If you have $50,000 to invest how do you split it amongst the stocks you listed on your buy list?

Questions & AnswersIf you have $50,000 to invest how do you split it amongst the stocks you listed on your buy list?
Anonymous asked

Dear Mr Grant.
If you have $50 000 to invest how do you split it amongst the stocks you listed on your buy list?

Your answers will greatly help me in the way I should go.
Thank you. May God Bless you.

1 Answers
Grant Staff answered

I typically follow a simple allocation method such as this: If I have 5K, I buy 1 stock. When I build this money up to 10K, then I hold 2 stocks (5K per each stock), when I build up to 15K, then I hold 3 stocks. When my money was small, then I started out this way until I built up to about 25K while holding 5 stocks. Since I only like to hold around 5 stocks (give or take) at one time, then I started to increase the amount I had invested per stock. Therefore, if I have an account with 100K, and I’m only willing to hold 5 stocks at one time, then I could invest 20K in each company and so forth.
I’m a believer that if I hold too many stocks, then it can be more difficult to follow these companies and to really know what’s happening with them. And when you don’t know what’s happening with your companies than you lose track and can be more susceptible to losses.
 
Also, I should note that I keep a reserve of cash so that I ideally only invest about 80% of my money in each account. So while my account value grows, I can keep this ratio of about 80% available to invest in stocks and the other 20% in cash.
 
I hope this info is helpful for you and let me know when you have other questions just email me:
Grant (at) BeatTheMarketAnalyzer.com

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