would probably want a more active hand in the monitoring!)

Thanks for your feedback!

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clim

Different companies of same sector, and different sectors itself might have verying degree of oversea exposures. Are these being managed as well? But what was original purpose of constructing sector neutral local stocks? is it to diversify across different local sectors or just to diversify across sectors?

Also as each country have different competitive advantages, the local companies that we could have in certain sectors, even though is the best local choice, might not be a good choice.

clim

Reply to @Lester : haha i see... thanks for the sharing too. interesting.

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