How Much of Your Portfolio Should You Risk with Less Guaranteed Investments?

Personal Finance Investing Forums How Much of Your Portfolio Should You Risk with Less Guaranteed Investments?

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    174 Prestige

    My portfolio (outside of my 401k) would be defined as pretty risky in terms of where its invested. First of all, 100% of it is invested in equities which means stocks rather than bonds.

    Since I’m a long-term investor, I’m not worried that I’ll lose all of that money. Every market crash comes with a market correction, and the long-term trend is very exciting when you look at the amount of money the S&P index is making.

    But here’s by breakdown: 80% I’m investing in 10-20 stocks I think are the healthiest in terms of projected earnings, value, growth, industry and momentum. This strategy is well documented and tends to perform well.

    My other 20% however is invested in 4 stocks from an emerging industry. None of these stocks would get close to passing my criteria for the 80%, but I really like that industry. Not only do I think it’ll be huge in the future, but I also want to support it with my investment dollars.

    However, you never know if some government regulation will squash that industry for decades or if something terrible will happen to it. In that case, there goes 20% of the portfolio.

    What do you think, is that a decent strategy? Or should I avoid investing a chunk of my portfolio in these risky things?

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