Building a stock portfolio from scratch
It is never too early or too late to start building a stock portfolio. At any given time, opportunities are presented. My personal motto is this: JUST START, even if it is small.
I treat every cent I own like an employee. I give it a job, so that my money works for me. The principle behind investing is that when you buy stocks, you make your money work for you because what you get in return are dividends and capital growth. If I were to build a stock portfolio from scratch - I would structure it with a mix between value and growth stocks, and diversify it as best as possible.
The growth opportunities still look better offshore, especially in the 4th industrial revolution. That is why my largest investment would be the Sygnia 4th Industrial Revolution ETF. The following companies are the companies I like the most in their respective industries, and I find their prospects attractive. They're all listed on the JSE:
- Sygnia ITRIX 4th Industrial Revolution (13%)
Gives you exposure offshore in fast growing industries. The 4th industrial revolution movement is evolving and expanding as we speak. An ETF is also a “safer” investment as it is a lot of companies in one that is managed and updated for you. Companies in this ETF includes Tesla. Nvidia, Raytheon, Microsoft and many more.
- Naspers (11%)
Also presents you with international and local exposure. They are the holding company of companies like Media24, Takealot and Prosus, which owns various international assets like the Chinese multinational conglomerate holding company, Tencent. They also have exposure to various other global Fintech companies. So, you get a lot of exposure to various high growth companies by owning Naspers shares in various economies.
- Bidcorp (7%)
Bidcorp is an international broad-line foodservice group, operating in United Kingdom, Europa, Australasia and emerging markets. People will always eat.
- Adcock Ingram (7%)
Adcock would be my pharmaceutical play. They have some great well-known products like Panado pain killers. They also have various cold and flu medication that might experience a revenue increase from Covid-19.
- Purple Group (7%)
FinTech small cap play. If a business does well, the stock price will eventually follow. They are the holding company of EasyEquities. Still a small business but they are growing at rapid rates and adding thousands of clients each day.
- Sirius Real Estate (7%)
German property and storage company.
- Transaction Capital (6%)
Monopoly in South Africa taxi industry.
- Afrimat (6%)
One of the best management teams out there. They are absolutely amazing at allocating capital and it gives you some more diversification and exposure in the commodity space.
- African Rainbow Capital (6%)
Rain, Tyme Bank, Sanlam, Alexander Forbes and other investments. Great management team with names like Patrice Motsepe and Johan van Der Merwe.
- Shoprite (6%)
Food retailer (Checkers)
- Master Drilling (5%)
Mining technology and innovation solutions across the globe
- Altron (6%)
- DCX10 (5%)
- MTN (5%)
Trading at very low levels. As shareholder you get African exposure, as well as the exposure to the ever-increasing digital economy. With the lockdown situation, more and more people are using their phones and internet, which means people buy more data bundles.
- New Gold ETF (3%)
Gold price exposure.
View the stock picks and podcast section on the FinMeUp app for more detail on these specific companies and other attractive companies in South Africa and the US like Tesla and Nvidia.
These companies construct a well-diversified portfolio with different industries and locations. Operations and revenue come from the UK, China, Australia South Africa, South America and Germany. With the DCX10 you also get your hands-on cryptocurrencies (The top 10 largest crypto’s by market cap).
This portfolio also presents a lot of growth opportunity in a small cap company like Purple group with great potential.
Before you jump in and just buy shares you must make sure you UNDERSTAND THE COMPANIES YOU INVEST IN. Do your own detailed research. FinMeUp will be covering most of these companies on the FinMeUp app over the coming weeks to help users understand the companies better and help users with doing adequate research and building investing confidence. FinMeUp will cover what they do, where they operate, their financials, their prospects as well as giving insights on how to do research on companies.
Like Warren Buffet says, “Risk comes from not knowing what you are doing”.
(This is not financial advice to anyone, as everyone should have their own strategy and do their own research).