- (1:00) – New Investors: How To Create A Stock Portfolio
- (6:30) – How To Start A Position In Growth Stocks: ETF Safety
- (12:50) – Does Buying What You Know Really Work?
- (23:30) – Episode Roundup: WBA, JNJ, CMG, LULU, XLK, QQQM
-
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Welcome to Episode #261 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is going solo to discuss how to build a stock portfolio.
Let’s say you’ve decided to buy stocks in 2021.
Then what?
A basic stock portfolio should have, at a minimum, 10 stocks. Studies have shown you can create diversity in a portfolio by holding as few as 20 different stocks.
Know Your Goals
The shape of your portfolio will be focused on what your own investing goals are.
1. Are you investing for a long-term goal like retirement or a big purchase like a second home?
2. Are you owning stocks for the short term, hoping to trade them for big gains?
Know your goals.
Have a plan.
Tracey has a friend who is investing in large cap companies that pay dividends like
Walgreens Boots
WBA
and
Johnson & Johnson
JNJ
) as he has a 10-year time horizon.
But your plan may be different.
Buy What You Know?
Another strategy is the old Peter Lynch strategy of “buying what you know.”
Do you love
Chipotle
CMG
and order off the app a couple of times a month?
Or maybe you are a fan of
Lululemon
LULU
and that’s where you’re buying your stay-at-home clothing during the pandemic?
There’s nothing wrong with owning some of your favorite companies.
Remember to do your research on any company you are buying for your portfolio.
A Place for Stock ETFs
If you’re in love with a sector, like technology, it can get overwhelming thinking about accumulating shares in numerous companies like the FAANG stocks.
ETFs can provide diversity as you will get a basket of the stocks.
For those who want to own some of the big cap tech stocks, you might want to check out an ETF like the
Technology Select Sector SPDR Fund
XLK
.
It’s 2 largest holdings are Apple and Microsoft, which are 21% and 20.1% of the ETF, respectively. That means you’re going to own both of those names plus the other 74 technology companies also in the ETF.
What else do you need to know about creating your own stock portfolio?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of MSFT and LULU in her personal portfolio.]
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