There are thousands of stocks to choose from on several different exchanges worldwide. It’s so easy to get lost and so hard to stay focused with so many choices.
As I look back on my years of stock choices – some good, several bad – it’s no mystery now why I lost so much money over the years. My past is riddled with a focus on quick scores (trading) or trying to hit home runs (high risk).
This cost me thousands ($100k+) over the years in losses and lost compounding. It’s a big reason I had to start from scratch ($0) with my taxable account in 2018 at 55 years old. Do not make the same mistake … the sooner you change course the better.
IMPORTANT NOTE
I make no assurances or promises about the future short or long-term performance of any companies on this Master Stock List. It’s the responsibility of each investor to only purchase stocks after their own independent verification of the facts, consultation with professional advisers if need be, and with a willingness to accept full responsibility for the consequences of your own investment decisions. Your circumstances, goals, risk tolerance, and time frames are likely different from mine.
I’m not an investment professional and these stocks have risk that you need to consider before buying them. As I do with this entire blog, I’m showing you what I’ve done or plan to do in preparation for retirement. Look for ideas from this list and then make your own decisions based on your unique situation.
The stocks in this list represent companies that have and should continue to be around for decades and many are iconic brands. Most of these companies are Sleep Well at Night and never sell types of stocks.
A few more things about the list:
- It’s my belief (backed by studies) that holding 20-50 stocks of most/all sectors makes for a balanced portfolio. I’ll probably hold about 25. Honestly, I’m not looking for a specific “number” more than I’m looking for quality stocks at a good price.
- I struggled to include technology, banking, and retail stocks on this list because of the significant changes that frequently occur in those sectors. These can be dangerous and volatile sectors and they will represent a smaller portion of my portfolio. Some of these stocks I don’t consider buy and hold forever stocks. If you have big gains in them, consider trimming your position to decrease the negative impact that the extreme volatility could have on your retirement portfolio.
- Real Estate Investments Trusts (REITs) are not included in the list. I’m not a fan of putting REITs into a taxable accounts. Their dividends are taxed as ordinary income versus the preferential tax treatment qualified dividends receive in taxable accounts.
- Purchasing at the right price is critical, so be patient and pick the right entry point. I’m a big fan of building a position so 3 or more purchases of a stock is recommended.
- Dividend reinvestment will occur on a start/stop basis. For example, I might reinvest dividends of Coca-Cola while the price is down or flat so I can purchase more shares but if the stock get’s pricey then I might take the cash so that I don’t buy shares at a higher price. That’s the beauty of dividend reinvestment, it’s easy to turn on or off with the click of a button. Of course, in retirement things might be different and I might take nearly all dividends as cash but everything is case-by-case and personal. That’s my plan and I recommend you create your own plan.
Master Stock List
I bought my first taxable account stock (AT&T) in late-2018. Ever since, I’ve been adding companies that I considered good value (at the time), high quality, and mostly dividend payers. Though I’ve been focused on quality, the COVID-19 virus has added another level of thought to my screening process.
I expect to have 25-30 stocks in my taxable account when I retire. Five of those will be absolute core holdings and will have a larger portfolio weight percentage. Many of those potential core holdings (i.e. Colgate-Palmolive) need to come down in price. So, I’ll buy other out of favor stocks from the watch list and build my cash position for the day some stocks come down in price.
The Watch List will evolve as new ideas come to life. My taxable portfolio plus my watch list is my attempt to narrow my focus on the thousands of stocks we have at our disposal. Again, I can’t stress enough that purchasing these large company stocks at the right price is critical to long-term returns. Be patient and do not chase performance.
The “Maximum %” column was introduced in an article on July 4, 2020 titled Next Level Thinking. This allows me to manage my number of stocks with a quality guidance. It means I’m willing to hold “up to” a maximum percentage of an individual stock in my overall investment portfolio. For example, if my investment portfolio is $300,000 then I’m willing to hold up to $18,000 in Johnson & Johnson. Over time, I’m likely to move stocks up and down levels based on various factors. For example, in 2020 I moved Exxon Mobil from a Level 1 down to a Level 2.
Build your cash position, be patient, and when the time is right start buying them (and others on your list) at the right price. Limit portfolio turnover and hold these low maintenance stocks for decades.
Thanks for reading!
Mr. TLR